APEC and Globalisation
May I commence with two expressions of thanks. First, I thank the APEC Secretariat for the invitation to make a contribution to this Seminar and to participate in the opening of your new APEC Secretariat building. Second, I would like to thank the Government of Singapore for the provision of these new headquarters. This is a further manifestation of your continuing and substantial support for this organisation.
When I first publicly broached the concept of APEC in a speech in Seoul on January 31st 1989 many of us had the feeling that the world was entering a new era. Four elements were at the forefront of our thinking. First, while none of us could have foreseen the rapidity with which the Soviet Union would actually disintegrate, the days of hegemonic confrontation were clearly disappearing under the reformist influence of Gorbachev. Second, the centre of gravity of economic power was shifting from mid-Atlantic to mid-Pacific with the appetite of the massive United States economy helping to sustain the emerging tigers of East and South Asia. Third, in particular, after more than a decade of moving towards a market economy and opening up to the outside world it was clear that China was going to be an increasingly significant factor on the world economic scene. Fourth, as a contextual background to all of this, the technological revolution, particularly in computers and tele-communications, was rendering national borders less and less relevant to decision-making by major players in the private sector. As what came to be termed "globalisation" was emerging, it seemed to make sense to increase co-operation at the official level between countries in the world's fastest growing region.
The unarguable reality, and force, of these four elements ensured that we experienced a remarkably brief gestation period from that day in Seoul to the first Ministerial meeting of APEC in November 1989. There were, of course, some genuine concerns to be dealt with, none of which was pressed more strongly than the initial fear of some ASEAN member States that what was being contemplated could be a rival to that organisation.
A defensive structure established to counter the very real threat of communist expansion and subversion in the region, ASEAN had achieved a status beyond the expectation of its creators in 1967. It was essentially a political grouping and, as such, had not really created any organisation or structure for enhancing economic cooperation and growth in the region. The phenomenal growth which had occurred within ASEAN and its neighbours was the result of individual countries pursuing policies of market liberalisation, competition and the creative use of high savings for investment in economic development. We envisioned APEC as effectively filling this void. We were, however, conscious of ASEAN members' proper pride in their organisation and we used our good relations and acceptance by them, both bi-laterally and in the post-ASEAN ministerial dialogues, to give them confidence in the important role APEC could play in the future.
The truth of course is that there is no absolute line which compartmentalises economic from political considerations. In this sense the decision of APEC to inaugurate the annual Leaders meeting in 1993 was an important and logical step forward for the organisation. While, in a formal sense, political and security issues are not on the agenda for these meetings, the reality is that the meetings provide the only regular opportunity for the leaders of the most dynamic region in the world, covering some half of global trade, to discuss these issues in an informal environment.
So my friends that was the background of my thinking fourteen years ago when, with the necessary and invaluable support of so many others, we set about the creation of APEC at a time of relatively high optimism about the general political environment within which it would operate. What are we to think today?
As I observed recently in Australia I would suggest to you that there has probably not been a period within our collective recall when the likely course of economic events has been more subject to exogenous political factors. Nor has there been a time when our accumulated knowledge and personal experience has been of less utility in understanding, with any degree of confidence, how these political factors will unfold.
Some may question that proposition by referring back to the more critical moments of the Cold War; but, in fact such reference precisely emphasises the validity of the point I am making. As novel, in their unprecedented power of destruction, as were the arsenals at the disposal of the major adversaries during that extended period of conflict, the conflict itself was set in an historically recognisable framework. That framework had a constancy characterised by two dominant factors: First, in the tradition going back more than 300 years to the Treaty of Westphalia, the protagonists were nation-States, clearly identified national entities with identifiable borders. Second, the concept of self-preservation underlay all strategic thinking and planning - it was assumed that the enemy would see no virtue in his own destruction.
Indeed this concept was at the heart of the doctrine - Mutually Assured Destruction (MAD) - which, while not morally attractive, had the supreme merit of avoiding for some 40 odd years, until the demise of the Soviet Union, the unleashing of atomic weapons. Through the accumulation and deployment of massive numbers of such weapons, neither side would make the first move for fear of provoking its own destruction.
We now live in a world made the more dangerous by the fact that those two characteristics have disappeared. It is a world where the enemy - international terrorism - is not defined or identifiable by national borders, and where significant components of the enemy see a positive, indeed glorious, virtue in their own demise in the pursuit of their "holy war".
In my judgement it is virtually impossible to overstate the dangers or the complexities that these facts have introduced into the world we face today and the future we contemplate.
