‘The real challenge is how Asia can shape the world’, The Daily Star, June 16, 2012
Former State Secretary and Ambassador, Ministry of Foreign Affairs, Denmark, and currently Visiting Senior Research fellow of the
Institute of Southeast Asian Studies, Singapore, Joergen Oerstroem Moeller talks to A.B.M. Shamsud Doza and Shayera Moula of The Daily Star regarding Asia’s supreme role in shaping world economy and Bangladesh’s much needed policies to remain strong within Asian economic integrations. He is also the author of “How Asia Can Shape the World: From the Era of Plenty to the Era of Scarcities.” He analyses future roles for Asian countries, where an era of resource shortages needs to be challenged and Western-based policies modified or replaced.
The Daily Star: Having celebrated 40 years of independence of Denmark’s diplomatic relations with Bangladesh, how do you look at the partnership between the two countries?
J.O. Moeller: It’s very good. You can say we like each other and there’s a lot of common ground and even though Bangladesh is situated in Asia and Denmark in Europe, we take a common outlook on many things and both participate in the global competition. We are in sense smaller countries, even if Bangladesh is larger than Denmark, we need to participate in the economic globalisation to make sure that there is a good living standard so from the Danish point of view, and my impression is that the same is for Bangladesh, the bilateral relation is excellent.
Denmark and Bangladesh relations are mainly centred on trade and development as well as Denmark’s heavy involvement in strategies against climate change, partnering with the Bangladesh Government, what other areas can we work jointly in?
Well I think an idea would be to have more cooperation in higher education. I have visited two universities during my stay here and I am impressed by their outlook and their efforts to globalise themselves. It’s the same case for Danish universities so may be we could build up a deeper cooperation between the universities in the two nations.
Another area to explore is the area of economic integration. Denmark is a member of EU, and Bangladesh a member of Saarc, and I see that there is a very strong drive in Asia for economic integration where you can explore it at your advantage and division of labour. If you look at the performance of Bangladesh over the last 5-15 years, your export growth has been very impressive where Bangladesh has secured its place as an exporter of many goods. If that continues, and that is of course necessary if you want to have a high growth rate, you must make sure that the markets stay open — one of the ways to do that is economic integration. You could look at some of the experiences of the European integration or drive to integration so that you can export your products.
TDS: You mentioned in various articles how Singapore branded itself as a trade hub, Vietnam as an exporter of sea food and Thailand for its agriculture, how do you see or hope Bangladesh brands itself in the global economy?
JOM: Looking at it from the outside, Bangladesh is known for its manufacturing — apparel, textile, clothing etc, and experience indicates that this is good platform for economic development. If you look at Singapore, they started 40 years ago also by exporting textiles — Hong Kong and Taiwan did the same. So Bangladesh could try to brand itself through following the footsteps of these various successful countries stating that we start by manufacturing textiles but would want to broaden that platform — that we want to start making products with higher value added, more quality and with more designs.
This, of course, needs time but Bangladesh should be prepared to wait for that while in the meantime build up the education system. They should provide the people with more skills so as to be more advanced for higher value added goods/ products. So brand yourself as a country that is coming upstream in the supply chain.
TDS: Could you tell us a few words about the launching of your book How Asia can shape the world: From the era of plenty to the era of scarcity?
JOM: Well like many others, I think the future belongs to Asia. But it is also clear that Asia has its share of problems so the real challenge is how Asia can shape the world not how Asia will shape it.
It depends very much upon the decisions of the policy-makers and the change in Asia’s population. The way I see it, the world is dominated by mass communication instead of mass consumption and we will also have to face a growing scarcity of resources, commodities, borders, energy, which means we will have to change the production, function and the way we consume everything so that there is more output from one unit of input. That should highly interest Bangladesh — to actually save resources produced — and the reason I think a new economic model will come out of Asia is because these problems, although global, will be felt first and strongest in Asia due to the big population growth. With the economy growing, it’s likely they will response to the challenge which will hopefully be built upon by traditional Asian methods and philosophies.
TDS: Bangladesh, despite its growth, faces challenges such as corruption, higher inequality rates, poverty, political turmoil, etc. Denmark, on the other hand, had a holistic growth. How did they address all the matters at the same time?
JOM: The bad message is that it takes time. The good message is that it is possible and it can be done. But the way to do it is to build a stronger trust in the population inside the nation where you can enter the economic transactions without the fear of losing.
You expect other people to share their knowledge only because you are ready to share yours. You expect other people to be ready to enter into the burden sharing of distribution of benefits because you are ready to do the same. So the key to a well-run and well-functioning smooth society is actually a high degree of trust among people in the community.
