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Anthony Rowley
Anthony Rowley

Macroscope | A truly Asian economic bloc – can Asia succeed where it failed?

Buffeted by Trump’s disruptive policies, Asia should seize the chance to reassert the need for regional integration as the US retreats

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South Korean President Lee Jae-myung (right) and Japanese Prime Minister Shigeru Ishiba shake hands on the sidelines of the Group of Seven summit in Banff, Alberta, on June 17. Photo: dpa
Anthony Rowley

“It’s an ill wind that blows nobody any good,” to quote a centuries-old proverb. It is one that could be applied now with justification to the ill winds sweeping across the Pacific from US President Donald Trump’s America to Asia.

These disruptive currents are creating geopolitical turbulence, economic disruption and financial instability. However, the opportunity they present for Asia to challenge the post-war economic order and reshape its own destiny has received less attention.

Among the more glaring examples of the United States leaning heavily on Asian leaders to abandon domestic initiatives was its strong opposition to the East Asia Economic Caucus, which was proposed as early as 1990 by then Malaysian Prime Minister Mahathir Mohamad.
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Not long after, the Asian financial crisis wreaked havoc on economies across the region. Eisuke Sakakibara, then Japan’s vice-finance minister for international affairs, proposed the launch of an Asian monetary fund to counter what were seen as the International Monetary Fund’s faulty policy prescriptions for Asia. The idea fell through and a less autonomous regional arrangement was introduced in the shape of the Chiang Mai Initiative, a currency swap deal involving the Asean+3 economies.

In 1991, former South Korean prime minister Nam Duck-woo proposed the establishment of a Northeast Asia Development Bank during a lecture in Tianjin. Like Sakakibara’s proposed Asian monetary fund, such a development bank would have given East Asia considerably greater control over its own economic development and destiny than the region enjoyed at the time, but it was not in line with the US vision for the Asia-Pacific.

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In recent decades, China has put forward its Belt and Road Initiative and the Asian Infrastructure Investment Bank (AIIB). The US was not in a position to stand in the way of either of these initiatives, but it was able to all but boycott them and as a result deprive them of support from Japan, the biggest US ally in the region.
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