from Viet Nam News

Asian leaders say synchronisation is the key to solving global problems

Financial crises, food shortages and record oil prices were gripping the world economy and strategies to tackle them had to be synchronised, a conference on the Future of Asia was told in Tokyo yesterday.

Thailand’s Deputy Prime Minister, Suwit Khunkitti, said in his keynote speech that the problems were made worse by natural disasters that have hit the region – the Chinese earthquake that took thousands of lives and left millions of others with no food or homes, and the cyclone that devastated Myanmar.

Suwit Khunkitti, who is also Thai Minister of Industry, said all the challenges combined could lead to a world economic slowdown.

Participants agreed that food security had become a world concern in the past few months as rice prices rose 114 per cent because of falling farming production and the reduction of farm land.

Meanwhile, energy use has jumped sharply. Khunkitti warned that in Asia, it was expected to rise by about 90 per cent by 2030 and would accounts for 30 per cent of world energy consumption.

The conference was reminded that world oil prices have been rising for months. Yesterday, oil hit a new high of $135 a barrel and, according to The Guardian newspaper, analysts fear it may reach $200 a barrel in the future.

Vietnam, as the world’s major rice producer and oil importer, has experienced visible difficulties that have led to a ban on rice exports until June and sharp increases in the costs for industrial energy.

The high inflation hitting Vietnam and China created much discussion. In Vietnam, inflation in April increased 21.42 per cent year-on-year, and in China it jumped from 2 per cent to 8 per cent between January 2007 and March 2008. Professor Qiren Zhou of Beijing University said that in China, inflation was partly caused by the Chinese Yuan appreciating against the US dollar due to the subprime loan problem.

Ifzar Ali, chief economist of the Asian Development Bank (ADB), said that in this inter-dependent world, the subprime crisis had clearly had an impact on Asia. He said the problem had infected the broader financial system and that global stock markets were also hit hard.

Ali said that asset-market losses could be translated to sluggish growth in industrial countries, so the adverse effects would hit Asia through trade channels and financial markets.

The ADB’s latest figures show a dramatic decline in growth of US imports from Asian countries. Vietnam was however an exception with exports to the US jumping 31 per cent in the first quarter of this year, according to Viet Nam Textile and Apparel Association (Vitas).

Speaking at the conference, Viet Nam Minister of Industry and Trade Vu Huy Hoang was confident that Viet Nam would manage to get over the economic fluctuations by further attracting foreign direct investment, especially from leading FDI investors such as Japan.

VN, Japan to boost trade

In talks with his Japanese counterpart, Hoang expressed his hope to expand overall ties, particularly in trade.

Japan Minister of Economy, Trade and Industry Akira Amari said that Japanese companies had great interest in doing business with Vietnam, given Vietnam’s hard working, ingenious and innovative labour force.

“But in some areas, Vietnam needs to put in more effort to achieve the required high quality,” he said.

While acknowledging that Vietnam, like the rest of the world, was experiencing economic fluctuations, Hoang was positive it remained an attractive investment environment.

“Higher incomes for Vietnamese people and the emerging consumer market are new strengths that add to Vietnam’s political stability and sustainable economic growth”, he said.

Hoang added that the business environment in Vietnam was improving and that Vietnam was seeking an enhanced economic partnership with Japan, particularly in research on nuclear power for peaceful use.

Asked if Vietnam’s relationship with many partners, such as the US, Japan, and South Korea, could be sensitive to the country’s traditional ties with China, Hoang said Vietnam welcomed and appreciated both trade and assistance from different countries, no matter where the assistance came from.

Environmental issues

Today, the conference will discuss coping with environmental problems that have been identified as the root-cause of many world crises facing the world.

The session will be joined by Malaysian Prime Minister Abdullah Ahmad Badawi and environmental ministers from Indonesia, South Korea, and Japan.

Yesterday, in his address to the conference, Japan Prime Minister Yasuo Fukuda stressed that tackling climate change and protecting the environment was one of his five personal pledges towards the future of the Asia – Pacific region.

His four other commitments include support of the integration and development of ASEAN, reinforcing the Japan – US alliance and promoting Japan’s responsibilities as a peace-fostering nation.

The two-day event, convened annually since 1995, offers policy makers, businessmen and academics a chance to raise their voice on emerging issues.

Asian nations account for almost one quarter of world GDP and China and India are emerging as the world’s two largest economies, possibly overtaking the US.