Dáil Éireann - Volume 490 - 23 April, 1998

Asia-Europe Summit: Statements.

[12] The Taoiseach: I attended the second Asia Europe summit which took place in London from 2 — 4 April and was accompanied by the Minister of State at the Department of Enterprise, Trade and Employment, Deputy Kitt, who has responsibility for international trade. The summit came at a significant time for Asia and Asian-European relations. While it was a planned part of the ASEM process begun in Bangkok in 1996, its occurrence at this time when many of the Asian participant countries are in deep financial and economic crisis, served to heighten its importance and focus its deliberations. Of course, it also took place at a significant time for Anglo-lrish relations and provided opportunities to progress some of the outstanding issues which led to the final Agreement with regard to Northern Ireland. The financial crisis in south east Asia, its impact on the economies of the region and on the global economy and prospects for growth, dominated the discussions of the Heads of State and Government. This was true of the formal closed sessions, bilateral meetings and informal discussions which took place.

However, it was not just economics that leaders focused on, but the impact on people. Issues, such as employment and migrant workers and access to education and health care were also considered. The chairman sought to ensure the three pillars of the ASEM process, economic, political and other areas, were each dealt with appropriately. I have been seriously concerned at the effects of the financial crisis in Asia, especially on those who are poor, and we are determined to assist in so far as we can to help restore economic stability throughout the region.

One of the three plenary sessions was devoted to discussion of regional political issues: two Asian, the Korean peninsula and Cambodia, and two European, Bosnia/Kosovo and EU enlargement. Over dinner the Foreign Ministers discussed Cambodia, European security architecture, EU-ASEAN relations and Burma — Myanmar. I welcome the notable progress which has been made in the two years since the Bangkok summit in discussions on regional and international political and security issues of common concern.

The political dialogue is guided by principles included in paragraphs 5, 6 and 7 of the Bangkok chairman's statement. These include the promotion of human rights and commitment to the Universal Declaration on Human Rights, the fiftieth anniversary of which we celebrate this year. In the drafting of the chairman's statement for this meeting, Ireland insisted on maintaining the reference to these paragraphs. Overall, the ASEM discussions are well reflected in each of the statements, the statement on the financial and economic situation in Asia and the chairman's statement, which were agreed by the leaders. Both documents have been placed in the Oireachtas Library.

[13] Perhaps one of the most important facts about the recovery measures put in place to assist Asian countries is that 29 per cent of the overall funding for such measures is provided by the European Commission and its member states. This very significant practical assistance needs to be highlighted for two reasons. First, to make it clear that the EU is concerned at the impact of the crisis at both a regional and global level, and that Europe is responding generously. The decision to issue a stand alone financial statement, distinct from the chairman's statement, rightly signals the seriousness with which the Asian crisis is viewed by European leaders. Second, the statement reinforces the role of the IMF at the centre of the global response to the crisis. The EU is confident that recovery can be achieved in the short to medium term, in many circumstances. It is critical that the resources made available to the worst affected countries are used to support appropriate economic restructuring.

Already a number of the Asian countries have adopted measures which have restored some level of confidence in their economies. In contrast, those countries who have delayed taking corrective action have failed to halt the downwards spiral of their economies. It was essential that ASEM leaders and, in particular, the European members, were seen to be fully supportive of the restructuring programmes advocated by the IMF, the World Bank and the Asian Development Bank.

At a practical level, the ASEM leaders welcomed the creation of the ASEM Trust Fund, at the World Bank, and the Financial Crisis Expertise Network — both of these initiatives will enable the provision of economic and financial advisers and experts to the relevant Asian Governments. Such practical assistance, combined with a positive approach by international banks in the restructuring of the debt and the provision of trade credit, will help restore the conditions necessary for resumed and accelerated economic growth. Only an integrated package of national action, intergovernmental assistance and private sector co-operation will be effective in stabilising and restoring the damaged economies.

Early recovery is possible given the sound fundamentals of many of the economies concerned. While confident of recovery, EU leaders do not seek to minimise the hard domestic choices which Asian governments will face. Strong government leadership in the adoption of reform measures, with international assistance, will help to restore the essential climate of investor confidence. Clearly, ensuring accountability and transparency in financial markets represents a difficult but vital condition of recovery and investor confidence. There was a frank recognition, both among the individual leaders to whom I spoke and in the context of the formal closed sessions, of the poor regulatory systems, bad investment analysis and, in some instances, corruption, which had contributed to the crisis. Equally, there was much resentment at the role played by international currency [14] traders and speculators and a call, especially from some of the Asian leaders, for improved regulation of such activity. From an Irish standpoint, I was pleased that the need to resist protectionist measures was recognised and that a positive attitude was adopted towards future WTO negotiations.

The adoption by ASEM leaders of action plans on trade facilitation and on investment promotion served to underline the ongoing commitment of ASEM participant countries to further open up trading and investment opportunities. The Business Forum which took place in tandem with the Summit provided a useful impetus to the development of inter-regional trade. There was agreement between the leaders that high-level business missions would examine opportunities in Asian economies for European investment.

I welcome the forward looking approach of the chairman's statement. It confirms that the next meeting will take place in Seoul, in the Republic of Korea, in the year 2000 and records the mechanisms put in place by the leaders in preparation for same and for the development and deepening of Asia-Europe relations in the interim.

