| An Asian WTO - and the U.S. is not invited
May 6, 2006
Manmohan Singh, the Prime Minister of India and the lead speaker at the Asian Development Bank's 39th Annual Meeting, called on the participants to consider several measures that would greatly change the balance of global economic power.
- Invest less in U.S. Treasuries, and more in regional development projects - especially building infrastructure such as roads and energy generation plants,
- Negotiate a multilateral free trade agreement between China, India, Japan and the 10 members of ASEAN,
- Develop domestic markets, and rely less on the U.S. market for exports.
What it Means:
Basically, it is a call to action for Asian nations to stop loaning money to the U.S. consumer to buy their goods. India has already concluded numerous free trade agreements with Singapore, Thailand, and the South Asian Association for Regional Cooperation (SAARC), and is working on similar arrangements with ASEAN, Japan, China and Korea. China and Japan are forming trade agreements throughout the region as well. Whether a formal multilateral agreement occurs or not, these bilateral agreements ensure that the balance of global economic power is shifting towards the east.
Furthermore, the Asian Development Bank is making the kinds of loans formerly made by the IMF. The Bank has many of the same goals, such as poverty reduction, environmental protection, and safeguarding of indigenous peoples. With the future of the IMF uncertain, this is another indication of Asian economic power.
Action Steps:
Congratulate yourself if you already have Asian mutual funds in your portfolio. If you don’t, then to paraphrase Shakespeare: “Get thee to a financial planner.”
Source: Asian Development Bank 39th Annual Meeting
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