19 September, 2012

Asia-Pacific’s Development Challenge


Regular readers of my blog will be very familiar with the significance of the year 2020 for Malaysia. We can now add another milestone to that year as it is when we will be hosting world leaders from across Asia-Pacific for the annual APEC Summit. This was decided last week whilst I attended the 2012 APEC Summit in the Pacific port town of Vladivostok.

Vladivostok may sound like a far-off land to Western ears, but Russia’s “Lord of the East” has been going through a phase of rapid development. The investment into Vladivostok reflects a deeper change in the global economy: it’s perhaps a cliché but now also a truism to say that the centre of gravity is shifting from West to East. And today, the caucus of East and Southeast Asian countries within APEC are more wealthy, developed and powerful than at any point in their history. These nations now account for nearly a third of world GDP – and this share is rising. Concluding negotiations on the Trans-Pacific Partnership (TPP) by the end of the year– something that I was pushing at the summit – will surely help steepen this rise.

At a time of stunted economies and sputtering markets, countries such as Malaysia, Indonesia and Thailand are rays of light in otherwise overcast skies. We represent a growing band of Asian countries that have liberalised their economies, developed capital markets, and invested in industries with a competitive advantage. And as a result, we have become more intricately woven into the fabric of the world economy; more exposed to global risk, but also more able to shape the economic narrative.

But rather than being triumphalist about our new found position, we understand that this increasing influence bestows greater responsibility. From meeting the rising expectations of our nations’ growing middle classes to taking a more prominent role in profound issues that have ramifications across the globe, such as food security – a challenge that straddles the economic and the ethical, affecting the growth of nations, the livelihoods of communities and the survival of people. And along the way, Asian nations must also meet the diplomatic growing pains we face; witness the challenges in the South China Sea.

As we grapple with these economic, political and security issues, regional forums such as APEC have taken on a new significance. They can help foster greater dialogue, compromise and understanding between nations, making it easier for countries to deal with their problems peacefully and providing a platform for us to solve shared challenges that will dictate our future. If ever there was a time for us to work together to meet our common goals, it is now.

As in the case of the South China Sea issue, I am of the firm belief that diplomacy, multilateralism and co-operation between Southeast Asian nations is the best way to ensure simmering tensions do not boil over into conflict and confrontation. These are also principles we are promoting through the Global Movement of Moderates – and I was pleased to hear US Secretary of State Hillary Clinton express her Government’s strong support for the GMM whilst at APEC.

Of course, not all challenges can be solved through diplomatic trouble-shooting alone. APEC is the sum of its parts – every member nation has to decide the direction it wants to take. For me, the most important thing we have to ask ourselves is how we can chart a new course for Asia-Pacific: one where open politics and open economies bring prosperity for all.

In Malaysia, we believe that our future lies in an open, dynamic economy with a free and competitive politics. To this end, we have liberalised service sectors, divested state ownership in well-established companies and targeted investment in key industries. As a result, our economy grew by 5.4% in the second quarter of this year, beating market expectations; inflation and unemployment both remain low; while our stock exchange has hit record highs and been home to the world’s second and third largest company listings this year, with more to come. Considering all this, it is perhaps no surprise then that during APEC we were invited to host the Global Entrepreneur Summit next year – an offer I was happy to accept.

Crucially, however, as our economy has developed so has our democracy. In the past year, the Government has ended Malaysia’s decades-old state of emergency; replaced the Internal Security Act – that permitted detention without trial – with legislation that allows police to detain terrorist suspects for the purpose of active investigation for up to 28 days; introduced legislation to liberalise the media; widened the scope for student participation in politics; and, most recently, repealed the colonial-era Sedition Act. I believe this combination of economic and political reform is the ultimate guarantor of security and growth, not just in Malaysia, but in the region as a whole.

That is the case I made at this year’s summit. Each country must make choices that get to the heart of true development: do they want to be free, open and democratic nations? Or will they succumb to the temptation to batten down the hatches, hide behind protectionist walls, and suppress political dissent? As Asian countries rapidly modernise, the answers to these questions become more urgent, not less. And as leaders meet in Malaysia in 2020, I hope we’ll be able to reflect that the right answers were chosen.