I have already mentioned the ASEM Trust Fund, the Expertise Network and the trade and investment action plans, but a much wider range of issues was examined by the leaders. Many of these topics are of interest to Ireland and have been raised with me by Deputies. These include international arms control, disarmament and nonproliferation of weapons of mass destruction. The important issues of child welfare and the fight against the commercial and sexual exploitation of children were raised, together with the combating of international crime in areas such as drug trafficking and money laundering. All these are areas where international co-operation can have a significant beneficial impact.

The wide area of social and cultural co-operation discussed by leaders included also the promotion of co-operation on information and communications technology. This is of particular interest to Ireland and to myself, given my responsibility for the Information Society Commission. I believe there are many areas of opportunity for co-operative and complementary relations to develop between Irish and Asian companies, exploiting differing time zones, skills and market expertise — and this was a theme of many of the discussions which I had with individual Asian leaders.

The diverse range of financial, economic, political, technological, social, educational and cultural relationships which link Europe and Asia in the ASEM process will be progressed in the context of the Asia-Europe Co-operation Framework which the leaders endorsed. The framework which sets out agreed short-term priorities will allow for the development of the initiatives I have outlined and others mentioned in the chairman's statement. As for the longer term, the vision group which was formally launched by the leaders will chart the future development of the ASEM [15] process itself. There are so many areas of potential mutual benefit that it is necessary for a structured approach to be adopted to the development of the process. Deputy Albert Reynolds represents Ireland on the vision group and I am confident that the group will develop the requisite strategic plan to guide ASEM in the early years of the new millennium.

In the context of longer-term consideration and in the context of discussions on political dialogue generally, it is worth noting that the EU enlargement process which is now firmly under way was of particular interest to Asian leaders. Clearly, the issue of ASEM membership arises on both the European and Asian sides, because, as both EU and ASEAN membership grows over the coming years, there are obvious implications for ASEM. Asian concerns over membership reflected deeper concerns that EU enlargement, completion of the Single Market and the introduction of the Euro would promote a more introverted European Union. With my European counterparts, I indicated clearly my belief that the reverse would be the case. A strong and stable Union with a stable currency would be seeking to open further Asia-Europe opportunities for trade and investment.

While I believe there will be little progress on the ASEM enlargement issue in advance of the Seoul Summit in the year 2000, a generally balanced and inclusive approach should be adopted. There was little discussion at the meeting which decided that consideration should continue on the timing and modality of membership.

I had discussions with all the Asian leaders at ASEM. I also had a number of very worthwhile formal bilateral meetings in London, in addition to those with Prime Minister Blair which related to Northern Ireland. The Minister of State, Deputy Kitt, deputising for Minister Andrews, also met the Thai and Indonesian Foreign Ministers. Details of these meetings will be addressed by the Minister for Foreign Affairs in his statement.

I took the opportunity to seek the support of individual ASEM leaders for Ireland's candidature for one of the non-permanent seats on the UN Security Council in the elections in the year 2000. I also raised this issue with each of the leaders with whom I had formal bilateral meetings.

I had bilateral meetings with the Chinese, Malaysian and Singaporean leaders. I thanked Premier Zhu Ronji of China for the early opportunity to meet him so soon after his recent appointment. I indicated my appreciation of the major economic and social reform programme which he has set out. Premier Zhu expressed his satisfaction with improving Sino-lrish relations and noted the recent successful visits by Foreign Minister Andrews and Minister of State, Deputy Fahey, to China. I accepted Premier Zhu's invitation to visit China and invited him to visit Ireland.

[16] I indicated Ireland's desire to improve trade relations and suggested there was substantial experience of industry restructuring to be found among major Irish companies, especially in the agri-food sector and, given the restructuring and privatisation of State companies planned in China, that Irish public and private sector companies might have a useful contribution to make.

I noted the planned visit by UN High Commissioner for Human Rights, Mary Robinson, former President of Ireland, to China in September and the improving openness in China in this regard. Deputies will wish to know that the first EU-China Summit took place in London immediately prior to ASEM. It included substantial discussions on human rights.

Discussions with Prime Minister Mahathir of Malaysia centred on the financial crisis in Asia and the impact on Malaysia and neighbouring states, especially Indonesia. I indicated support for the financial statement agreed by ASEM leaders and the specific measures it contained to assist the worst affected countries.

Prime Minister Mahathir outlined the difficulties which devaluation of the currency had produced in terms of Malaysia's ability to import or secure credit. The cumulative effect of these problems would slow recovery and the rate at which Malaysia would approach Western standards of living.

Prime Minister Mahathir raised the issue of speculators and the need to regulate their activities, especially to protect developing economies. The Prime Minister also highlighted the issue of Indonesian refugees and the problems they presented for Malaysia.

Another specific problem which Prime Minister Mahathir raised was that of overseas students and in this regard he thanked me for the efforts of the Irish universities who were seeking to alleviate the problems for the 700 approximately, mostly medical, students, from Malaysia who are studying in Ireland.

In addition to the financial crisis, I discussed with Prime Minister Goh of Singapore the future of ASEM and the question of enlargement to include both European and Asian members.

