Making growth work for Asia's poor in the Asian century

(Special meeting of the International Conference of Asian Political Parties (ICAPP) hosted by the Communist Party of China in Nanning, Guangxi, People’s Republic of China; 4-6 September 2011)

On behalf of ICAPP’s Standing Committee, we thank the Communist Party of China led here by H.E. Zhou Yongkang of the Standing Committee of the Political Bureau, H.E. Wang Jiarui, Minister of CPC’s International Department, Vice Minister Ai Ping, Mr. Guo Shengkan, Secretary of the CPC Guangxi Committee, and Mr. Ma Biao, chairman of he Guangxi People’s Government, we are honored to welcome you all to Nanning — capital of the Beibu Gulf Growth Zone — on this maritime border of China and Southeast Asia.

Beibu Gulf — the “Gulf of Tonkin” to the Vietnamese — is the initial focus of ASEAN-China cooperation, under their free-trade agreement that became fully effective last year.

Close by are Vietnam’s port-city of Haiphong and its capital of Hanoi; Hainan island; six cities of Guangxi; and the inner cities of China’s most powerful growth engine — the province of Guangdong.

Already Beibu Gulf has attracted — Vietnam, Cambodia, Laos, Malaysia, Singapore, Indonesia, Brunei and the Philippines, and, most recently, Thailand — to the investment, trade, industrial and mining opportunities it offers.

Beibu Gulf objectifies the regional connectivity we all wish to nurture between the Chinese-ASEAN regions that make up natural economic territories. Eventually a growth corridor will run from Nanning through peninsular Southeast Asia all the way to Singapore.

Epochal achievements of the Communist Party of China

We, the Asian ruling and opposition parties, offer our fraternal greetings to the Communist Party of China (CPC) on its 90th anniversary.

The CPC’s achievements are extraordinary and epoch-making. CPC has restored the world’s oldest continuous civilization to greatness, and to its rightful place among the first-rank powers.

The CPC has restored social order, political stablity, and economic vigor to China after 150 years of rebellions, warlord conflicts, civil wars, and foreign invasions. And it has organized the greatest mass emancipation from poverty and famine the world has ever seen.

Since the CPC’s first reforms in 1979, China’s economy has grown 14 times in real terms; by 2006, it has pulled at least 400 million people out of poverty and into China’s new middle class.

Today China has the largest middle class society in the world, and in the process China has built perhaps the largest mass housing program in the world.

In its foreign trade, China has become a global powerhouse — a growth engine for the Southeast Asian countries and a driving force of the East Asian economic community.

In Central Asia, China leads with Russia and Kazakhstan the six-member Shanghai Cooperation Agreement (Shanghai 6). To the continents of Australia, Latin America, and Africa, it is a favored economic ally.

And, in the United Nations, China has become a voice or moderation, urging peaceful co-existence and non-interference in each other’s internal affairs.

We in ICAPP regard the CPC as a major force in our collective effort to bring the Asian political parties — both in power and in opposition — into a collegial whole, We count on the CPC to help us attain the vision we share of ‘One Asia’ and the emergence of the “Asian Family”.

Promoting people’s access to development

This special conference resulted from the CPC’s urging that our political parties focus on promoting people’s access to the fruits of development.

From the very beginning, the East Asian ‘tiger’ economies had established the principle of ‘shared growth’ to legitimize their authority and to win popular support. Over this last half-century, they have brought their peoples mass public housing, health care, basic education, modern infrastructure, jobs, and livelihood opportunities — all as dividends of the region’s rapid growth.

But large pockets of East Asian poverty persist because — left to itself — rapid economic growth accelerates income inequality. Growth benefits most of all those best equipped with the education, the skills, and the capital to take advantage of the opportunities the expanding economy offers.

Thus it is our task, the task of the Asian political parties to make sure those governments must make growth work deliberately for the poor. And, in my view, leaders, parties, and governments succeed best when in their policies they combine the individual initiative that capitalism stimulates with socialism’s compassion for those whom development leaves behind.

An East Asian economic model?

Indeed I propose that the East Asian concept of the market and the state not as competing but as complementary operating systems could become the basis of a new Asian economic model — particularly for the poor countries just entering the global economy.

