I shall limit my talk to Northeast and Southeast Asia, although the title says "Asian". Asia is a vast and diverse area, covering dozens of countries and a multitude of societies, different political systems and varying stages of development, stretching from the Pacific to the Middle East. Moreover, I presume "Revitalisation" refers to revitalisation of those countries in Northeast and Southeast Asia hit by the 1997 economic crisis.

With the issuance of the Joint Statement of East Asia Cooperation at the Third Informal ASEAN Summit in Manila, Philippines, on 28 November 1999, it would be appropriate to talk about the revitalisation of East Asian countries comprising of ASEAN member countries and the three dialogue partners in East Asia - namely, the People's Republic of China, Japan and the Republic of Korea.

Revitalisation of East Asian countries will involve two phases of activities. The first is to get back to where we were, economically, before July 1997. The next phase is to go beyond and surpass the pre-crisis performance.

Pre-crisis Situation

Until the outbreak of the economic crisis, it was accepted wisdom that the twenty-first century would be the Pacific Century. This prediction was based on the fact that over the last thirty years, the Asian economies bordering the Pacific have achieved the single greatest spurt of economic growth in history. Trans Pacific economic transactions are expected to tower over every other region, eclipsing the trans Atlantic transactions which have dominated most of the twentieth century. Led by Japan, the emergence of newly industrialised economies of Hong Kong, the Republic of Korea, the Republic of Singapore and Taiwan, and rapidly growing economies of the Republic of Indonesia, the Kingdom of Thailand, Malaysia and the People's Republic of China have been hailed as a miracle - the so called "Asian Miracle". In the words of Dr. Dewi Fortuna Anwar, the former advisor to ex-President Harbiebie; "It was generally agreed that the countries which during the Cold War had been regarded as dominoes have in the past three decades become economic dynamoes."

The Crisis

Starting in July 1997, Asian countries have been buffeted by serious economic difficulties. What began as a currency crisis in one Asian country not only spread in a chain reaction to most Asian countries but also deepened into a financial and thence into an economic crisis in the process.

Weaker nations, in terms of financial systems, rules and regulations, suffered more than their stronger counterparts. Countries with no or very little social safety nets suffered the brunt of the hard social impact. Where the economic and social negative impacts were strong, they even shook the roots of the political system.

People suggested that the "Asian Miracle" had been unraveled. In ASEAN, Track 2 experts began to question the relevance of ASEAN.

Lessons Learned

The crisis has certainly reflected the pervasiveness of its impact as well as the interdependence of the global economy. It was transparent that one country cannot act alone, in its response to the crisis. What was made clear was that national recovery measures cannot be instituted without appropriate regional and global policies. A number of policies are possible:

1.Acceleration of liberalisation in trade, services and investments to enhance integration;

2.Regional initiative on transparency and governance; and

3.Enhanced policy coordination, that is, macroeconomic, financial and industrial coordination.

Another lesson learned is the social aspect of economic development. Long before the 1997 crisis, sociologists have pointed out that the "Asian Miracle" created social strains; have left pockets of poverty and there was social and environmental costs of growth. We have seen that the recent economic crisis hit people at the margin the most - the poor, the aged , the women and the children.

In solving the economic development problem, due consideration must be given for the socially vulnerable segments of the population, in the light of human security. We must seek new strategies for economic development which attach importance to human security with a view to enhancing the long-term development of our region.

In a policy speech entitled, "Toward the Creation of a Bright Future for Asia", the late Prime Minister Keizo Obuchi envisioned the future as a century of peace and prosperity built on human dignity.

Recovery Measures

The recovery measures which crisis hit countries instituted differed both in nature and modality. These were changing constantly as the impact of the crisis unravels itself. The measures differed across countries because: the impact of the crisis differed in pervasiveness and severity; differences in priorities exist where there are conflicts on objectives; and there were differences in the pace of reforms.

Despite these differences, all the measures have common goals and objectives:-

1.Confidence building and micro-stabilisation measures, including those aiming to inject stability into the financial and banking system as well as the corporate sectors;

2.Macro economic stabilisation measures, which are measures taken to stabilise macro imbalances, particularly the exchange rate, balance of payments and inflation; and

3.Measures to strengthen economic fundamentals, which are structural adjustment programmes. They deal essentially with micro aspects of the economy, particularly the real, as opposed to financial sectors.

No matter what measures these countries adopted - be it IMF type stabilisation polices or be it home grown programmes - the crisis hit countries are now at varying levels of economic recovery.

As for ASEAN member countries, the economic outlook as visualised by ADB, ASEAN and IMF, GDP growth will be 2 to 3 percent in 1999, and 4 to 5 percent in the year 2000. For the People's Republic of China, Japan and the Republic of Korea the GDP growth is 6.5, 0.0 and 1.3 percent respectively.

With the consensus by the international financial institutions that these countries have surpassed the trough of the economic crisis, we may conclude that we are almost at the first phase of Asian Revitalisation. That is to say, we are almost at where we were before July 1997.

Remaining Challenges

In spite of this positive note, it would not be prudent to conclude that everything will be fine and be complacent. We need to remain vigilant as both natural and man made catastrophes can hit us unexpectedly. There are internal challenges which need to be solved with proper policies, and external ones where a concerted effort is required.

