Global engagement in a globalised world

Ladies and gentleman, at the forefront of every government's mind today is the global economic crisis. Twelve months ago, the International Monetary Fund forecast that the world economy would expand by 3.8 per cent. Earlier this month, the IMF announced that in 2009, world economic output would contract by 1.3 per cent. Much, very much has changed. This is the first time the global economy will contract since the war.

What began as a financial crisis, has become an economic crisis and then an employment crisis; in some countries becoming a social crisis and political crisis, and prospectively fuelling a new range of security crises yet to fully unfold. In Japan exports have contracted 43 per cent in just six months. In China exports have contracted 33 per cent. In South East Asia the total GDP of the ASEAN members contracted by around 13 per cent in the course of 2008. The Asian Development Bank has predicted the global recession could in 2009 lead to an additional 62 million people living in poverty in Asia.

Through the G20, the international community is rising to these challenges. Through the G20, national governments have responded with stimulus packages worth nearly 2.5 trillion US dollars to ameliorate the effects of this crisis. Over one trillion dollars of that stimulus is government measures in our own region, in addition to the total stimulus measures in the United States worth one trillion dollars in its own right.

Japan, China, and Korea have also delivered large-scale packages that help to support not only their domestic economies but, importantly, regional commerce as well. Through the G20, the world has also agreed to $1.1 trillion for the international financial institutions to guard against future financial crises, particularly in emerging markets. And through the G20, we've also agreed to act against an outbreak of protectionism, which would only harm everybody's interests.

The governments in this region and the world have responded quickly, decisively and remarkably together to confront the common economic danger. We have recognised that co-ordinated measures deliver the greatest results. In short, we have responded to the crisis with co-operation.

When the Great Depression hit in the 1930s this was not the case. Each country responded to protect its national interests to the detriment of others. The prescriptions they chose back then served nobody's interests. The Great Depression was as long and as severe as it was because the international community resorted to nationalist competition rather than international co-operation.

These were the economic consequences of the Depression. In seeking to protect itself, each country harmed itself. Furthermore, the social, political and security consequences of this outbreak of rampant economic nationalism in the 1930s was disastrous for the world at large.

 

"At its core was the notion that through co-operation, rather than conflict or competition, all members would be better off."

This time, we have, thankfully, responded differently - both at the Washington Summit in November and the London Summit in April. When the governments of the world gathered most recently in London, they crafted together a global strategy for economic recovery.

The G20 brings together the established and the emerging powers. The G20 straddles all continents and all major regions: five from Asia, five from the Americas, five from Europe and five from other regions including Africa - as well as including the most populous Muslim country, Indonesia. The G20 bridges therefore the strategic and economic weight of the present and of the future. It is small enough to have efficiency but large enough to have legitimacy. Its combined membership makes up 75 per cent of global GDP, 85 per cent of global trade and two-thirds of the world's population.

All of the largest economies in the Asia-Pacific region are represented in the G20 - and ASEAN was also present at the London meeting. What has also struck me as a participant of the London Summit about the G20 is the degree of transparency and co-operation countries have brought to the table at this time of great economic crisis. There has been a remarkable degree of collective determination to work together for the collective good.

This has been good global leadership. Leadership where the G20 through its membership reaches out to the wider international community to seek ideas to shape policy; to forge the political consensus for strong programs of action; and then to build support for outcomes once reached. Much of course remains to be done. And I look forward to the next G20 Summit in Pittsburgh in September to continue our collaborative responses to the global economic crisis.

Of course, this recent example of global economic co-operation, we have already seen at a regional level here in South East Asia - and across a much broader policy scope. Back in the 1960s, South East Asia was faced with a choice. In the midst of the Cold War, with newly independent nations finding their feet, the nations of this region were faced with a choice about their future. The choice was how to shape their region; how to look beyond their own borders and to build a region that would support their ambition to grow in peace, stability and prosperity.

The nations of South East Asia - including of course our hosts Singapore chose, actively chose co-operation. They chose to shape their common future together. They chose to form the Association of South East Asian Nations. At its core was the notion that through co-operation, rather than conflict or competition, all members, all members would be better off. Implicit in the choice made by those farsighted leaders in the 1960s is the notion of interdependence - that the future of a nation depends on the future of the nations around it; that by building communities of nations, all members of the community reap greater rewards than they could working alone.

The results of course speak for themselves. ASEAN has played an important role in building a stable strategic foundation for South East Asia, when before its creation this was far from the case. And that stability has enabled its member nations to grow from strength to strength. It has also allowed the influence of South East Asia to be felt in the region and beyond. Tonight I want to draw on the great example of ASEAN and talk about the future of our wider region in this the Asia Pacific century.

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