Before the Heritage Foundation in Washington D.C. in 2009, I proposed a re-think of the dominant global political and economic system in the aftermath of the Wall Street meltdown, I suggested then that there might be merit in bringing together the best elements of both capitalism and socialism in a new applied art of governance — based on what works best for a particular society over a specific historical period.

The concept would integrate the finer features of Germany’s ‘social market’ economy, and should operate under the aegis of a liberal constitutional democracy committed to free elections, free markets, and a free press.

The emerging new “Arab Spring” governments, in search of new platforms, systems and structures of governance might consider a synthesis of best of capitalism and socialism.

In China, as we know, the paramount leader Deng Xiaoping, hero of China’s successful modernization and opening to the world, advocated — in fact started off — a Chinese economic system neither Marxian socialism nor Adam Smith-type capitalism, but something in between or what has been called “socialism with Chinese characteristics,” which has worked exceedingly well for China, lifting it to the second richest power in the world.

Asian Peace and Reconciliation Council

In the aftermath of the “Arab Spring,” the primary need of the new political order is to heal society’s wounds and lay the basis for political, economic and social reforms that will endure — because they are rooted in truth and justice.

It is in this constructive spirit that former political and civil society leaders met in Bangkok last August 24-25, and we agreed to establish an “Asian Peace and Reconciliation Council” to be headquartered in the Thai capital and headed by global civil society leaders to assist and advise governments that are ruling in the aftermath of internal conflicts set off by citizens asserting their political and human rights. We urge the relevant ICAPP parties to work with this Asian Peace and Reconciliation Council.

Raising an Asian middle class

I believe our ICAPP end-goal should be to raise strong middle classes as the foundation of Asia’s political stability, economic growth, and cultural progress.

The income gap we must narrow — as China and the CPC are doing, between China’s coastal regions and its interior provinces — by building infrastructure and institutions in rural areas that link them to big-city markets, capital, and technology.

Raising the poor from poverty is the only way of incorporating them into the modern economy.

We must also ensure our economies generate not just more jobs but more quality jobs. While Asian economies may be growing adequately, the jobs they offer are often still inadequate to support middle-class life-styles.

In emerging economies, low-quality jobs raise equity problems. Under conditions of high growth, high-income earners get the greatest benefits — and this creates social tensions that threaten the sustainability of growth.

To guarantee a measure of social equality, we must also ensure growth is broadly based. In an ex-colonial country like the Philippines, where there are only the weakest linkages between the urban and rural economy, the big-city economy could grow substantially without benefiting people outside it.

Agriculture: Not stepchild of development

In China, Thailand, Indonesia, and Vietnam — as in Japan, Taiwan and South Korea a generation earlier — the building of a strong class of independent landholders through tenure reform, followed by the laying of irrigation networks, farm-to-market roads, and the new agricultural inputs, followed by exports-oriented industrialization, saw to it that rural people shared substantially in the benefits of rapid growth.

Basically, governments and political parties must stop treating agriculture as the stepchild of development. We must shift the emphasis of public investment from the modern to the traditional sector. In my view, we cannot escape eventually adopting time-bound ‘positive discrimination’ programs for our poorest provinces and local communities.

An Asian Anti-Poverty Fund

As you know, we in ICAPP have long been advocating the establishment of an Asia-wide ‘Asian Anti-Poverty Fund’, endorsed in our Kunming Declaration last year, and which UN Secretary-General Ban Ki-Moon has encouraged in conversations with our Secretary-General Chung Eui-yong and Cambodian Deputy Premier Sok An’s special representative, Undersecretary Sous Yara.

The modest start-up capital of $10 million for this Fund, since I and others first proposed it for ASEAN a few years ago, the 10 ASEAN states have accomplished and contributed; but the Fund is not moving, it is moribund. Let us ask ASEAN to now take the lead and contribute the $10 million as seed capital for the Asia-wide Anti-Poverty Fund proposed by ICAPP. Indicating worldwide interest, the Latin American Political Parties under COPPPAL, represented by the Latin-American elder statesmen Antonio Cafiero and Gustavo Carvajal, and African leaders want it to be a Global Anti-Poverty Fund.

