The "Baltic Challenge Award" is designed to stimulate the development of useroriented ICT solutions in the Baltic Sea Region, promoting increased regional cooperation and joint ventures. Twelve countries are invited to participate. The Baltic Challenge is launched by the County Administrative Board of Stockholm, supported by the City of Stockholm and partners in most countries in the region.

- The aim is to create a strong and united ICT market in the Baltic Sea Region, built on cooperation, partnership and exchange of knowledge, says Mats Hellström, County Governor of Stockholm. In addition, a joint regional market will increase the global competitiveness of the Baltic Sea Region.

Read the full press release at www.balticchallenge.net/press_index.html

Europe should view a rising Asia as an opportunity not a threat. In a special address at the World Economic Forum’s Asia Roundtable, Peter Mandelson, Commissioner, Trade, European Commission, Brussels, said that Europeans should position themselves to take advantage of Asia’s rise, or risk being marginalized. “What poses the far greater danger for the future is not the rise of Asia but the introspection and fearfulness of Europe.”

“People have to see the growth of Asia and its rise not in the short term, but in the longer term. People have to see the growth of Asia’s markets as an opportunity for European exporters and investors. Rather than some sort of rising giant that is setting about crushing Europe’s economic livelihood.”

“Europe needs more confidence about its potential and its ability to manage change and to remain competitive. The EU is the world’s leading exporter of goods and services and the world’s leading investor abroad. Asia and its growth is the means of sustaining this performance, not reversing it.”

While Mandelson said that there were legitimate worries from a European perspective regarding the rise of Asia – European competitiveness, protection of intellectual property, the opening up of public procurement, genuine market access for European service businesses and persistently high industry tariffs – Europe needs to respond by taking urgent action to reassert its technological leadership. “We need to advance economic reforms to equip people for change and to bring governments and business to work in partnership to improve competitiveness.”

Mandelson said the EU’s export performance remains strong, with Europe more successful than the US in competing at the top end of the market. This leaves Europe well positioned to reap the benefits of a rising generation of wealthy Asian consumers, specifically households in India and China, hungry for luxury Western imports. “Emerging Asia is, and will increasingly be, the essential trade partner of choice for Europe.”

This point was taken up by Kim Hyun-Chong, Minister of Trade of the Republic of Korea, who said he was surprised to hear Mandelson making reference to the defensiveness of Europe in relation to Asia. He added that a more prominent Europe would do much to balance the strength of the US in Asia. He said that a more significant European presence in Asia would be welcome to achieve more of a balance between the US and Europe.

Mandelson said that despite the spectre of heightened competition it raised, Asian growth rates above 9% are not a danger to Europe; this represents a new source of economic growth, dynamism and stimulus to innovation, as well as an opportunity for cooperation. To illustrate this point, he said that 20 years ago Japan was the only Asian country among the EU’s top-ten trading partners. Today, four of the top ten are Asian: China, Japan, South Korea and Taiwan – a trend he expected to grow and evolve further.

In reference to the subject of surging Chinese textile exports, currently a sore point with European manufacturers, Mandelson said, “China is entitled to the prize of the liberalization of this sector, it’s entitled to the prize of its WTO membership, it’s entitled to the generous growth in its exports and market share in this sector.”

He added that a more innovative attitude to the winds of economic change and the shifting of the global economic centre to Asia should come from the realization that, in time, this will grow the Chinese economies and markets and ultimately benefit European producers of goods and suppliers of services.

Mandelson also stressed the role of governments in bringing about acceptance of change and providing assistance and help to smooth the path for change. “What we need to do in the meantime is to understand people’s misgivings, to understand the insecurities and fears that such economic change sparks, and we have a responsibility as governments to help manage that change and support people and industry in the process of change and transition from one era to another.”

He said the world is on the cusp of a series of succeeding generations of changes and that modernization and openness to change and restructuring is never ending. Mandelson added that Europe needs to build a stronger, more dynamic relationship with the countries of Asia individually and bilaterally, but also with the Asian region.

This, he said, must move beyond “goodwill and warm words” and necessitates a commitment to multilateral as well as bilateral cooperation. “We need to work together to create new economic and trade opportunities within a rules based economic system – both through multilateral cooperation within the WTO and where this helps, through bilateral and inter-regional trade agreements …. These tracks should run together.”

With regard to region-building in Asia, Mandelson said he would like to build a partnership between Europe and Asia to help deepen regional integration in Asia. Lim Hng-Kiang, Minister of Trade and Industry of Singapore, agreed that there were a lot of lessons to be learned from the EU’s experience on the creation of a regional economy. “All of us in Asia are on the threshold of looking towards greater economic integration. Within ASEAN we are working towards an ASEAN economic community by 2020. ASEAN is also working with China, Japan, Korea and India to look at greater integration.”

Lim also agreed with Mandelson’s point that cooperation between Europe and Asia had been allowed to fall into a state of “benign neglect”: Lim added that there is definitely scope for more collaboration, and that important steps had been taken to look afresh at new cooperation. “We decided in Vietnam to set up a group to undertake a feasibility study and look into an eventual free trade agreement between ASEAN and EU.” He also echoed Mandelson’s earlier hope that conclusive progress could be made through the Ministerial Conference of the WTO in December in Hong Kong.

