Quiet
continental drift at Asia-Europe
summit By Simon Roughneen
VIENTIANE - Machine-gun toting soldiers,
police siren ululations, shuttered schools,
barricaded streets, grandiose new buildings and
stony-faced host leaders were probably the most
notable aspects of an otherwise uneventful
Asia-Europe Meeting in the Laos capital.
The summit, known by the shorthand ASEM,
takes place every two years, and this round was
attended by French President Francois Hollande,
Russian counterpart Dmitry Medvedev and China's
soon-to-be-former Premier Wen Jiabao, among 51
heads of state or government and other
representatives from Asia and Europe.
Nothing much of substance happened or was
said - aside from a robust exchange between Japan
and China over the
Senkaku/Diaoyu islands -
and there were slim pickings for the hundreds of
journalists scrambling outside meeting rooms to
doorstep leaders as they emerged from meetings.
"Prime Minister [Julia] Gillard will not
be speaking to press between bilaterals,"
admonished an Australian security guard after
reporters tried to get the Australian PM's views
on the summit as she strode through the summit
hall corridor.
Even the Laotian decision
to go ahead with the controversial US$3.8 billion
Xayaburi dam, announced in the middle of the
November 5-6 summit, failed to provoke Cambodia's
Hun Sen or Vietnam's embattled Prime Minister
Nguyen Tan Dung into talking, despite both
downstream countries' previously expressed
concerns about the Xayaburi project and the
rub-your-nose-in-it timing of Vientiane's
announcement.
Despite the loss of face,
Dung maintained a seemingly permanent smile as he
moved to and from meetings, while an attempt to
get Hun Sen's views on Xayaburi were met with a
gruff swat of former Khmer Rouge cadre's left hand
and a dismissive-sounding, indecipherable grunt.
With China in leadership change mode and
the United States in the throes of elections, this
summit was pushed to the background, with the
upcoming East Asia Summit in Phnom Penh likely to
be a higher-stakes affair given US-China rivalry
and tensions over the South China and East China
seas.
Economically, however, there was a
lot to talk about. In his address to the ASEM
summit, European Commission head Jose Manuel
Barroso reminded listeners that "The European
Union's open market has been the main destination
of Asian exports. European Union trade with ASEM
partners has increased by 50% in the last six
years. The European Union is also the biggest
source of foreign direct investment in the
region."
Impressive statistics, and all
told the ASEM region covers half of the world's
GDP and 60% of the world's trade, according the
European Council president Herman can Rompuy, but
with Europe laboring and the prospect of some
"pan-European" solution to the debt millstone
facing several of the continent's economies -
where slowdown is hampering export-oriented Asian
economies - China quickly stamped its imprimatur
on the meeting.
"The main economic
institutions need to roll out a clear and reliable
midterm financial plan as early as possible to
solve the sovereign debt crisis," said Wen,
referring to Europe's various political and
financial institutions.
With trading
countries such as Malaysia seeing reduced exports
with struggling Europe, Asian leaders have a clear
stake in how the European debt crisis plays out,
with some hinting that things need to be done a
bit differently.
"You cannot get growth if
you are saddled with too much sovereign debt, and
that needs to be worked out if you will have
growth, said Malaysian PM Najib Razak, speaking to
Asia Times Online and other reporters at the
summit.
For their part, European countries
want more trade and investment in Asia, and
Germany's Foreign Minister Guido Westervelle said
that, "We share an interest in free trade and
regulated financial markets," pointing out that
the European Union is pursuing free-trade
agreements with India, Japan, Malaysia, Singapore
and Vietnam and recently reached such a deal with
South Korea.
The reality is, however, that
the rush of bilateral deals comes off the back of
the slow-moving Doha round of trade liberalization
and varied trade interests across Asia's
economies.
But reading between the lines
of some European leaders comments, there are hints
that some Asian countries don't want a level trade
playing field. In a veiled dig, France's socialist
president genuflected at the free-market altar,
saying, "Europe has always trusted the market on
condition that the rule of reciprocity is the same
for everyone because Europe cannot be a continent
that is always in commercial deficit. We need to
have equal exchange. We believe in an open market
system, but we ask that everyone makes the same
effort with the same clarity."
Bailouts
for Europe require Asian money, however, meaning
that in the immediate term at least, the ball is
very much in the eastern court, for now, given
China's growth (albeit slowing) and estimated
US$3.3 trillion foreign exchange reserve war
chest.
Europe has consented to greater
Asian representation on international financial
institutions and, it seems, on the UN Security
Council. The final ASEM summit communique made
brief mention of "completing the 2010 quota and
governance reform of the IMF" (International
Monetary Fund) and in a veiled dig at the United
States, "called on the remaining IMF members to
take the necessary steps to do so".
Regarding the Security Council, the
document said that "comprehensive reform of the UN
system remains a priority" with the goal of
achieving "a more representative, more efficient
and more effective UN Security Council".
Leaders would not be drawn, however, on
whether these international institution reforms
came up during the summit. "I would prefer not to
comment on that," Malaysian PM Najib Razak told
Asia Times Online.
Similarly, Indonesia
Foreign Minister Marty Natelagawa reckoned that
"there hasn't been that much discussion of that
issue here," referring to IMF reform.
Asked how much representation
his country, the world's fourth biggest, would
like to have at the IMF, Natelagawa laughed,
merely saying "it's a process isn't it. We are not
going to force the issue, it will come when it
comes."
Simon
Roughneen is a foreign correspondent. His
website is www.simonroughneen.com.
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