[OUTLOOK]Wanted: Asian economic leaders

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[OUTLOOK]Wanted: Asian economic leaders

Today we are seeing a surge in cooperation among neighboring countries to enhance regional economies. This regionalism is accompanying the trend toward more global interdependence as communications and transportation improvements make the world more and more a global village.

In Europe, efforts to establish a European economic community started soon after World War II, accelerating the trend of regionalism, and recently, almost all of Europe began using a single currency, the euro.

On the North American continent, the North American Free Trade Agreement was concluded under the leadership of the United States, tying the continent's dominant economy with those of its neighbors, Canada and Mexico.

But there have been very few efforts to institutionalize cooperation among nations in Northeast Asia, which includes the world's second biggest economy in Japan and the promising economy of China with its 1.3 billion population, not to mention Korea, the leading country among the newly emerging industrial states.

The reason for this lack of cooperation is fairly obvious; it has been less than half a century since the three countries in the region emerged from the shadow of a dark and tragic political and military history; there is still a great deal of distrust and misunderstanding hanging in the air and a tendency to eye each other warily.

A glimmer of hope in this depressing picture came in the shape of a grand disaster, the Asian financial crisis of 1997 and 1998, when Asians learned the virtue of cooperating with their neighbors for the sake of their economies. China, Japan and Korea were no exceptions; their governments began in earnest to take measures to boost economic cooperation. But conditions are not yet ripe for these three countries to sit down for a three-way economic discussion. They only recently reached the stage of sitting down for a separate side meeting at the "ASEAN + 3" meetings among the 10 member countries of the Association of South East Asian Nations, China, Japan and Korea.

Is it indeed impossible to enhance regional economic cooperation in Northeast Asia? Scholars from the three countries and from Europe and the United States participated in a meeting in Honolulu recently to discuss the future of Northeast Asian economic cooperation.

The participants of the three Asian countries were unanimous in their calls for efforts to strengthen the institutional foundations on which the unlimited economic potential of Northeast Asia could be realized. The meeting also discussed in detail whether it would be possible to establish a Northeast Asian Development Bank to supply financial aid for the economic development of North Korea, Mongolia, China and eastern Russia.

The group also emphasized the need to further develop and expand the 2000 Chiang Mai Initiative, an agreement to provide currency support in the event of a financial crisis in any or all of the ASEAN countries or in the three Northeast Asian industrial economies.

Other issues discussed at the meeting were the construction of a railroad connecting the Korean Peninsula and the Trans-Siberian Railroad, the development of the plentiful natural gas reserves in Russia and the construction of a gas pipeline connecting China, Korea and Japan.

In addition to discussing ways to set up the "hardware" to fortify cooperation efforts in the region, the group also discussed the establishment of institutions to oversee cooperation on "software" issues such as introducing legal and other systems that meet international standards, improving the governance of business corporations and enhancing the transparency of statistical data.

But all these concrete, detailed suggestions offered at the meeting would be useless if the political leadership in China, Japan and Korea does not have the vision to carry them through. The most urgent need is a future-oriented leadership in Japan.

It is up to the Japanese leadership to erase the lingering tensions of the past among the three countries and to provide the conditions for the mutual prosperity of the entire region.

For the time being, China might resent Japan exercising any strong leadership despite the benefits it would see from close economic cooperation between the three countries. This is where Korea, maintaining a neutral position, should step in to pave the way for economic cooperation to take off smoothly.

I look forward to the appearance of visionary political leadership in China, Japan and Korea that could further enhance economic ties in the Northeast Asian region to the benefit of all the nations in the region.


The writer is the chairman of the Institute for Global Economics.

by Sakong Il

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