China, the largest in Asia and the world's top recipient of FDI set to be net investor

Asia the world's top recipient of FDI 

KUALA LUMPUR: Amid scratchy global economic growth, Asia accounts for nearly 30% of global foreign direct investment (FDI) inflows, making it the world’s top recipient of FDI.

Generally, developing countries were attracting more FDI than developed economies, according to the United Nations Conference on Trade and Development (Unctad) World Investment Report 2014, which said total inflows to developing Asia (excluding West Asia) amounted to US$382bil last year, 4% higher than the previous year.

In the last two years, top 10 recipients of FDI flows in developing Asia were China, Hong Kong, Singapore, India, Indonesia, Thailand, Malaysia, South Korea, Vietnam and Taiwan.

China took the lead with an estimated FDI outflow of US$101bil last year, spurred by mega-deals such as the US$15bil takeover of Canadian oil and gas company Nexen by China state-owned entity CNOOC Ltd as well as the US$5bil Shuanghui-Smithfield acquisition in the food industry.

South-East Asia registered slower growth, however, with inflows to the region rising just 7% to US$125bil in 2013, compared to the rapid growth in the regional grouping – from US$47bil in 2009 to US$118bil in 2012.

The report said Singapore was the largest FDI recipient in the region, with new mega-deals driving the figure to a record high of US$64bil.

Indonesia showed stable performance, while Thailand’s inflows grew to US$13bil although many projects were shelved due to political instability.

“At today’s level of investment in SDG-related sectors in developing countries – both public and private – we still face, according to Unctad’s estimates, an average annual funding shortfall of some US$2.5 trillion over the next 15 years following the end of the Millennium Development Goals,” UNDP resident representative for Malaysia, Singapore and Brunei Michelle Gyles-McDonnough said at the launch of the report at the Malaysian Investment Develop-ment Authority headquarters.

She highlighted the important linkages between trade and investment, amplifying the need for sustainable development.

-Contributed by Cheryl Pod,The Star/Asia News Network

China's outward investment to soon exceed FDI, set to be net investor

Outward flows likely to exceed FDI in nation this year, UN report says

China's outward investment is very likely to exceed foreign direct investment inflows this year, making the country a net investor, according to officials at a United Nations body.

This "inevitable trend" will have "great significance in reshaping the economic structure and long-term development" of the world's second-largest economy, they said.

In 2013, China's foreign direct investment rose by 2.3 percent year-on-year to $123.9 billion, ranking second in the world after the United States, according to the United Nations Conference on Trade and Development's World Investment Report on Tuesday.

"China remained the recipient of the second-largest flows in the world. Meanwhile, the quality of FDI inflows improved, with more into high-end manufacturing and services with high added value," said Zhan Xiaoning, director of the Investment and Enterprise Division at UNCTAD.

"What's more, China's outward investment is more striking," Zhan said.

In 2013, investment outflows from China increased by 15 percent year-on-year to $101 billion, the third highest in the world after the United States and Japan, the report said.

As China continues to deregulate outbound investment, outflows to developed and developing countries are expected to grow further, it said.

Zhan said, "China's economic landscape, driven by exports and foreign investment in the past three decades, will change significantly. Outward investment will serve as an important driver for industrial upgrading and economic growth."

Liang Guoyong, an economic affairs officer at UNCTAD, said, "It is very hard to predict when China will become a net investor, but the trend is inevitable."

The process will accelerate along with the nation's fast economic growth, the increase in Chinese companies' competitiveness and the amount of resources and market share they gain, Liang said.

The change will lead to a more effective allocation of financial resources for the Chinese economy, as the country holds the world's largest foreign exchange reserves, Liang added.

Huo Jianguo, president of the Chinese Academy of International Trade and Economic Cooperation, a Ministry of Commerce think tank, said China's new role as a net investor will help ease trade frictions.

