The Hindu Business Line : Asia re-defined

At the Asia Forum organised by the London School of Economics in New Delhi, the Prime Minister spelt out a vision of a resurgent Asia as a counterpoint to the West, claiming that with India and China witnessing the fastest sustained growth in the world, Asia was in a sense redefining itself. Rather than worry about the rise of the two economies, he said the phenomenon could actually benefit the West.

As an example in grandstanding, the Prime Minister's speech has a historical value inasmuch as it perceives the balance of world economic power tilting away from the developed nations. This is a sign of the new self-confidence that has permeated both India and China; it also in a sense signals the competitive advantages that each of the two countries holds for the so-called West. By specifying those relative benefits that the Asian hothouses hold for the developed world, the idea of a homogenous `Asian' resurgence, assumed by the Prime Minister, sounds nothing more than simple rhetoric. Precisely for that reason, it glosses over the divergences that has marked Asian growth trajectories and the need to work on the differences in such growth for nation-specific, rather than geographical, goals.

Barring India, just about every Asian country's success story has depended on trade with the United Sates and the European Union. In the 1980s, Korea, Malaysia, Taiwan, the current members of the Association of South East Asian Nations, grew rapidly on an export blitzkrieg to the West. When China burst in on the scene, following the same model, it edged the East Asian `tigers' out of the top slot and became the No 1 exporter to the US and the EU, simply by using cheaper labour. In 2005, of the dozen leading trading partners of the EU, six were from Asia, specifically, China and individual Asean members. India does not figure on that list yet, though it is the fastest growing economy after China and the source of that rise — the vibrant domestic market and to an extent its services exports — lends its achievement a distinct flavour.

China's fortunes are still tied to the US as its manufacturing hub. India too needs the US and the EU for the expansion of its domestic markets and exports. Within Asia, India has better chances of cooperation n services and manufacturing with China, even while competing with it, rather than with Asean as a trading bloc. In this new realignment, the idea of `Asia' and the `West' has become as redundant as the notion of the `Orient' and the `Occident'.