ASEAN meet dwells on slowdown in global economy

By Amit Baruah

HANOI, JULY 26. A considerable amount of time was spent at the ASEAN Post- Ministerial Conference (ASEAN+10) meeting today on the implications of the slowdown in the global economy and strategies to address this crucial issue.

It is a measure of concern about the slowdown in the U.S. economy and its ramifications for many countries in the Asia-Pacific region that Foreign Ministers dwelt at length on this.

The Deputy Chairman of the Planning Commission and the leader of the Indian delegation, Mr. K.C. Pant, said the meeting was taking place at a time of ``global economic uncertainty.''

``Even in late 2000, the prognosis was that the world economic recovery was gathering momentum. The optimism, however, seems to have given way to marked uncertainty...a prolonged slowdown, combined with the persistence of high oil prices and virtually stagnant non-fuel commodity prices, would increase the vulnerability of non-oil importing developing economies,'' Mr. Pant said.

``Those countries which have strong domestic demand have been less affected by the global slowdown. This makes it clear that in our national policies, we should lay emphasis on growth of all sectors of our economy and not just the export sector. We should lay emphasis on the growing domestic demand which alone can provide a buffer against the shrinkage of the export market,'' he said.

Mr. Pant stated that even when the current economic slowdown reverses, global growth if dependent on the health of economies of the industrialised nations, is bound to remain fragile. ``The answer to the global economic slowdown lies in increasing demand...only a massive and sustained influx of resources into the developing world can ensure a demand for goods and services. These resources will act as enablers of development and hence as enablers of demand. We need resources for our infrastructure development, in roads, railways, communications, education, health etc...''

The leader of the Indian delegation said that fundamental structural changes are required in the use of global resources - lowering of interest rates, depreciation of currencies, reduction in wage bills - but are not the essential scaffolding needed for a demand-driven, dependable and integrated world economy.

Referring to the meeting of G-8 leaders in Genoa last week, Mr. Pant said the grouping could ``sell'' globalisation only if it shows leadership in making development its prime agenda combined with the reduction of global poverty.

He said it was imperative for the international community to spearhead a global initiative on the provision of universal primary education. ``There can be no clash of interests in respect of aiming for universal education. It has also been said that each year of additional schooling in developing countries can raise a child's future earning by 10-20 per cent...

At the same time, multilateral funding for education in the developing countries is shrinking, and the total resources available hardly make up the $7 billion-$9 billion annual increase that UNICEF estimates rich and poor countries will have to contribute together to get every child into school by 2015,'' he said.

In his intervention at the meeting, Mr. Pant stressed the important of working with the CLMV (Cambodia, Laos, Myanmar and Vietnam) countries in the areas of infrastructure, human resource development and information and communication technology.

``India has a number of bilateral programmes with the CLMV countries. They are now being supplemented by our joint projects with ASEAN, and will be further bolstered by those that we have identified under BIMST-EC (which groups Bangladesh, Indian, Myanmar, Sri Lanka and Thailand) and Mekong-Ganga Cooperation.

``We understand that ASEAN has emphasised infrastructure, human resource development and information and communication technologies as the key drivers of IAI (Initiative for ASEAN Integration). We believe that India's cooperative endeavours with the CLMV countries have a focus appropriate to the IAI,'' Mr. Pant added.

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