"The rapid increase in overseas investment by Chinese enterprises is very likely to transform the trade landscape, because profits from the overseas market will lessen the country's reliance on exports, reducing trade frictions and pressure from swelling foreign exchange reserves," Huo said.

Contributed by By Li Jiabao and Mu Chen (China Daily)

Outflows from the Association of Southeast Asian Nations (Asean) rose five percent, with Singapore leading the pack at $27 billion, more than double in 2012. The Philippines' FDI outflows last year fell to $3.6 billion from $4.2 in 2012.



However, the Philippines is nowhere in the top 10 recipients of foreign inflows in Asia amid the slowdown in FDI in Asean compared with the rapid growth in the past 3 years -- from $47 billion in 2009 to $118 billion in 2012.

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Global arms market hits post-Cold War high point

Experts say increase due to rising security risks around the world

Despite the gloomy world economy, Chinese observers have cast their sights to a prosperous global arms market, which has hit the post-Cold War peak in 2012 according to a Russian report issued earlier this month.

The seemingly abnormal situation, driven by complex factors including turmoil in the Middle East and big appetites of international arms dealers, is likely to cast shadow over the already troublesome situation in East Asia, they said.

According to the report Russia's Center for Analysis of World Arms Trade issued in early August, global military equipment exports are to hit $69.84 billion this year, the highest level since the end of the Cold War.

It is a 3.84 percent increase on the $67.26 billion in 2011, which was already nearly 20 percent higher than the $56.22 billion in 2010.

Increases in 2010 and 2011 were a result of weapon deals that had been delayed by the financial crisis that started in 2008, said the report.

Li Qinggong, deputy secretary of the China Council for National Security Policy Studies, said the recent surge is due to rising security risks around the world, especially turmoil in West Asia and North Africa, and escalating terrorism threats.

"Many countries, not only the ones in West Asia and North Africa, now feel more threatened. The traditional risks are still there, and new ones keeping emerging," Li said.

"Major weapon exporting nations are also trying to support the industry to stimulate the dim economy," he said.

Li said the trade had also benefited from countries worldwide updating their weapons.

Su Hao, an expert on political and security affairs with China Foreign Affairs University, noted escalating tensions in East Asia.

"Rising uncertainties in the region is also a contributing factor," he said.

Tensions on the rise

Tensions in the South China Sea have increased in recent months following a confrontation between China and the Philippines near China's Huangyan Island in April. The US and Japan have announced plans to help further equip the Philippine armed forces.

The Russian report said exports will hit $77.5 billion in 2015, after a slight drop in 2013 and 2014. The peak in 2015 is due to "huge contracts" signed between the United States and Saudi Arabia and other countries in the Near East, it said.

"Turmoil in the Middle East is likely to maintain and even escalate in the near future, so it is not hard to understand Saudi Arabia's need to better equip itself," Su said.

"In another view Western countries also need a strong Saudi Arabia and other regional powers to balance their traditional enemies such as Iran."

According to the report, Russia is the world's second-largest weapon supplier in 2012, with an export volume of $13.29 billion - 19 percent of the world market.

Russia had a good sales result, although it lost markets in Iran and Libya due to arms sanctions on the two nations and partly lost the Syrian market. It has also been crowded out of the market in Saudi Arabia by the US. 

The Russian report showed France ranked third, with $5.61 billion in exports, a figure expected to rise to $19 billion by 2015.

France is followed by Germany, which has $4.57 billion in exports, the United Kingdom with $3.24 billion and Iran with $2.8 billion. Italy, China, Spain and Sweden rank successively after Iran.

Hu Siyuan, an expert with PLA Defense University, said China's weapon exports are second-class compared with the world's leading exporters, "especially in the fields of material and sensing technique".

Li Qinggong said China sells combat fighters to Pakistan and training jets to other countries.

Japan relaxed its self-imposed decades-old ban on military equipment exports in December 2011, and the Philippines became its first consumer.

Japan is not a big player in the world arms market, but it is now trying to have a finger in the pie to help boost the domestic economy, Li said.