There is some macroeconomic stability but social concerns remain. Incidence of poverty increased markedly during the last two years. The Manila Social Forum, 1999 warned that the negative impact is likely to persist long after the end of the financial crisis and that the social impact has yet to completely unfold, since there is a lag effect in terms of how the economic and financial shocks filter down the social system.

There are also challenges from the economic environment. There are uncertainties in the world market, the complex mergers and restructuring of banks and multi - national corporations. Budget deficits are expected to continue, raising the issue of the sustainability of the fiscal deficits. Attaining a long term competitive edge is a major challenge, especially technological competitiveness.

Having learnt the harsh lessons from the crisis, Asian leaders recognised the interdependence among Asian countries and the need to work in unity on the necessary reforms. The Asian leaders are doing just that - unite and cooperate. The Asian traditions and values that brought forth the "Asian Miracle" are very much alive in the people. Revisiting this essence of Asia will bring forth Asian Revitalisation.

Reaching the Second Phase

To reach the second phase, that is to go beyond and surpass the pre-crisis performance, a lot more need to be done.

The name of the game for the twenty-first century is "Globalisation". According to experts and our own experience, globalisation is reordering the international system and is shaping the domestic economic, political and foreign relations of every country. The globalisation system is a dynamic on-going process: involving the integration of markets, national states and technologies. The driving idea behind globalisation is free market capitalism, its economic rules revolve around opening, deregulating and privatising your economy. The defining perspective of globalisation is integration. The defining characteristic of globalisation is speed.

How does a nation survive under such circumstances? Mr. Schumpeter opined that, "only the paranoid survive". Those who constantly looked over their shoulders to see who is creating something new that will destroy them, and then staying just one step ahead of them, will survive.

Together, the nations of Asia must stay one step ahead of others. The challenges globalisation posed are multi-faceted and complex and therefore, cannot be handled by any single state alone.

Recently, we have seen that globalisation can result in a powerful backlash and the threat is always looming. We need to embrace it in the right manner to reap economic and development benefits.

What the "right manner" is, no one can know for sure. One seeks the optimum solution through trial and error, as one has to navigate uncharted waters. One must not be afraid to adopt new ways, to accept change. But one must be ready and be quick to remedy an error. Friedman's "rule of golden straight jacket" may be a good guide.

These rhetoric are much more easier said than done. If we look at the world today, it may be classified generally into three groups. There are the developed OECD countries that are thinly populated, but with cutting edge technology. At the other end are the densely populated least developed countries with outdated technological know-how. In between are the developing countries. Some, like the People's Republic of China and the Republic of India are densely populated but have advanced, to an extent, on the technology front.

Today, more than ever before, we need to unite and cooperate. Then globalisation demand that we need to be Schumpeter's "paranoids". Do we have the capacity or the capability for that? I do not think so. There are digital divides in our region between the least developed countries like the Kingdom of Cambodia, Lao People's Democratic Republic and the Union of Myanmar, the developing countries like Malaysia, the Republic of the Philippines and the Kingdom of Thailand; and the developed countries like Japan, the Republic of Korea and the Republic of Singapore. These gaps must be bridged as our region proceeds to cope with globalisation and attain global competitiveness.

Action Plan

The least developed countries need help from both developed and developing countries in terms of software and hardware. The developing countries also need help from the developed countries. As a guide for an action plan, we have the ASEAN Vision 2020. The second vision, Partnership and Dynamic Development, underlines closer economic integration focusing on sustainable and equitable economic growth. To achieve this objective, we need to strengthen our economic cooperation and human resources development. Furthermore, ASEAN has adopted the Hanoi Plan of Action which covers several sub-topics that are the basic necessities for the long term sustainable economic growth with the late Prime Minister Obuchi's "human dignity".

ASEAN Vision 2020 and the Hanoi Plan of Action are not just for ASEAN member countries only. The Joint Statement of East Asia Cooperation adopted by the leaders of ASEAN, the People's Republic of China, Japan and the Republic of Korea covers all the topics mentioned in the Hanoi Plan of Action. I shall not dwell into the details as I presume you all are familiar with both documents.

Last month in Yangon, the ASEAN Economic Ministers met with the Trade Ministers of the People's Republic of China, Japan and the Republic of Korea, for the first time in ASEAN history. ASEAN's three dialogue partners have very helpful proposals to help us in information technology, e-commerce, promotion of small and medium enterprises, human resources development and so on.

H.E. Mr. Takashi Fukaya, the Japanese Minister of International Trade and Industry also met alone with the ASEAN Economic Ministers where we have a constructive exchange of views. The AEM-MITI Economic and Industrial Cooperation Committee has activities encompassing the acceleration of regional economic integration; trade and investment promotion; human resources development; small and medium enterprises and supporting industries' policy upgrading and economic integration of new member countries. We are very appreciative of Japan's efforts to help us integrate into the East Asia region as a first stage.

Conclusion

In conclusion, I would like to thank Mr. Takihiko Tsuruta of Nihon Keizai Shimbun Incorporated for inviting me and giving me this opportunity to share my thoughts on the future based on our common aspirations. It is my heartfelt wish that these fruitful discussions serve as a bridge towards achieving East Asia Cooperation. Let us constantly try and build a better Lexus and drive it out into the world. At the same time, let our olive tree remain firmly rooted.

Thank you very much for your kind attention.