I also raised the issue of bilateral trade relations and suggested information and communications technology and financial services as areas where time zone differences could allow for investment, joint venture and other co-operative activities.

Singapore has a large volume of overseas investment and I highlighted Ireland's excellent reputation as an investment location, especially, regarding software and total US investment into Europe.

In my meeting with Prime Minister Dehaene of Belgium and Prime Minister Guterres of Portugal, I raised the general issue of Agenda 2000 and the recent, 18 March, proposals published by the Commission. I indicated the need for appropriate transitional arrangements for Ireland in relation to Structural Funds, the importance of continuing [17] eligibility for Ireland for Cohesion Funds and the particularly unacceptable nature of the Commission's proposals for CAP reform. I stressed that any changes must not impact disproportionately on any member states, and that was the case with the draft agriculture regulations of 18 March.

We noted that negotiations on the next round would be likely to continue for a year at least before any deal would emerge. Both leaders accepted the case for a “soft landing” for Ireland and other regions set to lose Objective I status and noted that Ireland had made good use of EU funding.

I also briefed both Prime Ministers on the Northern Ireland peace process indicating the substantial progress that was being made by both Governments at that time. In relation to East Timor, I raised with Prime Minister Guterres Ireland's concerns and indicated that these had been conveyed directly to the Indonesian Foreign Minister Alatas by the Minister of State, Deputy Kitt.

I thanked Prime Minister Blair for his skilful chairmanship of a successful summit in tandem with intensive negotiations on Northern Ireland. Overwhelming goodwill was conveyed to me by all the ASEM leaders in relation to the Northern Ireland peace process. I am confident that the good trade and cultural relations with Asian countries which Ireland enjoys can be further improved on foot of the useful meetings and contacts I had in London. Ireland will play its part in developing the many initiatives adopted in London and in this way and through participation in the vision group, assist in the preparation for the Seoul summit in 2000.

Mr. J. Bruton: I had the privilege of attending the first ASEM summit in Bangkok. I imagine the atmosphere at the summit attended by the Taoiseach was very different. At the time I attended the summit in Bangkok, there was a sense of economic invincibility in East Asia. Everything seemed to be going very well and the participants were talking about major infrastructural projects — an information superhighway in Malaysia and Singapore and a rail and transport network in that area. The European participants in the talks were vying to get the contracts.

I have no doubt the atmosphere at the London summit was very different because things have changed in East Asia. It is worth reflecting on why this happened and whether there are any lessons which Ireland can learn from the truly disastrous situation which is now unfolding in East Asia. I use the words “truly disastrous” in a serious way and in real terms because we are talking about human tragedy. Virtually every business in Indonesia is technically, though not legally, bankrupt. There is no legal system of bankruptcy in these countries so there is no way of handling it.

This bankruptcy has enormous human consequences. The problem involves the private, not [18] sovereign, debt of individual companies who borrowed large amounts of foreign currency which has now increased hugely in value in comparison to their own currencies which have fallen through the floor. The entire business infrastructure of some of these countries is bankrupt.

This happened because they pegged their currencies to the dollar. For purely domestic reasons, the US federal reserve kept the dollar interest rate low. A huge amount of money was sloshing around in the dollar financial system which was pressed into the hands of foolish South East Asian investors who could see no risk involved because their currency was pegged to the dollar.

Unfortunately, when there was an initial loss of confidence, the truth underlying the situation was exposed. The stocks and properties in most of these South East Asian economies were grossly overvalued relative to their earning capacity. The price-earnings ratios on the Japanese and other East Asian stockmarkets were completely wrong and had been for years. The price-earnings ratios were driven further out of line with reality by the freely available dollars which were pushed into their hands to put up prices even further. When things first went wrong in Thailand, there was a loss of confidence in other countries and people started examining the unsustainable price-earnings ratios. The result was collapse and disaster, which could have serious political consequences for peace in East Asia.

What are the lessons for Ireland in this? The lesson is that if a country pegs it economy to a currency, it must also peg its economic and social policy to that of the people managing the currency. The Asian countries pegged their economic and social policy and currency to the US. However, the US had different needs and was at a different stage of development from the Asian countries. The US is a mature economy, they were emerging economies. The financial policy of the federal reserve was inappropriate to the needs of developing countries.

Mr. Quinn: The US is also a regulated economy.

Mr. J. Bruton: That is true. It does not have a legal infrastructure to underpin it. Banks, as they always do, continued lending money and took no responsibility for whether the loans were sustainable in real terms. As long as they appeared to be sustainable in currency terms, banks continued lending money. The bank that did not lend it was criticised by its shareholders because it was not performing well in comparison with others. We must be sure that the currency policy pursued in EMU suits Ireland. At least we will have a say through the European system of central banks. The Asians had no say in the policy of the federal reserve.

One cannot escape from the reality of price-earnings ratios. One cannot go on investing because property values are going up and one assumes they will always go up. Therefore, if one [19] buys now, no matter how unreal the purchase is in terms of what one can earn in income, one buys it on the basis that in six months' time it can be sold for a higher price. That is a madness which, to their cost, infatuated most of the business people in East Asia.