"But Japan may not manage to achieve that goal, as Washington will not allow it to sell weapons based on technology mainly learned from the US," he added.

US leads market

The US leads the global arms market, with its export volume hitting $25.52 billion, or 36.53 percent of the global figure. Its status will further be consolidated in 2013, accounting for 40 percent of the world share.

Chen Fei, a scholar majoring in international issues at Zhongnan University of Economics and Law based in Central China's Hubei province, said on a TV program on Sunday the Obama administration's fanning of tensions in East Asia is partially driven by US arms dealers.

"Congressmen, political figures and arms dealers in the country have formed a close mutual interest community," he said.

Neither presidential candidate has talked about domestic gun control this year, as it has been deemed a "politically toxic" topic.

Chen said that under such a political environment, the Obama administration has to create a more favorable outside environment for arms dealers through moves including its high-profile strategic pivot to East Asia.

In late July, on the last day of a UN conference involving the 193 member nations aimed at forging a world regulation on weapon deals, Washington blocked efforts by insisting that all member nations should have veto rights on the document.

By Li Xiaokun, Zhou Wa  (China Daily)  

Dawn of a new superpower

When the world continues to discuss China’s impact even when there are other issues to consider, China has clearly ‘arrived’.

CHINA’S unrelenting growth is continuing to fuel speculation about the implications of its spectacular rise for the rest of the world.

Its irrepressive re-emergence as a major world power shapes and colours private discourses, academic analyses and bilateral and multilateral discussions, whether or not intended originally to discuss China.

It permeates strategic discourses behind closed doors, casual coffeeshop talk and everything in between. The recent Germany-Malaysia Security Forum in Kuala Lumpur, sponsored by Konrad Adenaur Stiftung (KAS) and organised by ISIS Malaysia, was an example.

Germany’s political foundations like the KAS are affiliated with their respective political parties, and with the KAS it is with Chancellor Angela Merkel’s rightwing Christian Democratic Union (CDU).

It is significant that even with a conservative CDU government, Germany has no qualms about the rise of China. German delegates instead looked constructively ahead to an even more prosperous China with which to work, above and beyond any ideological differences.

A Malaysian delegate privately remarked that Germans had been trading successfully with China for centuries. China had been a major world power then and, after a period of isolation and internal upheaval, it is becoming a major world power again.

Countries East and West that have had similarly positive experiences with China feel the same. Those that might have upset China through war, invasion, occupation or squabbling over tiny islets might feel differently, but exactly how an unprovoked China would perceive them today is another matter.

A larger conference in Berlin some years ago attended by delegates from various countries, and sponsored by Germany’s Defence Ministry, was similarly positive about China. At that time, Merkel’s government comprised her CDU, the equally rightwing Christian Social Union (of Bavaria) and the left-of-centre Social Democratic Party (SPD) of her immediate predecessor, Gerhard Schröder.

Since then, Merkel’s CDU-led coalition had substituted the SPD with the Free Democratic Party (FDP), a centrist party that became another right-of-centre party. That Germany’s formal posture towards a rising China has not changed indicates that its positive outlook on China is deep-seated and enduring, unaffected by political ideologies in Germany or China.

Nonetheless, some classic questions about a rising China and its impact on Asia and the world linger. These tend to refer to developments such as the increasing defence expenditure of countries in East Asia.

Other slick assumptions are that Asean countries are “hedging” against China, and the world has moved from the Westphalian concept of national sovereignty to that of “responsibility to protect”. The former is untested and the latter is still disturbing.

It is easy to make a superficial connection between these issues and a rising China, and then to conclude that there is an arms race in the region, and the arms race must therefore have resulted from a region alarmed by China’s rise.

These points had been raised erroneously 20 years ago, and they will still be raised 20 or more years from now. The problem with these simple-minded assumptions is that they neglect both the key details and the big picture.

