East Asians Scold Europe For 'Incredible Arrogance'
International Herald Tribune
October 14, 1994
Michael Richardson 

Europe should put aside "arrogant" attitudes and fear of a competitive challenge from East Asia, the region's leaders said Thursday.

Prime Minister Mahathir bin Mohamad of Malaysia said that most of Europe still had to get rid of an attitude that "some will call incredible arrogance."

"The age of hegemony has not yet quite passed," he said. "It should die away. We should bury it."

Mr. Mahathir made his comments at a meeting of top officials and business executives from Asia and Europe. And despite some harsh rhetoric, East Asian leaders urged Europe to take advantage of the region's surging economic growth by increasing trade and investment.

While countries in the European Union have substantially increased trade with East Asia in recent years, they have lagged in investment, giving Japan and the United States a dominant position.

This worries many Asian leaders, who want to avoid becoming dependent on any major economic power or region.

Lee Kuan Yew, Singapore's senior minister, said that if Europe added its economic weight to that of Japan and the United States, East Asia would have more freedom to maneuver.

"A tripod is better than a bipod," he said. "If we have only a predominance of Americans and Japanese, there isn't the same comfort as when you have three major sources of capital, technology, expertise and markets."

Noting that the World Bank had estimated that half the growth in the global economy in the next six years would come from East Asia alone, the European Commission recently called on policy-makers and businesses in Europe to give Asia a far higher emphasis and tap its booming markets.

EU exports to Asia reached 93 billion European Currency Units ($75 billion) in 1993, from 15 billion Ecus in 1980.

But the Union's relative share of foreign direct investment in the region declined sharply in the same period, as European businesses focused first on the opportunities of an integrated market at home and then on the needs of East European countries newly liberated from Communist control.

Fidel Ramos, the president of the Philippines, said that the Europe-East Asia meeting in Singapore was taking place in an atmosphere that was "certainly more optimistic" than the two groups' inaugural gathering in Hong Kong last year.

Mr. Ramos said that there was a "vast reservoir of goodwill and even admiration" in East Asia for Europeans.

East Asians admired Europe's culture, technology, economic power and "the way you have softened individual enterprise with compassionate social values," he added.

Mr. Mahathir noted as well that East Asians still had to "fully discover Western Europe" and its economic potential.

But he said that before there could be the kind of "partnership of equals" between East Asia and Europe that the European Commission has urged, Europeans would have to accept that Asian ways of business, economics, politics and administration would not be carbon copies of those in the Union.

Reflecting resentment among many East Asian governments at previous attempts by the EU to link human rights standards to trade or aid, he said that no Asian country had demanded that European states reform themselves.

But Mr. Mahathir said he was sure that there were many Asian leaders who, in their more exuberant moments, thought they could "solve the Serbian atrocities in Bosnia, the Basque problem, the income inequalities between northern and southern Italy, the problem of homelessness in rich societies, drug addiction, classroom violence, vandalism and the ridiculous health systems" in Western Europe.

Exports from East Asia are widely blamed for displacing domestic production in the West, thus increasing domestic unemployment and contributing to economic stagnation.

Some Western politicians and media commentators have asserted that East Asian exports are competitive because they rely on labor that is exploited and underpaid and on labor practices that would not be tolerated in the West.

Mr. Lee said that in reality, exports from Asian developing countries make up less than 4 percent of total consumption of manufactured goods in developed nations.

He said it was technological change, not competition from poorer countries, that was the basic cause of unemployment in the Union and the United States.

"Because European wages and social costs are high, managements avoid hiring more workers by increasing automation, computerization and robotics," he said. "So their demand for highly educated labor is increasing, but their demand for unskilled labor is falling."

The meeting, held by the World Economic Forum, which organizes an annual gathering of international leaders in Davos, Switzerland, ends Friday.

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