This has serious consequences for peace because of its effect in Indonesia, which has a huge Chinese minority. Whenever things go badly, the Chinese are killed because they are rich and the scapegoats. There is a worry that there will be anti-Chinese feeling in South East Asia and that the Chinese diaspora there will become scapegoats for the frustrations felt by others. China is a big power and will not allow that to happen.

I note the ASEM did not discuss the big arms race in East Asia. An enormous amount of money is spent on arms and I would have thought that any realistic discussion at ASEM would have encompassed the arms race. Why are they buying these arms? There must be a sense of insecurity.

Mr. Quinn: They are selling them.

Mr. J. Bruton: One can be both a seller and a purchaser. Both were present at this summit and the matter was not discussed. East Asia is a potential powder keg, for economic reasons, because of the tensions vis-a -vis the Chinese diaspora but also because there is a huge amount of unresolved territorial issues in East Asia, particularly affecting the continental shelf between Vietnam and China, and Indonesia and Malaysia. Those issues were not discussed because it would not be polite. Politeness is given a high value in East Asia. However, politeness can also have a price.

It seems United Nations reform was not discussed at the ASEM Summit. I regret this. The Taoiseach pressed Ireland's case for a place on the Security Council. With all due respect to everybody, that is not the main issue. Whether we have a place on the Security Council is a minor issue. The big problem is that Japan and Germany do not have a place on the Security Council. This means the Security Council is not realistic. The idea that France would have a place and not Germany is nonsense. The idea that China would have a place and not Japan is nonsense. Unless there is a realistic distribution of power in the Security Council, we will not have an effective United Nations. That issue has been dodged.

There is another problem. America is not paying its dues to the United Nations. Neither is Russia but it cannot afford to. America can but it is not paying up. Every time we flatter American statesmen around the world — they are susceptible to flattery — and fail to mention that the United States is not paying its debts to the United Nations we are being a tiny bit hypocritical. It is a disgrace that the United States Congress will not pay its debts to the United Nations. If people [20] did not pay their debts to US businesses, we would hear all about it. If people abused American copyright and intellectual property rights, we would hear all about it through the World Trade Organisation and the Americans would demand enforcement mechanisms. In this instance, the American Government is not paying its debts to the United Nations. Great peacemakers who make foreign policy in the United States Congress have insisted but the US Congress will not allow the US Administration pay its debts. President Clinton and his Secretary of State Mrs. Albright want to pay America's debts. The ASEM Summit was the ideal place to bring that up because virtually all the great powers who pay their debts to the United Nations were present. The European and Asian countries are up to date. This was the ideal place to discuss United Nations reform but it was not discussed. That is regrettable. To a degree at least, the main issues were dodged.

The Taoiseach raised human rights issues but this time Europe is not raising the issue of human rights in China at the human rights meeting in Geneva. It was raised previously. I know from my meeting with Premier Zhu's predecessor, Li Peng, that he was very upset when Europe raised the issue of human rights in China. We need to be realistic. Is there progression in the direction of better human rights in China? There probably is and we should allow it to continue without too much finger-wagging. China is almost another world. I am not sure however that the human rights records in some of the other countries represented at the ASEM Summit are brilliant.

I am worried about the consistent approach of China to the isolation of Taiwan. This matter was not raised by the Taoiseach. We talk about self-determination in this part of the world. It could be said that the people of Taiwan have rights to some form of self-determination. I am not sure this has been conceded by China.

Another issue brought up at our meeting in Bangkok — it seems it was not raised in London — was third level education co-operation between Asia and Europe. There is a large number of Asian students attending universities in Europe, there are virtually no European students attending universities in East Asia. The result is that they know all about us but we know little or nothing about them. If we want to do business with East Asia, we need people who understand East Asia. Probably the best way to understand East Asia is to live there for a while, particularly when one is a student. There were suggestions by a number of people in East Asia that they would welcome Europeans attending their universities. It seems this matter was not raised at the meeting the Taoiseach attended in London. I wonder why. It was a lost opportunity. It should be addressed. I hope Ireland will pioneer some form of co-operation with East Asian universities with a view to greater co-operation in both directions.

Deputy Albert Reynolds now represents Ireland on the Vision Group which deals with [21] East Asian affairs. This is a good thing. Before the election, the Taoiseach was going to send Deputy Reynolds north but he has sent him east instead. It was a mistake. Deputy Reynolds was told before the election that he would go north, but the Taoiseach meant to say he would go east.

Mr. Quinn: From Boyle to Bangkok.

Mr. J. Bruton: I know he will do a good job because he knows quite a bit about the east.

Mr. Quinn: The globalisation of the world's economy will probably accelerate over the next ten to 15 years. The consequence is that no corner of the world can isolate itself from events elsewhere. The fear and trepidation that affected the financial markets in Europe and North America following the collapse of some of the Asian economies as a result of the Asian financial crisis is an indication of this. Fortunately so far, the fears expressed at the time have not manifested themselves in a worldwide financial recession which would, in turn, lead to an economic recession. We do not yet know if the restructuring of the various Asian economies will work. This is a theme we cannot ignore because it appears they have been stabilised for the time being.

