Thank you, Co-Chairmen,
Ladies and Gentlemen,
It is my greatest honour to make a keynote address of the Sixth Japan-Singapore Symposium. Since I have been not just a regular participant, but also is one of the founding members of this meeting, it gives me a distinctive pleasure to join the discussion of this year when our two countries celebrate the 40th anniversary of our strong ties.
On this special occasion, I would like to appreciate the leadership role the Singapore people in both public and private sectors have played towards regional cooperation and economic integration in Asia. It was indeed in March 1998 after the Asian currency crisis, when I first visited Prime Minister Goh Chok Tong at the Istana as the Japanese Vice-Minister for Finance, he proposed to me on a private basis an original concept of Japan-Singapore Economic Partnership Agreement (JSEPA). Then, in December 1999, Prime Minister Goh Chok Tong officially proposed the negotiations for it in Japan. Without his vision and leadership, today's strong movements of regional cooperation in Asia could never have materialized.
It seems to me that global market explosion after the end of the Cold War has been assumed to be one of the driving factors for the expanding regional cooperation, as there has emerged a growing need for countries in a region to help each other to settle problems among themselves. In Asia, after the currency crisis in 1997, leaders came to re-evaluate the real meaning of a phrase, "Asia is one," and started to work together for it with seriousness. In Japan, it was not until 1997 that the most Japanese people fully recognized Japan as an integral part of Asia, while Japan had always wished to establish a sound relationship with Asian countries. The currency crisis made us look at whole regional interests, not just each country's differnt interests which eventually had led the regional economies to fall into risks of escalated double mismatched financing before 1997.
It has not been an easy way, though, in the past seven years, to come down the road of launching regional cooperation in Asia. Washington consensus has not been so successful in restoring confidence in the regional economy, although it might be better than muddling through, as I once paradoxically recommended the Japanese government to follow an advice of the IMF on the major bank failure resolution in the middle of the Tokyo financial crisis in 1998. Alternatively, some ambitious proposals, just like an idea of establishing an institution of the AMF in parallel with the IMF, had to fail without political supports in both international and domestic scene. Furthermore, an idea of regional currency units might go too far even today without any prerequisites on both economic homogeneity and political will in the region.
Thus, it was the best direction for Asia to drive towards economic integration on a basis of stable regional security. In this sense, only viable way forward for Asian countries was to strengthen the regional cooperation by the hands of both private and public sectors, step by step, I say step by step, in such forms as private investments, Chiang Mai Initiatives, and Asian Bond Market Initiatives. In early 1998, against the backdrop of the slow-moving multilateral WTO process, Prime Minister Goh Chok Tong proposed a development of multi-layered bilateral Free Trade Agreements as an alternative approach towards sustainable growth of the regional economy and trade. Japan also came to recognize that, without sustainable growth in the region, no prosperity would be achieved in Japan, being itself a part of Asia.
Singapore indeed opened the door for EPA movements in Japan. Mexico and Malaysia followed Singapore. Such agreements with Thailand and the Philippines are almost finished. India and Australia will soon set the table. Although some bureaucratic reservations do exist with regard to negotiations with Australia and New Zealand due to voices from our agricultural sector, the upshot is that the regional cooperation in the form of EPA would work as a catalyst for domestic reform in Japan.
When I tried to helm full rudder towards the EPA with Singapore six years ago, several agro-lobbyists in the National Diet, just like Darth Vader on the movie, Star Wars, opposed me so furiously. However, after six years passed, surprisingly enough, they are now preaching Japanese farmers, "FTA should give us great opportunities to sell Japan's high quality agricultural products to the world market." What a change! But let me remind you, that I suspect they are still Darth Vader.
The regional integration should not be a self-centred and exclusive process. Any regional co-operation could provide favourable impacts upon the rest of the world, offering them spill-over benefits. Economic partnerships in our region would, for instance, push up its total income, which could then enlarge its imports from the rest of the world, creating favourable circumstances for countries and peoples outside our region, too. Nor has the integration been intended to seek settlement of problems solely in the region by its members for the purpose of avoiding external interventions in matters inside the region. Rather, it would be geared not to bother other parts of the world or international institutions for solving problems which our region could and should settle by its members with their own wisdom and efforts. This would serve to alleviate burdens of solving problems which the world would need to bear.
Recent figure shows an increase in intra-Asian trade outperformed that of world trade by a wide margin, which indicates our economic integration has been reinforced these days. It seems to me that the regional relationship in Asia has become sophisticated, just like "from dating to wedding." In my experience of marriage, I know how difficult and sensitive to cooperate with your partner.
Winston Churchill once expressed his faith after World War II in a pugnacious tone in his speech on "the United Europe" that the Continent of Europe is really only the peninsula of Asiatic land mass, and the real demarcation between Europe and Asia is no chain of mountains, no natural frontier, but a system of beliefs and ideas which Europeans call Western Civilisation. While the Europeans have their own civilisation, do we, East Asians, not have any such civilisation? Could the European achievement not be adaptable to East Asians? What are our visions and objectives for the regional integration?
It is often pointed out that Asia is a region of diversity with various ethnic, cultural, religious backgrounds, and most importantly, different developmental stages of the countries in the region. It is different from Europe, which has made significant progress in integration in social and economic terms. This has positive as well as negative implications. But based on the economic theory, diversity in Asia generates net benefits each other with regional cooperation focusing on goods and services. Also liberalization of the move of human capital especially in a large economy, such as Japan, will play a key role in the progress of domestic reform.