All countries spend continually on defence, routinely preparing for contingencies from any quarter and not just to arm against any particular threat. This happens everywhere all the time, regardless of the prevailing strategic situation in a country or region.

A Malaysian delegate explained that it was part of the normal course of running defence establishments, when countries need to renew their ageing arsenals or when they become more developed and can afford to spend more. It might be added that defence procurement is the most lucrative industry in the world, so it easily acquires a logic and a momentum of its own.

However, at a time when Philippine and Chinese officials have had uncomfortable brushes with each other over the disputed Scarborough shoal in the South China Sea, blips in national defence budgets may appear suggestive.

But alarmist presumptions about regional threats and the need to “arm” against them can easily acquire a logic and a momentum of their own as well, however unjustified. At the same time, some parties may be hoping to see conflict in the region to profit from it through the arms trade, strategic leverage or recruitment of allies.

Such a prospect militates against this region’s collective interests and several of its abiding realities.

First, the political stability and economic prosperity of countries in East Asia depend on the stability and propensity for growth in the region as a whole. Injury to the region’s prospects also hurts individual national prospects.

Second, the countries in East Asia, particularly those of Asean, are clearly dwarfed by China. No amount of individual “arming” can address the gulf in national defence capacities between them and China.

Third, Asean countries are still unable to act as one militarily even if by doing so their collective clout can achieve some “balance” with a hulking China. Age-old border issues, disputed maritime territory and other niggling bilateral concerns have prevented any sense of an Asean security entity from developing until now and for the foreseeable future.

Fourth, the immature presumption that smaller countries in East Asia can always bank on the US for protection is both mistaken and dangerous, because that notion becomes very destabilising whenever it is proven untrue.

The notion of a US acting as a countervailing force against China derives only from those instances when US and indigenous concerns coincide in ways that are dissimilar to China’s. When US and East Asian interests diverge, as they will at certain points, the regional strategic picture will change.

US-China joint interests have grown tremen­dously and will continue to grow. They may already have surpassed the shared interests between the US and East Asia minus China.

The US itself is the sole superpower with an agenda and priorities of its own. Beyond a limited convergence of interests with other countries, it will not deign to act as a servant or bodyguard of smaller nations.

China remains inundated with domestic problems of its own. These span pressing social, administrative and environmental concerns as well as restive provinces and an economy running out of steam.

Meanwhile, it has witnessed the collapse of the Soviet Union that had suffered excessive arms expenditures, and a troubled US economy weighed down by overspending on foreign wars. Pragmatic Chinese leaders today would know better than to repeat those mistakes.

Modern China’s success also depends considerably on a peaceful East Asia that has enabled it to boost its exports worldwide. And since the regional peace has also been maintained by a US military presence in the Asia-Pacific, China as its greatest economic beneficiary might perhaps be asked to help pay for that presence.

When I mentioned that to Martin Jacques, the British academic and author of When China Rules The World, he chuckled. But that is a modern-day reality that a country like Germany may be able to understand.

Clearly, not all Western views of a rising China are created equal. The differences between the German and US views are interesting, and they become more telling when Germany is a leading country and the strongest economy in Europe.

Perhaps that has something to do with Germany not having to “guard” its status as the sole superpower in the world.

Behind The Headlines By Bunn Nagara

Assets grow fast and furious!

East Asia’s wealth continues to spurt, with the hope that it will not also sputter.

BEHIND the faceless economic data of countries and regions is the wealth of individual people. But how does this relate to global conditions, and vice-versa?

One answer comes by way of the High Net Worth Individual (HNWI), as defined jointly by the French consulting firm Capgemini and the Royal Bank of Canada (RBC).

Where net worth is generally taken as total assets minus total debts, the HNWI as conceived by Capgemini, RBC and Merrill Lynch is a person with at least US$1mil (RM3.2mil) in disposable funds to invest.