And, for us today, these dangers and complexities form a sombre, unavoidable backdrop to any consideration of future developments in our region. Paradoxically, one of the factors which I believe is going to have a positive impact on these developments arose out of the very tragedy of 9/11 which dramatically highlighted this new enemy and was reflected in an important event which occurred one week later on the other side of the Atlantic.
On 17th September 2001 in Geneva the final terms of China's accession to the W.T.O. were agreed by the rest of the world including the United States. The agreement by the U.S. formulated some time earlier, was the warmer and more whole-hearted because of China's reaction to the tragic event a week earlier.
China was not only unqualified in its condemnation of the attack and its extension of sympathy to the people of the U.S. It immediately indicated its preparation to co-operate with the U.S, in the fight against international terrorism. The extent of that commitment is graphically illustrated by the fact that China has been prepared to accept what had previously been anthema to it - the stationing of American armed forces in the Central Asian republics.
I have long believed that one of the most crucial factors in determining the likelihood of a peaceable international environment in the region - and thus the best circumstances for optimising economic growth - is the quality of the U.S.-Sino relationship. It is for this reason that I would claim the strengthening of that relationship is the one significant positive factor to emerge from the tragedy of 9/11.
Important as is this development, it is a fairly solitary silver lining in the dark clouds that represent the globalisation of terrorism, a globalisation which has a particularly sombre resonance in our region. It was only exceptionally good intelligence work by your Singaporean authorities in collaboration with other national agencies that prevented what could have been a devastating attack upon a number of embassies, including Australia, here in December 2001. The Bali outrage in October of last year in which 88 Australians lost their lives was the deadliest of a number of terrorist attacks in Indonesia and the Philippines.
What does this new terrifying dimension of globalisation mean for APEC? More than anything else, I suggest, it means the absolute necessity for APEC members to renew an unqualified commitment to the basic objectives and principle which underpinned its foundation. Those objectives were the liberalisation and facilitation of trade based upon the principle of "open regionalism" i.e. a commitment to making trade liberalisation within free trade agreements available to all trading partners. In particular it means that APEC members, individually and collectively as an organisation, should bend their best endeavours to working for a successful outcome from the Doha Round of multilateral trade negotiations, the next stage of which takes place at the Ministerial meeting at Cancun next week.
There is no single answer to the unprecedented challenge of globalised terrorism. But we can say with certainty, that one element of meeting that challenge is for the developed world to do everything it can to give the countries of the under-developed and developing world the best possible chance to develop their economies and lift the standard of living of their people, so many hundreds of millions of whom are living in conditions of poverty. One of the great obscenities of our world today is that the relatively meagre levels of official development assistance are being rendered nugatory by the fact that the rich countries doling out that assistance are preventing the recipient countries from achieving such economic development by denying them open access for their agricultural products. OECD countries - in particular the United States, Europe and Japan - spend more than $350 billion, or a billion dollars a day, in protecting their agricultural sectors.
The time is long past when we should continue to tolerate the hypocrisy of these countries who while, rightly preaching the merits of the competitive market system, condemn the least privileged nations in the world to perpetual poverty by the refusal to give effect to the principles of that system in their international trading policies. Nothing could be more calculated to provide fertile breeding grounds for the message of hatred of global terrorists. If considerations of morality are not sufficient to change these pernicious policies, enlightened self-interest should. I believe, profoundly, that APEC should be using every influence it can command to be in there leading the fight for decency and sanity on this critically important issue.
I concluded my speech on 31st January in Seoul 1989 launching the APEC concept with these words:
"We have much to offer each other. We have substantial shared political and economic interests, and a powerful complementarity in our economic skills, resources, and business, cultural and political links.
Co-operation offers the region the opportunity to influence the course of multilateral trade liberalisation, avoid alternative approaches which would undermine this objective and enable us to enter into the next century with confidence that our potential will be fulfilled."
My friends, we have emerged from that twentieth century, one of the bloodiest in mankind's history. The first wave of globalisation in the industrial era that had occurred during the later years of the nineteenth and early years of the twentieth centuries came to an abrupt end with the onset of the First World War in which 10 million people were killed. The economic autarky following that conflict was a major factor in the lead-up to the Second World War, twenty one years later, in which another 70 million lost their lives.
