Thursday, May 22, 2014

Asia, SE Asia, East Asia - Two Scenarios over the next 20 years

Two reports on PM Lee's speech at the Nikkei Conference


 May 22, 2014

Two scenarios for Asia in 20 years' time: PM Lee

By Fiona Chan Senior Economics Correspondent in Tokyo

What will Asia look like in 20 years? The United States will continue to be the world's top superpower, while China's economy will be three to four times larger with commensurate growth in its political and military might, and Japan will remain a force in the region to be reckoned with, Prime Minister Lee Hsien Loong said on Thursday.

Speaking in Tokyo at the 20th International Conference on the Future of Asia, better known as the Nikkei conference after its organisers Nikkei Inc and the Japan Center for Economic Research, Mr Lee sketched out two scenarios that could arise in the region in 2034 - one positive, the other less so.

The first scenario is a peaceful Asia, he said at the conference, which was held at the Imperial Hotel with the theme of "Rising Asia: Messages for the next 20 years".

Describing such a situation, he said countries would work together "to advance shared interests, while competing peacefully with one another".

The US would maintain its "rebalance towards Asia" as new presidents are elected, and engage the region in not just security matters but also "trade, investments, education and people-to-people exchanges", Mr Lee said.

It would also reach a new working arrangement with China, which by then would have established itself as a status quo power that adheres to international law and norms and gives smaller countries space to thrive.
"The US and China find a new modus vivendi, competing for influence but with a sufficiently strong overall relationship to accommodate each other on many issues," Mr Lee said in outlining this scenario.

Meanwhile Japan would revitalise its economy and work with its neighbours to put the history of the war definitively in the past, he added.

Against this stable geopolitical backdrop, regional economic cooperation would thrive and Asean would continue to play a central role in the region as "an effective neutral platform for major powers to engage one another".

But an alternative, "less benign" scenario is also possible, Mr Lee noted.

This possibility would see "the tremendous growth in China's size and power prove too much for the regional order to accommodate".

US-China relations would be fraught with tensions, China's influence would be "merely tolerated by other smaller countries in the region", and friction would fester among Asian countries amid "unresolved historical issues, territorial disputes, and nationalist populism", Mr Lee said.

This situation would deal a setback to economic integration and force Asean countries to choose sides, he added. "Everyone loses in such a scenario".

Which of the two scenarios comes to pass depends on two key factors: US-China relations and the development of nationalism, said Mr Lee.

He added: "On balance, I believe that we will achieve a large part of the good outcomes, and avoid most of the bad scenario.

"This is because I am confident that the US will not relinquish its decades-long position as an Asia-Pacific power, and I am hopeful that as China's power grows, it will find ways to continue integrating smoothly into the international system."

["Hope" is not a strategy.]


Next 20 years present a 'historic opportunity' for Asia: PM Lee

22 May 2014

TOKYO: Singapore Prime Minister Lee Hsien Loong on Thursday (May 22) painted two possible scenarios Asia faces over the next two decades: One of a region at peace, with countries working together to advance shared interests, and another of a fractious Asia marked by territorial disputes and protectionism.

Speaking at the Nikkei Conference in Tokyo, Mr Lee highlighted how the interactions of three key countries – US, China and Japan – over the next 20 years will shape the future of the Asia-Pacific.

The US will remain the world’s pre-eminent superpower in 2034, Mr Lee said, while Japan "will still be one of the world’s largest economies, with great strengths in science and technology". But "the biggest change for Asia in the next 20 years will be the growth of China’s power and influence", he said.

[And how China exercises that power and influence.]


The new strategic landscape in Asia will depend on how the three nations interact with one another, said the Singapore Prime Minister. Should the US and China relationship strengthen and the Japanese economy recover its confidence, the region will reap the benefits of peace and stability.

"One scenario is that Asia remains at peace, with countries working together to advance shared interests, while competing peacefully with one another," he said.

"A stable strategic environment will help foster regional economic cooperation. Greater economic interdependence will raise standards of living for all, and contribute to a peaceful region in a virtuous cycle."

In this scenario, members of the Association of South-East Asian Nations (ASEAN) will be able to "deepen their cooperation and integration" and remain "an effective neutral platform for major powers to engage one another".


However, should the rapid growth of China force an imbalance in the region and in the US-China pivot, Asia "will be contemplating another, less benign scenario", one marked by territorial disputes and nationalist populism, Mr Lee said, citing maritime disputes in the East and South China Seas as well as the recent anti-China protests in Vietnam as examples.

In this scenario, ASEAN nations will be forced to choose sides, with South-East Asia becoming "a proxy battleground" for friction between the superpowers, he said.

"Such a strategic climate inevitably sets back economic integration. There are more trade disputes and currency wars and tit-for-tat protectionism. The result is less shared interest in one another’s success, more frictions and disputes, and fewer restraints on countries when things go wrong," he told the audience in Tokyo.

"Everyone loses in such a scenario."


Two critical factors will play a large part in determining the region's fate over the next two decades, he said. First, US-China relations - "the most important bilateral relationship in the world", but one which can easily spiral out of control should a flashpoint escalate into violence.

Second, the uncertainty over the Korean peninsula. "Quite possibly the status quo will prevail, with repeated brinksmanship and occasional tensions, but hopefully no war. Even in the absence of a war, failure to denuclearise the Korean peninsula poses a continuing risk."

Mr Lee concluded his speech by calling the next 20 years a "historic opportunity" for Asia.

"I have described these uncertainties and scenarios vividly, to help us visualise how things could turn out. I am not predicting what will happen, but describing what may happen.

"Whatever the forces driving the politics and policies of each country, ultimately we share a common interest in peace and prosperity in Asia. All stakeholders big and small have a responsibility to make this vision come true."


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