In their calculation, growth of East Asia’s personal wealth last year bypassed North America’s for the first time. In their latest World Wealth Report 2011 released just four days ago, the number of HNWIs in the “Asia-Pacific” region grew 1.6% to 3.37 million.

Widening gap: China continues to develop rapidly, chalking up multiple achievements such as lifting nearly a billion people out of poverty within one generation. Yet some 100 million people in China still live in poverty. — EPA

However, the Asia-Pacific mega-region often presents a problem of definition, and does so clearly in this case. Australia is included but not New Zealand, nor is any country in North America which also lies in the “Pacific” portion of the Asia-Pacific.

India is also included even when it is not a Pacific nation, but not any other South Asian country which is similarly located and equally (in)eligible. The Philippines is also excluded along with five of the smallest or newest Asean countries.

Such concepts and their comparisons, particularly when defined by specific corporate interests, tend to be notional at best. Nonetheless, one trend is clear: individual and thus regional wealth in East Asia is growing faster than in North America.

But much of this new wealth also has shallower roots. East Asian economies are seeing fast gainers and almost as rapid losers among HNWIs.

Hong Kong and Singapore respectively lost 17.4% and 7.8% in HNWIs. The volatility is typical of rapidly growing regions: easier come, easier go.

Overall, East Asian wealth accumulation for investment is still behind North America’s – US$10.7tril (RM34tril) to US$11.4tril (RM36.4tril). The gap remains, but it is just as obvious that it is narrowing.

Without East Asian volatility, the gap would be narrower still. And if the number of HNWIs were considered on per capita terms, East Asian development would seem even more impressive.

That leaves a large question mark over China, with the world’s largest population at more than 1.3 billion. It has already produced the fastest and most sustained growth anywhere on the planet, with the prospect of much more to come.

China continues to develop rapidly, chalking up multiple achievements such as lifting nearly a billion people out of poverty within one generation. Yet some 100 million people in China still live in poverty, as Prime Minister Wen Jiabao conceded during the week.

In essence, much of China’s economic growth has yet to come. How far it still has to go may be taken as a measure of how much further it can still go.

Owing to its sheer size and the scale on which it operates, China’s progress will determine the fate of both greater China (the mainland, plus Hong Kong, Macao and Taiwan) and much of the world.

That was the broad consensus reached during the week at both the Rio+20 summit in Brazil attended by Wen, and the G20 summit in Mexico attended by President Hu Jintao.

And that is where the sums and the conclusions, whether tentative or premature, become mired in obscurities. But if it is any consolation, the obscurities are also the realities.

When comparisons are made between (East) Asian and North American growth, investment or expenditure, the comparisons are essentially between China and the US.

And in economic growth in particular, much of China’s data is derived from trade with and investment from the US. The most important bilateral relationship in the Asia-Pacific, if not also in the world, is also growing steadily on multiple fronts: economic, but also diplomatic and strategic.

How the world’s two largest economies get along has always been important for the world. That becomes much more so when it encompasses other spheres of their relationship as well.

In Hu’s address in Los Cabos on Tuesday to an audience that included his US counterpart Barack Obama, he developed a model of bilateral relations he introduced at a China-US Strategic and Economic Dialogue last month in Beijing. This consisted largely of two prongs, each with three main points.

The three key principles are for both countries to maintain strategic communication between them at the highest levels, to manage any differences between them without letting anything get out of control, and to keep any prospective interference from any quarter boxed up.

The three broad areas of interest outlined by Hu in his “hopes” are that the US will act positively in opting for a pragmatic rather than an ideological approach to relations, respect China’s legitimate sovereign interests, and stop the narrower concerns of domestic politics from upsetting ties.

These points may be taken to mean China’s preference for a full, direct relationship that avoids hiccups from occasional sentiments in the US over China’s internal political affairs, currency valuation or a lingering US tendency to protectionism.

There were at least three points of immediate agreement at Los Cabos: that both countries should develop the next phase of their relationship meaningfully, that relations were so far going well, and that more should be done to build mutual trust.