Two weeks ago we sat down with officials of the Asian Development Bank in Manila to help us put together the enlarged Asian Fund with the hope that the Asian Development Bank would help mobilize larger funds once it is created and to perhaps manage it. We are perhaps some way off but we have begun the process.

I believe such a Fund to be ideal for human capital enhancement programs; ‘training-for-work’ scholarships in the new technologies; and financing micro-finance loans of say $500 to $1000 for rural entrepreneurs since the World Bank and the IMF lend only for massive projects and mainly only to governments.

The Aquino administration is investing P500 million a year in ‘work-study programs’ to strengthen Filipino workers’ skills in the fast-growing business-process-outsourcing (BPO) industry, which we expect to create 3.15 million jobs in the Philippines alone by 2016.

The reformist President Aquino — who began his six-year term in the middle of last year — is also investing sizeable chunks of public money on landmark infrastructure and anti-poverty programs. His first budget sets aside nearly P30 billion for the conditional-cash-transfers CCTs) program (invented in Mexico) to prevent children from our poorest families from dropping out of grade school.

An Anti-Poverty Fund should also help our collective effort to protect the Asian environment.

Trillions of trees vs climate change, the most effective single multi-purpose economic stimulus

We do not yet know the fullest implications of this runaway transformation of the Earth’s climate, which last week created major alarms in the American east coast and earlier In regions of the China Sea and the Pacific. But we certainly can’t wait to find out.

We need to begin applying the obvious remedies — such as large-scale tree-planting, which we approved in the ICAPP Astana Declaration two years ago.

Massive planting of trillions of trees worldwide will create tens of millions of jobs, are the best defense against tidal waves (tsunami) and carbon dioxide emissions, solve our drinking water and irrigation water requirements, fight erosion, river silting, and dangerous river floods which destroy lives, houses, farms, plantations, fisheries, and livestock.

In sum, it is perhaps the best single multi-purpose economic stimulus for our countries and our peoples because trees create jobs, produce fruits, medicines, food, vegetable oils, timber for mass housing, and profitable timber sales as in the ever-green forest industries of New Zealand, Canada, and Finland with their planned rotating harvests.

Our political parties should press our governments to appropriate funds for seedling nurseries and timber plantations and augment these with debt-for-nature swaps, where we debtors might convert portions of our external debt-payments into equity of creditors in reforestation, food production, water development and financing of the UN Millennium Development Goals (MDGs), etc.

We intend to raise this proposal at the Euro-Asia Economic Forum and the International Eco-Safety Cooperation Organization (IESCO) meetings in Xian, Shanxi, China on September 22-24.

The future of party-to-party cooperation

Let me conclude with a few observations on the future of party-to-party cooperation.

If Asia continues to grow on its trajectory of the past half-century, it could — by 2050 — account for more than half of global GDP, trade, and investment — and our people could enjoy widespread affluence.

Some three billion Asians sill mired in deprivation would become affluent by today’s standards. Asia, as a whole, would regain the leading global economic position. It held some 250 years ago — before the Industrial Revolution. And the 21st century would become the Asian Century.

This is a vision our national parties can attain for our peoples — if we at ICAPP keep the strategic balance and avoid falling into any great power’s sphere of influence;

— If we at ICAPP build up our internal strengths, preserve economic stability, and focus on long-term goals;

— and if we at ICAPP keep renewing ourselves by recruiting into our political parties potential leaders — particularly from among workers, entrepreneurs, small business people; young professionals, women, and students.

Not the US Card or the China Card

And in international relations, we at the ICAPP should never play the US Card or play the China Card. It should perhaps be part of our collective foreign policy to pin down and maximize the common grounds of cooperation between the two richest powers, the US and China; God forbid, may they never go into conflict; that would be disastrous for Asia.

The US and China both actually strengthen ASEAN and the ICAPP countries, and we in ICAPP should develop as well areas of cooperation with the European Union, the Arab world, Russia, India, China, Australia, Korea, APEC, SAARC, the Shanghai Cooperation Organization, the Gulf Cooperation Council, Africa and Latin America and extend our fullest support to the United Nations and the G-20.

