Tomorrow's Leaders Engaging with Asia

Speech by the Australian Deputy Prime Minister and Minister for Trade, The Hon Tim Fischer to the Dunlop Asia Leadership Program, Canberra, 9 February 1998.


Introduction

Many Asian economies have been in crisis over the last six months but does that mean that Australia's long-standing engagement with the region is also in crisis? Some commentators would have you think so.

Mr Tony Milner, ANU's Dean of Asian Studies, Mr Carillo Gantner, Chairman, the Asialink Centre, participants in the Dunlop Asia Leadership Program, I am pleased to address this select group - brought together by Asialink - which knows that our commitment to Asia is not that of a fair-weather friend. We are in Asia to stay.

I therefore applaud Asialink for its valuable work in promoting understanding in Australia of the countries and peoples of the Asia Pacific region and particularly for encouraging the leaders of tomorrow to immerse themselves in matters Asian.

I know that this week you are looking in particular at areas of cultural difference between Australia and the region, drawing on the excellent work which came out of the Academy of the Social Sciences in Australia's "Australian-Asian Perceptions Project", which Professor Milner has been closely associated with. My Department is pleased to have been able to assist in funding this project.

You are all to be congratulated for tackling the challenging task of comparative cultural analysis. And I note on your program that you will be personally coming to grips with one aspect of regional culture by performing tai chi each morning this week!
But I will return to cultural questions shortly. I would like first to address more fully the issue which has dominated press headlines for months.

The Regional Outlook

As I have indicated, the Asian financial and economic crisis has not diminished the importance of the region for Australia. The magnitude of recent events is significant, but they need to be kept in perspective.

Clearly, major economic adjustments will continue over the short to medium term but the overall prognosis for the region is for a slowdown in growth over the next 2-3 years with sustained growth resuming thereafter.

While forecasts of specific growth rates at this stage can only be speculative what is clear is that the outlook for a return to robust growth in particular countries depends on the speed with which governments implement economic reform and liberalisation.

For policy reforms and deregulation leading to freer and more open markets will provide the impetus for strong and sustainable growth.

It was therefore an important step in the right direction when APEC leaders in Vancouver agreed in November last year to accelerate trade liberalisation in a number of key sectors. Also, regional economies did not flinch from further freeing up their financial sectors in major World Trade Organisation negotiations the following month.

Indonesia, Korea and Thailand are also taking important steps in the context of their discussions with the IMF. And Australia's more than $A4 billion contribution to the IMF support packages underlines both our commitment to assisting the region and our confidence in its underlying strengths.

We will continue to lend a helping hand to Indonesia and our other friends in the region over the long-haul. My colleague Mr Downer visited Jakarta last month. There he extended personally the Government's support for Indonesia as it implements the measures in the IMF package announced on 15 January.

Mr Downer also announced in Jakarta a new package of Australian assistance to help Indonesia address the impact of the financial crisis, particularly its serious impact on the country's poor.

Australia's Economy in Good Shape

Australia is able to offer assistance to its neighbours because we are better placed than others to weather regional financial instability. The Government has ensured that the economic fundamentals are in place for sustained, low inflation, job-creating growth.

We are fostering a domestic environment where trade can flourish, and which will encourage investment - both for firms already in Australia and for those that have yet to sample Australia's advantages.

And we are improving the competitiveness of the Australian economy through reforms to our financial sector, industrial relations, business regulation, telecommunications, and the transport and energy sectors.

The outlook for economic growth in Australia in 1997-98 remains at 3.75 per cent as forecast in the 97-98 budget and the revised forecast for 1998-99 is 3.25 percent.

The reduction in the 98-99 forecast is due largely to the Asian slowdown, as we can expect some adverse impact on Australian exports due to slower growth in the region, but our own economy is growing strongly.

Indeed, we are already seeing some softening of export demand in sectors such as construction, tourism, education, live animals and horticulture. And several Australian companies are feeling the effects of cancelled or deferred business deals in South East Asia.

But the full impact on Australian exports is not expected until the latter half of 1998 due to the nature of trade and financial contracts, and as stocks are allowed to run down.

The Government therefore faces a challenging year in continuing to encourage growth in Australia's exports.

Last month, we announced significant support for exporters facing possible defaults by Korean business partners and last week the Prime Minister announced further support for those trading with Indonesia.

Next month I will release to Parliament the annual Trade Outcomes and Objectives Statement (TOOS) for 1998, highlighting priorities across a number of markets. The TOOS reaffirms our renewed emphasis on bilateral market access in addition to ongoing efforts in regional and multilateral forums.

The Importance of Cultural Awareness

Appreciating cultural differences between Australia and each of our trading partners is an important consideration in successful trading with our regional neighbours. So I am glad you are considering these issues this week.

I am only too keenly aware of the importance of this issue because when I meet with South-East Asian Ministers I am at a serious handicap - and I mean that quite literally.

While there are many cultural influences in various parts of Asia, one of the most important sessions in any meeting in Asia - whether business or government - is, of course, that which takes place on the golf course. Now Australians in general are no strangers to the golf course but I would have to say that Asian Ministers have become dedicated near-professionals.

And the same can be said of the performance of Asian delegations in that most important of regional meetings the ASEAN Post-Ministerial Conference, when ASEAN Ministers and all their dialogue partners assemble to vie for supremacy in the traditional closing sing-along.

The US has certainly realised the importance of cultural acclimatisation as Madeleine Albright last year ended a long run of Asian dominance with her show-stealing rendition of "Don't cry for me ASEAN".

On a more serious note I wish you well in your deliberations about the different perspectives Australia and countries in the region bring to key concepts such as democracy, human rights and business ethics.

It is open to debate whether in a globalised trading environment the way in which business is conducted is culturally conditioned. In the context of the recent financial crisis, the phenomenon of companies highly-gearing themselves in a boom is certainly not confined to Asia. The international market place has progressively imposed tougher standards of disclosure and transparency around the world. It happened elsewhere in the 1980s and earlier this decade and it's happening now in Asia.

The international market place equally requires Australian business executives to be sensitive to cultural considerations if they are to seize opportunities not only in Asia but around the globe. Executives in Asia have had to learn a lot about the way in which we do business and we are obliged - if we want to succeed - to return the compliment.

And I know that those in this room are eager to do so.

Conclusion

Let me close by saying that Australia's commitment to the region is an unshakeable one.

We believe firmly the region will emerge from the current crisis before too long with renewed vigour. Asian economies are already taking the crucial liberalising steps to bring investment flows back to the region.

Australia will continue to do what it can to help. We are committed to working with our regional neighbours in the bad times as well as the good.

I therefore encourage you all, as tomorrow's leaders, to sustain the commitment to Asia which you are demonstrating here this week.

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