There is a wider and deeper issue from our point of view. The European Union is the world's largest consumer market. The deepening of the European Union over the next five to ten years, through enlargement and the introduction of the euro and its emergence as an international reserve currency, will make it a very important place and the European currency a very important currency for the rest of the world. We are committed to globalisation and open competition on a global scale but I doubt whether this is a two way commitment in other parts of the world. These are issues which need to be raised at various international fora, of which ASEM is clearly the most important.

Following the collapse of command economies and the disappearance of the Berlin Wall the final inevitable truth emerged — one cannot run a market economy without a free society. This was not confined to dictatorships on the left; the dictatorships in Argentina, Franco's Spain and Salazar's Portugal as well as the colonels in Greece all fell for precisely the same reason, that one cannot run a complex, modern market society without total freedom. The command economy in the Soviet empire lasted longer because of its geopolitical history rather than the internal contradiction of trying to run a sophisticated economy without liberalisation. If there was a party which came to that realisation it was the Hungarian Socialist Workers' Party during the Kádár years when they had a liberal economy in relative terms but could not function without going the whole way.

There are different kinds of global market economies. There is the social market model in Europe and the well regulated model in North [22] America to which no one would assign the adjective “social”. You have what the Economist magazine would describe as robber capitalism in the former Soviet Union, now known as Russia and the CIS or Commonwealth of Independent States. You have what the magazine has uniquely and minutely described as crony capitalism in south east Asia.

While I accept the observations made by Deputy Bruton, it is essential to realise there will not be a full recovery in those economies unless there is a consolidation of what might be described as civic society and the introduction of full freedoms and proper regulation.

It is in Europe's interest to articulate the case that one cannot have a properly functioning world market economy unless the laws of contract can be enforced and people can trade freely, in market terms, within the economy. In that context, the right to form trade unions and to bargain as trade unionists, must be seen as an economic right and not as a human right. If Europe does not make that point to all countries that continue to deny workers the right to get the best price for their labour, then one will not have a truly functioning market economy.

There needs to be a legal infrastructure of enforcement and regulation through a courts system that is independent of the executive and a written constitution to underpin all that. The mistake that many people have made in Europe and elsewhere is to equate the right to trade union organisation as a human right when, logically, it is a market right and must be seen in the context of market reform.

If all those countries are moving towards market economies it will be necessary to have the components that underpin such economies. These include legal regulation of the market, the right to enforce such regulation independently of the executive, and the right of participants in that market to bid for and obtain the best price for whatever commodity they are selling.

So far, too many people have tiptoed around the issue of trade union rights as being human rights. The Indonesians and others have rightly told us that we should not try to impose high, expensive and perhaps unproductive standards from mature economies like North America and Europe into Indonesia and other south east Asian countries.

Coming from that point of view, with trade union rights and organisations being represented as human rights, they can argue their case with some degree of conviction. It is not for us to decide what the rate of pay should be in any part of the suburbs of Jakarta or Bangkok. It is the right of workers in those areas, however, to be able to organise themselves to get the best possible price. We have the common sense of trade union organisations, whether in North America, China, Japan or elsewhere, who will trade off the benefits of maintaining employment or increasing wages to a point where job losses might occur.

I suggest to the Taoiseach that in the follow up [23] meetings that take place, we should try to obtain a common European position on this matter. Otherwise, we will see a continuous exodus from continental Europe of employment and jobs which will transfer to other parts of the world because we are uncompetitive, largely because labour costs are artificially depressed in those parts of the world. They are being protected on the basis that this is not an exportation of European human rights, this is part of the Asian culture which says “Leave us alone, we have to find our own way into the next millennium”.

They cannot, however, cherrypick market economies. They cannot have the kind of crony capitalism version or the Korean directed one, which was a version of what the Indonesians or the Chinese are doing. If we want to have a truly global market economy then the underpinning components of that — regulation and the right to organise trade unions — must be seen as part and parcel of the integral components of a market economy.

I want to follow up Deputy Bruton's point on the exchange of understanding and education. I welcome the fact that we have 700 Malaysian students here, most of whom are studying medicine. I understand they have experienced considerable economic difficulties because of the dramatic drop in the value of their domestic currency vis-a -vis the cost of working here. This country should enter into medium term arrangements with Malaysia to consolidate and develop some system that will underpin the transitional difficulties they will undoubtedly experience for some years, to maintain the line of communication between ourselves and Malaysia for a variety of self-interested reasons.

The Malaysians need to have access to medical assistance and education here and we need to develop links with Malaysia so that we can better understand that part of the world which, while culturally very different from us, is rapidly moving towards a certain homogenisation in terms of world trade.

The Government should extend, through HEADCO and our various other third level institutions, the promotion of Ireland as a place for education, particularly for learning English as a foreign language. There is an Asian perception that the only English-speaking country in Europe is the United Kingdom, but that is not the case. The reason such a large number of Malaysian people are here is accidental and historic. It is, in part, related to missionary activity. There is no such connection with Japan.

The point was made that European students should study in Asia and I suggest the European Union should develop an Asian version of the Erasmus programme. There should be some facility across Europe for an Erasmus type programme. I suppose Marco Polo would be the proper [24] title to give to it if we are talking about an Asian dimension.

The Taoiseach: It is a good name.