Although the Cold War diverted trillions of dollars from constructive development - the military budget of the U.S., alone, during the period of the Cold War was $15.8 trillion in current U.S. dollars - the world showed that it had learned its lesson from that disastrous inter War period by moving, albeit haltingly, towards a more liberalised international trading regime. As I said in Seoul the multilateral system of global trade, under the auspices of the GATT had provided more than four decades of growth for the world's economies. And I emphasised the special importance of this for our region: "If one had to isolate the single key factor underpinning the growth of all the dynamically performing nations of the region, it would surely be their capacity to take advantage of a relatively open and non-discriminatory international trading system."
And so it was that I spoke optimistically then in 1989 about our capacity to enter this century with confidence that our great potential will be fulfilled. And much of what has happened since 1989 has justified that optimism, not least the very practical ways in which APEC has lived up to our hopes in the areas of trade liberalisation and facilitation.
But, as I have indicated, there are sombre, indeed frightening entries to be made on the other side of the ledger of expectations as we face this new century. It is only by harnessing in a constructive and co-operative way the power of that complementarity of skills, resources and links I emphasised in Seoul that we will maximise our capacity as a region to contribute to the defeat of these dark forces which threaten our future.
And, speaking of cooperation, may I conclude by putting the case, briefly, for our Asian partners in APEC to look more positively at Australia's desire to be part of the emerging new architecture of cooperative arrangements including ASEAN + 3 and ASEM.
I think we can best understand why it is reasonable that you should do this by addressing directly the question that is so regularly posed - is Australia part of Asia? My answer to this question is quite direct. In terms of dominant ethnicity, cultural and political traditions we are clearly not part of Asia. But the question, I think, misses the point. You in Asia understand those facts and I do not believe that you require as a condition of cooperative relationships that we have to move to a position where a majority of our population is of Asian origin (although I am pleased to say that the proportion is substantial and the fastest growing element of our population growth) or that we have to abandon our cultural and political heritage.
Rather I hope you will understand the reality of our geographical contiguity and the increasing integration of our economies, with two-thirds of our exports going to the Asian region. To optimise our relationships and to be positively responsive to our desire to be included in this new emerging architecture, what Asia is entitled, reasonably, to expect of us are four things: that 1) we recognise the enormous task you are still facing in developing your own economies and meeting the challenges of an increasingly competitive globalised economy, 2) we not preach to you on the basis of some implicit assumption about the superiority of our values system; 3) we do not tolerate, or in any way encourage discrimination on the basis of race (may I say on this point that I trust you will have noticed what has happened to Pauline Hanson and that her party has dissipated to the point of statistical insignificance in the polls) and 4) we are not seen as an automatic ally of the United States.
As Prime Minister I certainly put Asia squarely at the forefront of the conduct of Australian foreign and trade policy. Without being exhaustive in listing the initiatives we undertook in establishing Australia's standing and bona fides in the region let me mention
a) the creation of the Cairns Group as an integrally important negotiating bloc in the moves toward a liberalised international trading system
b) the initiation of APEC
c) the initiative, resisted at first by the United States, in opening up to Vietnam and
d) the initiative for the settlement of the Cambodian issue that led to Gareth Evan's nomination for the Nobel Peace Prize in 1992.
While I have had, and continue to have, disagreement with some of the foreign policy positions of our current government - and this is not the place to elaborate on them - I have no doubt that it shares the views I have expressed about the fundamental importance of our relationships with Asia and the desirability of Australia being part of the new architecture to which I have referred.
It is worth mentioning developments in two areas which, while of considerable economic importance, have a wider significance through time in broadening and deepening mutual understanding between Asia and Australia. First, tourism: Asians contribute the fastest growing element of overseas tourists to Australia, amounting to the order of 50% of all visitors. Tourists from China in particular have been increasing rapidly and it is estimated that by the year 2012 they will be 1.37 million or 13% of the total.
Second, education: we have more than 200,000 Asians studying in various levels of our education system and a large number of Australian educational institutions are directly involved in co-operative ventures with your schools and Universities throughout Asia.
In conclusion let me say how proud I am of Australia's involvement in the creation of APEC. We began our work together in this great organisation at a time of optimism unparalleled in the post-war period. The flowering genius of human technological achievement held out the opportunity of a more integrated world, significantly more free from the threat of international conflict and the diversion of productive resources to the preparation for possible war.
That genius has not withered nor will it. Unfortunately, the products of that genius are capable of being used for evil as well as for betterment of humankind. In the hands of those bent upon evil a capacity has been provided not only to destabilise our world but to threaten our very civilisation. I trust that the spirit which motivated us to establish this organisation as a means to help create a more prosperous and secure region will not be diminished by fear. Let us all who are part of APEC do everything that we can, together, to meet these new challenges and achieve those visions which inspired us fourteen years ago.