Leaders join forces to battle recession

The economic crisis tops the Asean agenda as members agree to fight protectionism while differences over Myanmar dog the summit.

HUA HIN, THAILAND // The international economic crisis dominated this year's annual summit of South East Asia's leaders, but political differences within the group plagued attempts to find increased unity despite the leaders agreeing in principle to making the bloc "people-centred". The Asian alliance has always preferred to concentrate on economic co-operation and avoid confrontation and sensitive issues such as human rights and democracy. The regional grouping, the Association of South-east Asian Nations (Asean), agreed to prevent protectionism and to promote economic integration within the bloc in response to the downturn.

"We agreed to push forward with the creation of an Asian economic community and strengthen the region's resilience," the current chairman of Asean, the Thai prime minister Abhisit Vejjajiva, told journalists at the end of the two-day summit. Open markets, unity and integration were the key elements of the region's economic recovery plan, according to the Thai premier. Throughout the meeting, the leaders were preoccupied with the economic problems in the United States. Many fear that Washington may now be tempted to introduce protectionist measures to help stem the severe economic downturn. This would be bad news for many South East Asia countries that rely heavily on exports, particularly to the US.

"We had a strong message for the US, and for all countries: protectionism is not the answer to the current economic crisis," Surin Pitsuwan, the secretary general of Asean, said. The experience of the Asian economic crisis in 1997 shows that bolstering exports is an effective policy for the countries in the region to revive their economies in times of crisis, he added. Several key measures were adopted as part of the overall blueprint for economic revival and future development. These included establishing a regional rice fund, sharing oil resources, and increased co-operation in ensuring energy security. There were also separate agreements on promoting tourism in the region.

However, the main policy position was the need for increased liberalisation of the region's economies and to speed up their integration. "We are committed to free trade and will do whatever we can to prevent countries from resorting to protectionism to ease their way out of recession," Mr Abhisit said. "We need to accelerate the development of an attractive single market and production base that will help attract foreign trade and investment," the Thai prime minister told journalists at the start of the summit. "If we start going down the route of protectionism, everybody will go down. It doesn't help anybody at the end." South-east Asian nations have also now agreed to open up their markets further in a bid to create an economic zone loosely modelled on the European Union, but without a common currency, by 2015.

The group has said it needs to improve its competitiveness as China and India, the world's two fastest-growing major economies, are increasingly attracting more foreign investment at the expense of South-east Asia. "Regional co-operation becomes even more important as we seek to pursue joint approaches and pool our resources to cope with difficulties that we all face," Haruhiko Kuroda, the Asian Development Bank president, told the leaders earlier at the summit. But the leaders agreed that the group needed to look beyond its own borders for assistance if economic recovery were to be accomplished. "We must reach out further, beyond the region," said Mr Abhisit. Asean can help the two power houses in Asia - India and China - to fuel the recovery, the Singaporean prime minister, Lee Hsien Loong told reporters yesterday. "At present the Asean engine is only working at half-strength," he said. The Asean countries, together with Japan, China and South Korea, agreed last week to form a US$120 billion (Dh440bn) pool of foreign-exchange reserves that can be used by countries to defend their currencies to battle fallout from the global financial crisis. Asean, comprising Indonesia, Thailand, Malaysia, Singapore, Brunei, the Philippines, Cambodia, Laos, Myanmar and Vietnam, has a combined gross domestic product of more than $1.1 trillion and a population of about 570 million. But more controversially, the organisation has billed its vision of the future as a "people-centred" approach. "We do care about the people," the Malaysian prime minister, Abdullah Ahmad Badawi, said. "We want to hear the voices of the people." This year's summit theme, "Asean Charter for Asean Peoples", was meant to introduce a dialogue between the leaders and civil society groups. But it got off to a wobbly start when Cambodia and Myanmar refused to recognise the groups representing their countries. The meeting was almost cancelled, but went ahead when the Burmese and Cambodian delegates withdrew from the civil society delegation that was met by the leaders on Saturday. "We must take gradual steps and encourage wider participation. This is something new. This is the first time and we will continue to make more progress," Mr Abhisit said. "It won't be the last time," Mr Badawi added. But the issue of Myanmar continued to dog the summit. In the past the member countries have been reluctant to criticise the country's leaders. This year some leaders, at least privately, did voice their concerns. The Singaporean prime minister told his counterpart from Myanmar that there was now an opportunity for the junta to engage with the US and the international community - one that they should take, said one diplomat who declined to be identified. "Asean will lose credibility if it is unable to sort out problems in our region," Lee Hsien Loong told the prime minister of Myanmar during the leaders retreat yesterday. Many Asean diplomats are aware that Myanmar's human rights record and reluctance to introduce political reform are tarnishing the image of the organisation as a whole and undermines its credibility. "As we prepare for the future as a group, increasing awareness of human rights and establishing a human rights body, Myanmar continues to lock up its political dissidents - and there is nothing we can do to change the generals' minds," said one diplomat. "Asean will not change until Burma changes," said Khin Ohmar, a leading pro-democracy activist from Myanmar. [e-mail]