Thus, regional commitments directly generate domestic reform. Therefore, in the process of advancing regional commitments, a leadership is always indispensable. There may be some domestic groups that would stick to the status quo. Also, there may be some historical or geopolitical confrontations in the region, where national leaders without any doubt have a key role in stabilizing it.
But no leaders in Asia even wish to halt the continuing economic success. So I believe leaders should inherit this wisdom, so that regional relationship will continue to roll a plus-sum game. In Japan too, after the Prime Minister Koizumi, the next administration must recognize it, as well as hold strong commitment towards Asian regional community building. We will have a long way to go in this sense, however, since Cold War-type tensions still remain in the region.
Nobel Peace prize winner and economist, Norman Angel, argued in 1913 in his best-selling book, "The Great Illusion", that economic interdependence would render war unjustifiable. But unfortunately, how interdependent the European countries might have been on the eve of the World War I, the war still did occur, and so did the World War II. We must work tirelessly on confidence building amongst each other through not only bilateral basis but also trilateral, six party, multilateral, and multi-layered basis, for the purpose of building regional stability and integration.
In designing these sorts of multi-layered fora with a view to strengthening community building in the Asian region, Singapore and Japan have key roles in common in advancing regional efforts.
First, both Singapore and Japan are experienced market economy with technology and infrastructure. Trade represents only one facet of the FTA universe. Economic integration have come to be more encompassing, with their coverage broadening to include requirements for institutional legal reforms in such areas as public procurement transparency, intellectual property rights protection, competition policy harmonisation. Also, financial experts have identified a number of important roles in such schemes to create linkages in foreign exchange, bonds, equities, and banking markets. Experts in information technology, education, science and technology development, have also emphasised a variety of meanings of creating bilateral and regional legal co-operative frameworks from their respective interests and viewpoints. Singapore and Japan have been playing the leading role in these areas, by expanding the JSEPA to this region as a model for the East Asian economic partnerships.
Second, Singapore and Japan share common values of democracy for a long time. Democracy must be felt, understood, accepted and performed by the people themselves, since it is crucial to the individual rights. Singapore and Japan can spread our experiences, successes and failures alike, as a good lesson to our Asian neighbours so that the fruit of democracy can be shared by all in the Asian region, even Myanmar for one example.
Third, both Singapore and Japan share strong partnership or alliance with the U.S. With that background, the strong security cooperation with the U.S. ensures us to serve as catalyst for supporting peace and stability in Asia.
These three common features of Singapore and Japan, experienced market economy, shared democratic values, and the special ties with the U.S. have crucial implications with a background of emerging China and India in both regional and global scene.
India and China take position on the needs of multi-polar world with the background of their growing economic power. Therefore, they must observe fundamental values of democracy, human rights, freedom of speech, the rule of law, and fair distribution of wealth, so that peacefully rising China and India will be able to become a reasonable, responsible, and reliable partner both in the regional and global community.
In 2003, the leaders of Japan and ASEAN countries shared a goal of regional co-operation in their agreed document, so-called the Tokyo Declaration, to "forge common visions and principles, including respect for the rule of law and justice, pursuit of openness, promotion and protection of human rights and fundamental freedoms of all peoples". Singapore and Japan should serve as joint regional leaders to respect the common visions and principles.
Singapore and Japan could also show a model as experienced market economy. For example, in the case of Chinese currency regime, which may affect the global imbalance of capital flow, more transparent system can be learned from our experiences.
In his speech made in Singapore in 2002, Prime Minister Koizumi proposed wider community building through economic partnerships, which eventually led to a creation of the East Asian Summit. The EAS is an only regional forum that includes not only Singapore, Japan, Australia, and New Zealand, the established democracies that constitute the Asian side of APEC, but also India, which is another democracy in the greater Asian region, as it demonstrates strong ties of democracy and market economy, in which Singapore and Japan could constitute key responsibility.
Before ending my remarks, I would touch upon Japan's renewed role in both global and regional context. Quickly responding to the recent North Korean missile launches, the U.N. Security Council successfully adopted a resolution unanimously based on the original proposal by Japan, which carried a strong message from the international community to the DPRK. Japan must continue to commit itself to play an enhanced role in keeping regional safety and stability for the purpose of maintaining prosperity in Asia, while North Korean issue will continue to be a source of grave concern. Divergences, difficulties and even disputes still persist in Northeast Asia, inside Southeast Asia, and between countries in Northeast and Southeast Asia, just to name a few. Pessimism might occur in the minds of the Asians who often refer to several critical differences and confrontations, and question how Asia could construct regional political cooperation.
Indeed, regional integration in Asia is still an embryo, far behind from the European community building. I perceive that it is not for us at this stage to attempt to define or prescribe the whole structure of East Asian constitutions. We ourselves should be content, at this stage, to present the idea of an East Asian community, in which both Japan and Singapore will play a decisive part, as a moral, cultural and spiritual conception to which all can rally without being disturbed by divergences about structure. We do not of course pretend that a community building provides the final and complete solution to all the problems of this region. Nonetheless, it is for us to create the atmosphere and give the driving impulsion.
I look forward to a lively debates and fruitful conclusion of this symposium.
Thank you very much.