Mr. Quinn: Some European explorer or adventurer should give his or her name to a programme that would facilitate European students to study areas and topics of interest for a period in Asian universities of their choice. This should happen for the very reason Deputy Bruton pointed out — knowing the enemy, whether in commerce or war, is an important condition for successful trading. Knowing what your competitors are doing and how they think is critical to maximising one's opportunities in relation to any kind of contest or conflict. We simply do not know, to the extent that we should, the nature of these societies which are immensely complex by our standards. Anybody who has had the opportunity and privilege to visit countries like Japan and Indonesia will be aware of the complexities involved.

The European Union has an obligation in terms of transferring the European social model. We either choose to go down the Anglo-American road which says the European social model is far too expensive and uncompetitive and that, therefore, we have to strip away layers of support and solidarity because globally it is no longer competitive. I do not share that point of view but I recognise its intellectual legitimacy. If the rest of the world continues to have different standards in relations to social solidarity then the cost of maintaining the European model in a globally competitive way will become extremely heavy.

The path of immigrants trying to get into Europe is an indication of how much individual citizens would like to live in a European social model of society. It is an indication of what the ordinary individual would like for him or herself or for their families. In terms of developing an understanding of what Europe is about, the Irish social partnership model is a good example because it indicates that one can combine social solidarity with economic growth and competitiveness all at once as we have seen. Europe should look at ways in which it can communicate, convince and convey these sort of values and understandings.

There is a need for this country to develop an institution like the National Democratic Institute or the Republican Institute in North America, to try to engage in educational programmes in countries that have not yet become full democracies, such as Korea, but which are slowly going in that direction. There is a need to engage in programmes of civic society construction which are absolutely essential to underpin the kind of activity I have already referred to.

Earlier, I referred to the death of Mr. Frank Taylor. How many people are there, like him, in the new emerging democracies, who selflessly serve and give of their time without any expectation of material gain? We know from what we have read and experienced that that is not the [25] case in the emerging democracies in central and eastern Europe and in parts of Asia.

If we want to maintain support for underpinning the European social model into the next century, we must explain to people how such a model comes into existence and how such a form of social organisation stays in existence and maintains its competitive economic position. There is a great deal of work to be done in this area and I commend the Taoiseach for reporting to the House. Perhaps the Joint Committee on Foreign Affairs could look at this issue. These issues will confront us at a much faster rate than many of us realised on previous occasions.

Mr. Gilmore: I suppose it was inevitable and understandable that the intensive series of meetings between the Taoiseach and the British Prime Minister in London in the early days of April diverted attention from the important ASEM summit. I welcome the opportunity to consider and discuss the summit. While the ASEM summit received little public or media attention, it was, nonetheless, an important summit taking place against the background of the continuing economic crisis in Asia and the ongoing concerns about human rights abuses in many Asian countries.

Asia contains some of the most populous countries in the world which have great contrasts of wealth and poverty. North Korea, for example, faces a potentially devastating famine while other countries have huge social problems, such as child labour, exploitation and the drugs trade. There are countries where the citizens do not enjoy an acceptable level of human rights. Many Asian economies have made enormous progress over the past two decades. However, there is a lesson to be learned from what has happened in Asia in terms of how quickly a tiger economy can turn out to be a dead horse with terrible consequences for its people, particularly those at the lower end of the ladder.

I welcome the development of formal relations between the European Union and the Asian countries. This is only the second summit so the relationship is still at an early stage. While all 15 members of the European Union are involved, I note that just ten Asian countries were represented at the summit. I hope steps will be taken to expand the process to include all the Asian countries.

There is clearly potential for closer relations in terms of political dialogue and economic co-operation as well as in the social and cultural fields. I suppose it is inevitable that the main focus of attention will be on economic issues, given the extent of the economic crisis in Asia, the consequences for its people and, as we have already seen, its potential for knock-on damage in other parts of the world, including Europe. A number of companies in Ireland, for example, have already suffered as a result of the Asian crisis with consequences for earnings and employment.

I welcome the steps being taken by the European [26] Union to assist the Asian countries in overcoming current difficulties and resuming economic growth. However, it is important that the first priority should be to assist those in Asia who are suffering increased poverty as a result of the crisis rather than bailing out institutional investors, especially the European private banks which are particularly exposed in the region but many of whom contributed to the problems by reckless investment policies. Whatever about the implications of the crisis for the European banks, we must not lose sight of the human dimension for hundreds of millions of Asian people who already exist on incomes barely above subsistence level. During the South American debt crisis in the 1980s, the IMF insisted that international investors had to be paid back in full, a policy which condemned many countries in that region to further years of economic and social decline.

Indonesia has more than 20 million people or 10 per cent of its population living on less than $1 a day. Tens of millions of families in rural areas depend for survival on money sent back from those working in industries or construction sites in the cities. More than 150,000 construction workers in Java have lost their jobs. Approximately 400,000 Indonesian workers have been repatriated from Malaysia and in Thailand unemployment is projected to increase by more than 90,000 during this year. One million people are expected to lose their jobs in South Korea.

