Americans and Europeans tend to discuss the decline of the international order as if it were a domestic issue of the Western value community. Asia, however, is beginning to show the world that the shape of the international order is not a matter for the West alone to determine. At the multilateral level, the West already knows that it often depends on Asian involvement, particularly that of China, India, and Japan. The West’s greatest challenge, however, is reacting to functional integration and regional community-building in Asia, processes that constitute an ever more attractive organizational model for half of the world’s population and the most dynamic part of the global economy.
To the extent that Western elites are aware of these processes at all, they doubt that anything can come of them. Both realists and idealists in the Western value community will have to prepare themselves for an uncomfortable refutation of their assumptions by Asia’s strategic pragmatism, a pragmatism ethically grounded in a core of transcultural values similar to those of the West.
If the (American) founding fathers of European integration theory could see the strength of economic ties in Asia today, they would classify it as an advanced stage of functional integration. The promotion of peace and prosperity between former enemy nation states through the mutually advantageous exchange of goods, information, services, and capital is well underway.
Asia’s integration has also reached the financial sector. Reminiscent of Europe’s experience of spillover leading to greater integration was the way in which the 1997 Asian crisis led to the “Chiang-Mai initiative” of ASEAN+3 in 2000, which was proposed by Japan. Asian-Pacific central banks and ASEAN+3 finance ministers are now working to divert some of the huge flow of Asian savings into Asian long-term investment and away from US treasury bills or bonds. At a joint meeting of the Asian Development Bank (ADB) and ASEAN+3 in Hyderabad, India, in 2006, these efforts gained influential support from India’s Prime Minister Manmohan Singh, who, as a professional economist, called for “savings and surpluses generated in our region [to] find investment avenues within our region.” Clyde Prestovitz found these words “stunning” and “the harbinger of the end of the dollar and of American hegemony.” But the prime minister’s statement was nothing other than an appeal to the old American idea of functional integration.
Emulating the EU
For years, Japanese economists have been thinking about currency integration in Asia. ADB President Haruhiko Kuroda requested that one of the bank’s departments prepare the conceptual foundations for such a process. The result was the 2006 proposal for an Asian Currency Unit (ACU) as a unit of account modeled on the preliminary phase of the European monetary union. Robert Mundell, the most influential American economist in this field, is convinced that Asia needs a common currency and that such a project is realistic. The only question is which currency will “anchor” the common Asian currency.
Speaking before the Japanese parliament in April 2007, China’s prime minister, Wen Jiabao, stressed the interdependence of the Chinese and Japanese economies. Both sides are seeking functional solutions as they attempt to overcome explosive rivalries such as Chinese-Japanese competition over oil and gas resources. In an address to the Academy of the Communist Party of China, the general secretary of the Japanese governing party, the Liberal Democratic Party, proposed to emulate the pattern of the European Coal and Steel Community, though adding to it some “Asian wisdom.”
Balance of Power
Balance-of-power strategies and rivalries between great powers are familiar patterns in both Asian and European history. On neither continent, though, do these historical patterns provide reason to assume that functional integration and the regional community-building of the ASEAN-sponsored East Asian Community (EAC) are without prospect. On the contrary, the attractiveness of integration stems from devastating historical experience with realpolitik. Asia’s “big three” will not always be able to act as “good Asians” as implied by the EAC. But in this respect, too, the EAC does not differ fundamentally from the European Union. France and Great Britain likewise maintain some global ambition for which they do not always seek EU approval.
Asia’s Strategic Pragmatism
Whereas the Western community of values continues to vacillate between idealism and realism, and fears for “its own” international order, Asia, with strategic pragmatism, is building the pillars to support a future international order. India and Japan see themselves as champions of democracy. China sees itself confronted by enormous social responsibilities as it makes the transformation from a planned to a market economy. ASEAN is using its decades of experience with functional integration and regional community-building to keep rivalries between Asia’s great powers under control. As exemplified by exchanges between Chinese and Indian leaders at a symposium organized by the New York Asia Society in Mumbai in March 2006, Asia’s discourse on recipes for economic policy, development strategies, legal reform, and democratic opening tends to maintain the forms of Asian politeness. But the substance of that discourse contains material for shaping international structures. The West should pay attention.
Henrik Schmiegelow is head of Schmiegelow Partners international policy consulting. From 2001-2006 he was German ambassador to Japan.
This article is presented as an excerpt from a longer essay published in the Global Edition of Internationale Politik, Germany’s foremost foreign policy journal and a collaboration partner of the Atlantic Community.
Asia’s International Order, IP Global Fall 2007
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