Without the trust, transaction costs increase as the need for a big compass on legal system arises to cope with the problems. You need rules and regulations telling people what to do but with trust there is a shared common value, people by instinct react in the same way meaning fewer problems and the economic transaction costs decrease.
TDS: Both Bangladesh and Denmark are small nations. What are the implications of being a small country in pursuing foreign policy issues? Denmark has transformed from a traditional adaptive diplomacy to an active diplomacy, how can Bangladesh transform itself as a small nation?
JOM: The key we found was multinational diplomacy, primarily by way of economic integration into the EU which means when you deal with your neighbour you do it in a broader context.
The EU now has 27 member states soon to be 28 and formerly Denmark dealt bilaterally with Germany — a very big country — with difficulty due to size. But now all our relations with Germany take place inside the EU, meaning that to deal with it in a rule-based organisation everybody has to act under a common law, making it much easier for smaller nations to deal with larger ones.
That is why I say that the key to prosperity and peace in Asia in the future is economic integration. You do not need to make a replica of the EU but you need to do something of the sort — an economic-integration, rule-based — where everybody is equal to the law.
If you take a look at the Counsellor of Ministers of EU, all the decisions are taken by voting and Denmark shares votes comparatively high to its population. So through this system we have more influence in the development of Europe.
TDS: US has recently had a new strategic shift to Asia Pacific. How does Denmark, as a member of EU, now look as Asia as a whole?
JOM: We see the future growth taking place in Asia also admit that we are far away. Denmark’s influence in Asia-Pacific is small and that is why economic integration again comes into the picture. Because our relations with Asia, Asia Pacific and US takes place within EU’s framework we have a much stronger influence and say looking at Asia as an area where we need to build stronger ties, relations and future corporations. EU has made a large number of agreements with Asian countries and some of them are termed under EU as strategic-partners.
TDS: Denmark is highly influential in UN Peacekeeping and Bangladesh is at number one spot in its contribution there. How can the two countries work together for a better peace-building mission as the world remains at constant conflict with each other?
JOM: I think our peace keeping efforts speak for themselves, showing that we are ready to assume the responsibility of a peaceful development around without shying away from putting our own soldiers and people at risk. We have sent a powerful message that it’s primarily about peace and we are ready to make an effort, even if it costs lives of our own people, having actually no stake at the conflicts themselves. We should proceed further and commit ourselves in the peace-keeping process as we are doing within the framework of UN.
TDS: Coming back to Bangladesh, what are its potentials and challenges according to you?
JOM: Bangladesh is geographically situated in an advantaged location close to the rising two powerhouses — china and India. You have also already established yourself as a strong competitor in the global economy.
Rising oil prices mean that global transport costs are going up and the implication of that is the supply chain would be more compact. So where big purchasing powers will eventually be in china and India, it’s a big asset for Bangladesh to be so close to these two markets.
In spite that, you need to make a few efforts: Firstly you need to focus on the education system making sure that the labour force has the necessary proficiency preparing them towards a higher degree of skills.
Secondly, you need to make logistic-based efforts of transportations and infrastructure. Investors will certainly come to Bangladesh but only if the infrastructure is good — which will require a lot of money.
The other factor would be taking a lead in an active Asian integration so that the markets continue to grow. If you make efforts in these areas, Bangladesh will face a promising future.
I took interest in Bangladesh as I noticed the growth rate improving year after year. I realised that this was because Bangladesh was taking over a lot of the manufacturing over other countries. So that means that Bangladesh itself had discovered the first step on the road towards development, but you should not stop there and should continue to move on
TDS: Unlike most European nations who are heterogeneous in nature, Asia and Asia Pacific are more diverse in culture, values and believes. Do you think these variations of ideas and history would hinder regional integration? Secondly, if economic prosperity takes place, can we work on these differences?
JOM: First of all, you should not limit your horizon to south Asia alone, you should think of Asia as a whole. If you see what has happened in Asia over the last 6-12 months, you can see that Korea, China and Japan have got together and about two months ago agreed on free trade in north Eastern Asia. China and Japan have 7-10 days ago agreed to exchange their currencies without using dollar as an in between currency and we also have various other examples of currency cooperation.
If you observe, East Asia is already moving ahead in integration and Bangladesh’s future, I believe, is not inside south Asia, it’s primarily inside Asia. So don’t limit your horizon. Even if we recognise South Asia as an important region, Asia as a whole is just as valuable.