There are continuing reports of human rights abuses in many Asian countries. In The Irish Times today there is a Reuters report of an Amnesty International statement yesterday which accused the South Asian Governments of ignoring a litany of abuse against children, ranging from bonded labour to selling them into prostitution. Some of the abuses it lists are as follows:

In India a High Court committee found children detained by police were subject to “shockingly savage and barbarous treatment” including electric shocks and piercing of private parts with sticks covered with chilli-powder and petrol. In Sri Lanka a boy of 12 was stripped by police and beaten repeatedly ……. More than 9,000 girls were sold each year from Nepal and Bangladesh — destined for a life of sexual slavery in India and Pakistan.

We have seen television reports of the abuse of child labour and the exposure of the relationship between some retail outlets in this country and child labour in Asian countries. We must put respect for human rights and workers' rights at the centre of the approach we take to the Asian economic crisis.

Some of the so-called remedial steps demanded by the IMF, a doubling of real interests in some countries and major cutbacks in public spending in others, can only worsen the position of the poor and unemployed in those countries. I hope the Government will continue to press through the European Union for a more humane and balanced approach to the crisis.

[27] A related area of concern against the background of the Asian economic crisis is the multilateral agreement on investment, which is due to be completed by May and which will have major consequences for poorer countries. The OECD countries, including Ireland, are rapidly moving towards conclusion of a new agreement which aims to liberalise investment while, at the same time, reducing the controls on the activities of multinational corporations. Poorer countries will be under enormous pressure to sign up to the MAI, but it fails to strike the right balance between the granting of investor rights and responsibilities to respect human rights and protect the national resource base of poor countries and communities. A conclusion of the MAI along the lines proposed will only exacerbate the problems of poorer Asian countries.

I was pleased to hear the Taoiseach report that the Minister of State at the Department of Enterprise, Trade and Employment, Deputy Tom Kitt, had raised with his Indonesian counterpart the question of East Timor which is receiving considerable public attention in this country as a result of the outstanding work done by the East Timor Ireland Solidarity Campaign. I hope our Government will continue to express the strong views of the people on this matter, to seek to bring an end to the brutality in East Timor and to encourage others in the international community to stop turning a blind eye to the problem there.

I agree with the comments by the two previous speakers that in the globalised economy in which we live the difficulties of the Asian economy will increasingly be a matter to which we will have to give attention. We must not do that in a way which is selfish from the point of view of our economic interests but in a way which takes account of the rights of the people who live in Asia. It is not acceptable to those of us who believe in a civilised approach to living that those who live in the better off part of the world can benefit from the exploitation and degradation of people in poorer parts, which is what is happening in parts of Asia.

Minister for Foreign Affairs (Mr. Andrews): It is a matter of regret to me that I was unable to be present in London for the ASEM II summit on 2 to 4 April. The House will understand I felt obliged to remain at the multi-party peace talks which were taking place in Belfast at that time. However, my place at the summit was very ably filled by my colleague, the Minister of State at the Department of Enterprise, Trade and Employment, Deputy Kitt, and I express my sincere gratitude to him for undertaking that role.

As previous speakers said, Asia is a vast continent with enormous physical and human resources. It is an area of the world with which Ireland has not traditionally had deep-rooted connections. It is only in recent decades that we have reached out through trade and diplomatic [28] links to many of the countries with whom we are now involved in the ASEM process. Therefore, we greatly welcomed the opportunity provided by the summit to deepen our relationship with these Asian countries and to make and renew contacts with them at the highest level. Deputies will be aware that much of East and South-East Asia has been confronting over the past year or so the effects of the Asian financial crisis which has had such a devastating impact on the economies of several countries in the region. It was not surprising accordingly that the financial crisis dominated the summit and that much of its proceedings were devoted to discussing how the current difficulties could be overcome and how similar problems could be avoided in the future.

As the Taoiseach pointed out in his contribution, leaders at the summit meeting on 4 April adopted, by consensus, two important statements which spell out the core values and the aspirations of the ASEM process. One of those statements was on the financial and economic situation in Asia. The chairman's statement was a more general document which covered all aspects of the ASEM mandate. Both are available in the Oireachtas Library.

The financial crisis in Asia was a major topic of discussion at ASEM II and our Asian partners were pleased that an important statement on the matter was issued. The financial response of Europe to the crisis has been substantial and the summit provided a useful opportunity to highlight the manner in which it has been managed, chiefly through the IMF and the World Bank. The decisions taken at the summit to create an ASEM Trust Fund and a Financial Crisis Expertise Network will restore the conditions necessary for economic growth. Overall, the summit allowed for a joint message of confidence that the measures being implemented by the Asian Governments, combined with the international financial institutions, will lead to a full recovery.

ASEM II provided an opportunity to further improve Ireland's bilateral trade and inward investment opportunities with several ASEM partners, mainly by creating a climate in which business contacts can be further facilitated. The Asia Europe Business Forum, which was held in the margins of the summit, was attended by several business representatives from Ireland. The business forum considered practical means of co-operation between private sectors and their meeting fed into discussions at the summit.

Two important initiatives, the trade facilitation action plan and the investment protection action plan, were finalised at the summit. I am convinced that the implementation of these initiatives will generate improvements in the business environment for traders and investors operating in Asia and in Europe. The investment protection action plan marks an important step forward in the work of increasing two-way investment flows between Europe and Asia and provides a framework for future work in this field.