This G20 summit is seen as the second meeting between Hu and Obama this year, and the 12th in three years. It is also timed just right for Hu in reminding Obama that bilateral relations should not be subordinated to domestic pressures in a US election year, as Obama begins his campaign for re-election.

These personal exchanges are crucial, despite the passing nature of the presidencies. Hu is due to be succeeded next year, and even if Obama is re-elected, he has only another four years in office.

But formal relations between major powers are made of more durable stuff. There is scant difference between the Democratic and Republican parties on ties with China, and Beijing itself is known for worldviews that endure.

Beyond these, the summits in both Los Cabos and Rio de Janeiro took due notice of the gravity of the eurozone debt crisis.

The eurozone is after all an important leg of the world economic tripod, and its economic prospects are bound to be of concern to other regions.

At both summits, China and the US tried to shore up global confidence in the eurozone by helping to talk up prospects of recovery, or at least avoided consideration of worst-case scenarios.

The next EU summit in the following days should do more to spell out specific measures that member countries can take to that end.

Europe has the greatest responsibility in putting its collective house in order. North American and East Asian economic entities can do no more than assist in the hard decisions that Europeans have to take themselves.

For East Asia and North America at least, how well China and the US work together will determine prospects for all players in both regions. For East Asia in particular, HNWIs and standards of living generally are determined by the peace and prosperity that only close ties between major powers can offer.

Behind The Headlines
By Bunn Nagara

Related articles

• Asia’s millionaires outnumber America’s (edition.cnn.com)
• World Wealth Report 2012: Asians Top List Of Millionaires (ibtimes.com)
• Asia-Pacific home to highest number of millionaires (panarmenian.net)

By their dialogues we shall know them

Political conferences all have their own character, which also determines their actual value.

ONLY a quarter of a century ago, Malaysia launched the first premier annual conference for the most dynamic part of the world.

Thus was ISIS’ Asia-Pacific Roundtable (APR), organised by the Institute of Strategic and International Studies in Kuala Lumpur. It soon became an institution and a pilgrimage for strategic thinkers, policymakers and analysts with a focus on security in East Asia and the Americas, with Russia, Australasia and the Pacific somewhere in between.

As a non-governmental forum, the APR became the top “Track Two” dialogue for the Asia-Pacific mega-region’s movers and shakers. Because Track One (governmental) forums were official, delegates there would be inhibited and dialogues overburdened with protocol.

Track Two dialogues, however, were non-official and included governmental officials alongside academics and others. With everyone speaking in a private capacity, exchanges tended to be more open and candid.

      Track One: Malaysia’s Defence Minister Datuk Seri Dr Ahmad Zahid Hamidi speaking on the final day of the Institute for Strategic Studies summit in Singapore on June 3. — EPA

This allowed officials the time and space to speak their mind, while giving non-officials an opportunity to “listen in” and address officials directly. The APR series would go on to inspire copies, or at least near-copies.

In 2002, Singapore began its own annual conference series in the Shangri-la Dialogue (SD). This would be a Track One exercise managed by Britain’s Institute of International and Strategic Studies (IISS).

Through the years other Asean countries also established their own national think- tanks, with one from each country forming part of the Asean-ISIS network. The APR then became their joint project, while still being organised by ISIS Malaysia in Kuala Lumpur.

After the SD, the Swiss-based World Economic Forum (WEF) also turned its gaze eastwards. Apart from the WEF’s annual meetings in Davos, it also began to hold several conferences a year elsewhere, including the annual WEF on East Asia.

The APR is held in late May or early June each year. For both the SD and the WEF on East Asia to be held back-to-back with the 2012 APR testifies to the APR as a form of mainstay. Organisers tend to hold broadly similar forums in a region around the same time to economise on travel expenses for international participants. That the other international conferences adjusted their schedules to suit Asean-ISIS’s timing is a measure of how Asean and its institutions can implicitly drive international events involving major world powers.