Formula for the disputed Spratlys

In the China Sea and in the disputed Spratlys, we recommend that we temporarily shelve the issue of sovereignty, as Deng Hsiao Peng urged in the 1980’s, engage in multiple joint drilling for oil and gas under equitable profit-sharing, withdrawal from the armed island garrisons to achieve demilitarization, observance of UNCLOS and Open Seas, and conversion of the Zone of Conflict into a Zone of Peace, Friendship and Development.

This could be the same formula for the disputed Senkaku (Diaoyu) Straits between China and Japan and for the Paracels between China and Vietnam.

In Western Europe, after World War II, the North Sea Powers including the United Kingdom, Norway, and Germany undertook a peaceful median line partition of the North Sea. In the Norwegian oilfield of Ekofisk, the oil flows to Teesside in England and Stavanger in Norway and the gas to Bremen, Germany, the result of peaceful, friendly dialogue and practical geo-political settlement.

Indeed success will depend on our parties making continuous adjustments in strategy and in our day-to-day policies; and in our ability to respond to changing economic circumstances and to shifting comparative advantage.

Tomorrow’s Asia will have even greater need for economic cooperation, particularly among the major economies; and it is occasions like this in Nanning that build up the mutual trust on which cooperation depends.

Work of CPC and political parties

Finally, I say, we the political parties must reach out to the organizations of civil society and the forces of public opinion, to reiterate our Kuala Lumpur statement last May, for it was the myriad groups of students, academe, leftists, rightists, fundamentalists, workers, farmers, traders, and social media that brought down the governments in Tunisia, Egypt, Libya, Yemen, and have placed Syria and Bahrain under the most serious crisis.

That is why today we propose to strengthen the few global organizations that bring together political parties and the units of civil society that include eminent persons, press and social media, business leaders, students, women leaders and interfaith organizations.

ICAPP has now the mechanism for helping resolve regional disputes, with its extensive network of ruling and opposition parties throughout Asia, and influential and prominent government leaders, experienced in peacemaking and Track II diplomacy.

We must continue our work of helping the political parties achieve a government of national unity in Nepal, help initiate the party-to-party talks on Kashmir, as we congratulate the renewed dialogue between India and Pakistan governments, and the fresh peace efforts in Christian-Muslim Mindanao. ICAPP should lend its efforts to bolster the faint beginnings of dialogue with the Taliban in Afghanistan and Pakistan, and should help mobilize the political parties in the Arab world and in Israel to advance the Israeli-Palestinian peace process.

We in the ICAPP Standing Committee are privileged to express our appreciation to the Royal Government of the Kingdom of Cambodia and the new government of the Kingdom of Thailand for their adherence to the decisions only last June and July, 2011 of the World Heritage Committee and the International Court of Justice on the issue of the Temple of Preah Vihear, which earlier led to armed skirmishes and bloodshed on the Thai-Cambodian border.

We encourage both state parties to immediately accept the ASEAN military observers in the Provisional Demilitarized Zone that led to the mutual withdrawal of forces and to guarantee free access to the temple.

We the Asian political parties further extend our congratulations to the Royal Government of Cambodia under His Majesty Shihamoni Norodom, Premier Hun Sen and our Standing Committee Member Sok An for the latest achievements in the prosecution of the UN-Cambodia Tribunal of the Khmer Rouge mass genocidal killers.

As we agreed in Kuala Lumpur we have to send a team to Myanmar to invite the ruling and opposition parties into ICAPP and contribute to reconciliation and a unity government there including a role for the icon of democracy Aung-san Suu Kyi.

Historic step in UN

We have now taken a strategic step, as our Standing Committee and the Secretariat, through our permanent missions at the UN, have now filed ICAPP’s application for “Observer” status at the UN General Assembly. Let us mobilize our respective 53 country missions at the UN to support ICAPP’s historic initiative. We seek as well the endorsement of the Latin American and African missions, and those of the US and European Union, for our end goal is a global union of political parties.

We have said repeatedly that our political parties are committed against extremism, terrorism and separation and that our foremost challenges today are to win the battles against corruption, poverty and climate change. But the difficult victory on these fronts will come about and endure only when the economic and social dividends, fruits of our epic struggle, reach the people and are actually enjoyed by our people.

This must be the work of ICAPP, CPC, and the other political parties of the world.