One of the many decisions taken at the summit [29] relates to the Asia-Europe Environmental Technology Centre. I feel that improving co-operation in the transfer of environmentally sound technologies to developing countries is an important way of promoting sustainable development and I am sure that the establishment of this centre will provide a sound basis for this.

Deputies will be aware that the ASEM process is based on three pillars, economic, political and social-cultural issues, also known as people-to-people issues. While it is true that the Asian financial crisis did dominate much of the discussion among leaders earlier this month, the European side made it clear at all times that political issues must maintain an equal status in the process. While, in principle, any relevant political issue can be raised by any of the participants, it was agreed in advance that the main emphasis on this occasion should be given to the situations in the Korean peninsula, Cambodia and Kosovo and to the question of EU enlargement. In discussing these topics, the European side made a point of raising the issue of human rights and fundamental freedoms at every suitable opportunity. Deputy Gilmore mentioned the question of Indonesia and East Timor. I assure him and other Members that the Minister of State, Deputy Kitt, raised that matter with the Indonesian Foreign Minister during the summit.

In relation to social and cultural issues, the summit participants welcomed the establishment of the Asia-Europe Foundation and commended its work in promoting people-to-people contacts and enhanced intellectual and cultural exchanges between the two regions. They reaffirmed their support for the foundation and recommended to their national institutions, foundations, corporations and other relevant non-government organisations that they co-operate with the foundation. Other projects which were endorsed at the London summit included the holding of further Asia-Europe Young Leaders Symposia and the establishment of the Asia-Europe Centre at the University of Malaysia.

In addition, ongoing efforts were endorsed to promote the welfare of children, to co-operate in combating illicit drugs, to expand and enhance educational links, to strengthen co-operation on environmental issues and to take forward work in co-operation on environmental disaster preparedness. Several other activities and projects are to be encouraged and developed further within the context of the Asia-Europe Co-operation Framework. For example, the summit noted a report on the trans-Asian railway network project coordinated by Malaysia.

ASEM Foreign Ministers held a preparatory meeting on 2 April, the day before the first plenary session of ASEM II was held. That evening a wide-ranging discussion on international political issues was held over dinner at Lancaster House. As I mentioned earlier, I was very ably represented on that occasion by my colleague, the Minister of State, Deputy Kitt. Among the issues discussed over dinner were Cambodia, European [30] security architecture, EU-ASEAN relations and Burma/Myanmar. I understand the discussion on Burma was particularly interesting. The ASEAN countries argued that Burma be admitted as a full member of the EU-ASEAN relationship, while the European side made it clear it fully supported regional co-operation and integration but that basic standards must be respected. European Ministers called on the ASEAN countries to put pressure on Burma in relation to its human rights record and also enunciated their serious concerns with regard to the question of the large quantities of narcotic drugs originating in Burma.

The Minister of State, Deputy Kitt, undertook two bilateral meetings on my behalf with the Ali Alatas, the Foreign Minister of Indonesia and Surin Pitsuwan, the Foreign Minister of Thailand. In the meeting with Mr. Alatas, the Minister of State, Deputy Kitt, availed of the opportunity to put across a strong expression of the Irish people's deep concerns regarding the question of East Timor and our distress at the apparent failure of the Indonesian authorities to make any concessions in relation to the human rights of the East Timorese people. He made a strong plea for progress to be made in the dialogue taking place between Indonesia and Portugal on East Timor under the auspices of the UN Secretary-General. Ireland offered to assist in helping to resolve the situation in any way possible, including hosting a meeting of the intra-Timorese dialogue, if that was considered helpful by all sides. My colleague had a most useful discussion with the Thai Foreign Minister covering many issues, including Thailand's current financial crisis and difficulties and the human rights situation in Burma/ Myanmar.

In his statement the Taoiseach mentioned the holding of the first EU-China summit in London on 2 April. This centred on the further development of EU-China relations in a broad number of areas, including progress in the EU-China human rights dialogue. Both sides agreed on the importance of achieving further progress through a continued EU-China dialogue covering all aspects of human rights. EU concerns on human rights were mentioned, including Tibet, and reference was made to the impending EU Troika Ambassadors' visit there. The Chinese Premier stated China's intention to sign the UN Covenant on Civil and Political Rights and this was welcomed by the EU.

I wish to draw attention to the good work that has been taking place within the ASEM framework since the first summit meeting held in Bangkok two years ago. The London summit underlined the many important initiatives which are now well under way. Although it may be difficult to point to concrete decisions or spectacular achievements which resulted from ASEM II, the most important achievement was that the summit took place at all and that a spirit of harmony and mutual understanding pervaded its proceedings. When one thinks of the diverse nature of the countries involved in the process and the difficulties [31] which have existed between many of them in the past, this was achievement in itself. When the political atmosphere is right between countries, all sorts of previously impractical dreams can become reality. That to my mind is the main purpose of ASEM.

It is in the same spirit that I look forward to the report of the ASEM Vision Group, which held its first formal meeting this month. The purpose of that group is to chart a way forward for the ASEM process in the coming years. We are very fortunate to have a former Taoiseach, Deputy Reynolds, as Ireland's representative on this group. I have no doubt he can bring to this task the same inspiration and ingenuity he applied as Taoiseach to the peace process on this island, in devising structures for a new relationship between Asia and Europe. I commend the resolution to the House.