While the SD focuses on politics and provides a political platform for delegates, the WEF on East Asia (like other WEF forums) emphasises corporate activity and provides a business platform for delegates. Their similarities and differences with each other and with the APR became obvious this year.

The APR’s agenda this time ranged from regional security with the rise of China and India, to US strategic interests, sub-regional perspectives, governance issues and Myanmar’s future.

There was, as usual, a fair assortment of delegates from various countries around the Asia-Pacific. Someone remarked on how much of the discussion was taken up on China and the implications of its continued rise, but at least the conference could not be accused of skirting the reality outside.

This concerns the key question of how much of the region’s realities are actually reflected in conference discussions. What is their street credibility like?

The SD tended, perhaps typically, to be dominated by Western voices. Much of the time it was US officials in particular talking to their Asian counterparts over everyone else.

US-China military relations or rather the lack of them this time became almost the dominant theme. Attracting most interest was the US view of China’s rise, in particular with the attendance of US Defence Secretary and former CIA director Leon Panetta.

The SD’s strategic focus on China came at a time when Vietnam and the Philippines were experiencing renewed problems with China’s rival claims to South China Sea territory. Perhaps for this reason, several Chinese would-be delegates apparently gave this year’s SD a miss.

This showed that Chinese delegates had yet to prepare themselves sufficiently for vigorous public debates. That would require, for example, adequate mastery of the main language of discourse, English, to engage with others convincingly and persuasively.

With the “China component” virtually absent, there was a complaint that the Shangri-la Dialogue proved to be not much of a dialogue. And since friendly relations across the seas this time were somewhat strained, it wasn’t much of a Shangri-la situation either.

Further north in Bangkok, several important social issues were aired along with the platforms for businesses.

There were the obligatory discussions on China-US or US-China relations, of course. Who could seriously omit such a pivotal issue in the region?

But China was discussed in a variety of ways beyond the flat topic of a military enigma. There was, for example, consideration of how the worsening European debt crisis could hit China and then impact on the rest of the region in myriad ways.

There were also important exchanges on the reform process in Myanmar. However, these were somewhat dwarfed by the presence of Aung San Suu Kyi, on the podium addressing everyone directly in her first trip outside her country in 24 years.

For the first time, delegates could speak with her and relate to the needs of Myanmar and its people. Such was the impact created that the WEF on East Asia decided to hold next year’s conference in Myanmar.

The discussion on how banks must also serve the poor had a showing by the Boston Consulting Group. However, talk of how providing banking access to some 20% of the world’s population still without access could re-energise growth did not arouse much debate on how this might require a whole reconceptualisation of banking priorities.

Discussion on the need for mobile healthcare, particularly for rural areas, saw representations by the Telenor Group and Boston Consulting. While this would clearly maximise the capacity of healthcare professionals, it would also involve a serious re-assessment of private and public sector roles in healthcare funding.

Food security was a main item on the agenda, with the observation that despite increases in food production in the past half century, a billion people are still starving. But again, there was not much debate on how the question is not the amount of food produced but its distribution, as determined by global markets and prices.

As a conference in the heart of the Asean region, surrounded by Asean realities, the WEF could not miss the quickening pace of Asean economic integration and the creation of a common market by 2015. There was no doubt that Asean integration would proceed full-speed in all its intended spheres. In attempting to learn from the EU experience, however, Asean needed to adapt from European successes while avoiding the failures.

Over at the SD in Singapore, the question of how the US could grapple with a looming Chinese presence in the region led to consideration of the US navy’s new intended toy, the super-high-tech destroyer DDG-1000.

At US$3bil (RM9.56bil) each, this would push the navy into the space age and the Defence Department into near-insolvency. Perhaps not surprisingly, there was also little debate on how the greatest threats confronting the US are not other countries but non-state actors like terrorist groups and various militant organisations.

Perhaps some help could come by way of more Track Two dialogues.

Behind The Headlines By Bunn Nagara