The Asian Century - Again

On Wednesday 28 September 2011, Australian Prime Minister Julia Gillard gave a speech to the AisaLink and Asia Society Lunch in Melbourne. It was an important statement about the focus of the Australian government on the changing nature of the global community, making it clear that new relationships will be built on economic connections. The Prime Minister took the opportunity to announce the commissioning of a white paper on Australia in the Asian Century. This somewhat dull announcement actually starts the government's strategy to create the frameworks and foundations for Australian economic success in the new global environment.

This is an encouraging development, though we feel there is at least one weakness. Every major global economic and political shift has also resulted in major changes in values and cultures. These changes have been fundamental to the the economic changes that have occurred, in our view often driving them for better or worse. Over time, these changes have usually evolved to establish better, more prosperous and healthier communities, so they are changes to be embraced though there can be rocky roads along the way.

The Prime Minister did acknowledge this reality, when she discussed the impact of the industrialisation of Britain, noting:

It remade private life, changing everything from the shape of the family home and the layout of cities to the experience of childhood and what it meant to be a woman.

We are not just moving to an Asian century, but actually returning to another Asian era. Long before the rise of the USA, Japan, Europe and the notion of a western world, the civilisations and economies of Asia were phenomenally influential.

Each of the changes in economic influence throughout history has required fundamental changes in values and culture before long-term economic success and social stability has been established. Examples of current values and cultures in the Asia that will need to be strongly considered include:

• The focus on building thriving communities, which includes protecting jobs ahead of protecting profit
• The strong influence of family and community involvement in business, recruitment and management which assists in maintaining values but can result in bureaucratic, skills and innovation weaknesses
• The higher levels of government willingness to protect their economies from "free market" and investment manipulations which provide immediate returns to external investors but can damage local economies

We can't pretend that Asian values and cultures are in any way unified, and we will be dealing with a time of great diversity as the new Asian Century grows.

Apart from this weakness on values and culture, the announcement is both encouraging and important. Here are some of the key extracts from the speech which illustrate why it is an important development (some words have been omitted and the order changed to maintain the overall sense of the speech):

For all the strength and resilience of Japan and the US, we are now seeing the most profound rebalancing of global wealth and power in the period since the United States emerged as a major power in the world. This rapid growth in much of Asia will change the social and economic, strategic and environmental order of our world. ...

As recently as 1990, the Australian economy was larger than the ten economies of ASEAN combined. Today, we’re about two-thirds the size of ASEAN’s economies in market exchange rate terms. ...

I summarise our new strategic environment as simply as this. Australia hasn’t been here before.

Here, with our largest export market and largest trading partner neither a democracy nor part of our alliance system, a nation whose economic transformation is in turn transforming the economic and strategic balance of our world. A new China.

Here, with an English-speaking democracy with 1.2 billion citizens, rising to find its place in the world and our region and on an ocean whose shores we share. A new India.

Here, with the world’s largest Islamic population living in the world’s third largest democracy, one remarkable and too little remarked-upon country, every day disproving the millions of words spent arguing that Islam and democracy are incompatible. A new Indonesia. ...

Just one illustration of that shift: the emerging and developing world could well be a net foreign investor, while developed countries become net foreign borrowers, as early as 2025. ...

In the Asian century, what used to be considered our traditional disadvantages – our reliance on natural resources, our location in the world – become great new strengths. ...

In the Asian century, business as usual is not enough. Because what we know clearly is there isn't a single aspect of government policies and national planning that won't be touched by the great changes to come. Food security and foreign investment, immigration and education, stock market structures and financial regulation, energy policy and environmental standards.

It is pleasing to see this focus on Asia from the Australian government. We can only hope that the project team developing the white paper understand that real, sustainable success will also require a review and statement of the values and cultural requirements, as well as the economic challenges, if Australia is to play a key role in the continuing development of this region and the global environment.