On the impact of an evolving Asia on international trade, Mandelson said that efforts to strengthen intra-regional cooperation should not overshadow the need to push multilateral trade liberalization forward. He highlighted the crucial importance of the Doha Round. “You’re aware of the pressures on the Round. We need it to make progress in a more even and balanced way and in advance of the mini-ministerial in Paris next week, we have already seen some people express concerns.”

“Considering what’s at stake, considering the big prize potentially for developing countries, we must not let an ambitious conclusion to the Round slip our grasp. Next week’s meeting will be a significant test of many people’s political will and resolve to make progress anew.”

He conceded, however, that multilateral negotiations can be frustrating and slow, and might not cover all areas, and this was where regional or bilateral negotiations would take centre stage.

On the second day of the World Economic Forum’s Asia Roundtable in Singapore, five key personalities from major growth markets in Asia (Japan, Republic of Korea, China, Singapore and Hong Kong SAR) brought their experiences to the table and candidly shared their thoughts on deregulation, liberalization and reform strategies that have been hailed as success catalysts for growth in the private sector.

Despite a recent OECD report stating that the Japanese economy is in its best shape in the last ten years, many problems are brewing in the face of the reality that Japan’s population is decreasing with an ageing society. With this, it seems that there is an urgent need for more aggressive strategies to secure Japan’s competitiveness against the background of the declining and ageing population.

“Japan’s 21st century vision focuses on proactive reforms instead of reactive reforms,” said Heizo Takenaka, Minister of State for Economic and Fiscal Policy and for Privatization of the Postal Services; Member of the House of Councillors. “Two strategies that will allow Japan to prosper as the central growth area in Asia are maximizing productivity to bring about new value-added and making the most of globalization through free trade agreements (FTAs) and economic partnership agreements (EPAs)”.

“Participating in trade allows you to participate in the entire value chain so that you can fit the part where your country has the highest competitive advantage,” said Lim Hng-Kiang, Minister for Trade and Industry of Singapore, agreeing with Minister Takenaka’s endorsement for globalization. Lim further noted that there is an East Asian movement where societies are transforming from agrarian societies to industrial societies. In this East Asian Development Model, emphasis is given to the export market, mobilizing of national savings, the use of foreign direct investments (FDIs) as well as massive infrastructure. This creates a domino effect where the model unleashes the potential or a relatively cheap but reasonable skilled, educated workforce that, in turn, attracts the intrusion of national and foreign capital.

“The key to Asian success is not just embracing globalization, trade and investment as the key factor in past success but is a sustainable strategy going forward,” said Minister Lim. “Embracing global markets has also instilled discipline. Industries exposed to the winds of global competition have learnt to be nimble and highly efficient.” Minister Lim believes that embracing global markets is a “sustainable strategy”.

Kim Hyun-Chong, Minister of Trade of the Republic of Korea, pointed out that there is only a window of opportunity and what is done in this small window will affect us for the next ten years. He attributes the nation’s recovery from the 1997 financial crisis to massive restructuring. “Promoting further trade, promoting transparency, promoting democratic values… Reforms have to be supported by liberalization,” said Kim Hyun-Chong. He emphasized that countries have to deal with their sensitivities and promote transparency for reforms to be successful, citing the Korean-Chile FTA.

Despite the common viewpoint that China may be developing too quickly, Chen Feng, Chairman, China Hainan Airlines, People’s Republic of China, emphasized that China is developing at a rate that is “not too fast” but “still too slow”. He substantiated his view saying that while most major markets in Asia started development much earlier, China has only recently joined the league. He attributed China’s leap forward to good reform strategies and low labour costs, teamed with a hard-working culture that contributes to the global economy. As he candidly put it, “Taking care of others means that you’ll take care of yourself.”

“The role of governments and regulators should really be to open up and allow a level-playing field and intervene only when they see market failure,” said Michelle Guthrie, Chief Executive Officer, Star Group Limited, Hong Kong SAR; Young Global Leader. “Reform is inevitable, but there is an increasing tendency to try to regulate with a certain outcome in mind.” In Guthrie’s perspective, barriers are not coming down enough.

Singapore, 28 April 2005 –The World Economic Forum opened its second Asia Roundtable today in Singapore. Over 250 participants from 34 countries are gathering together to identify the critical issues and generate insights necessary to develop the right strategic response. The theme of the Roundtable is “Tilting the Global Balance: The Strategic Implications of Asia’s Growth”. The Roundtable is being held from 28 to 29 April in cooperation with the Singapore Economic Development Board (EDB).

One of the key issues discussed during the opening plenary session was the rise of China and India as the new economic juggernauts that would outstrip the US and Europe to drive global growth, and the social and economic consequences of such a breakneck speed of growth.

“The rise of China and the opening up of India is probably the biggest story this century. China and India are the fastest growing economies in the world,” said Raymond Lim Siang Keat, Minister in the Prime Minister’s Office, Second Minister for Finance and Second Minister for Foreign Affairs of Singapore. “Already, China is overtaking the US as the major trading partner of Japan; some analysts reckon that in 50 years’ time, China will overtake the United States as the world’s largest economy and India will not be far behind.”

Claude R. Béglé, Chief Executive Officer, GeoPost International Management & Development Holding, Germany, agreed that Asia would indeed play a vital role on the world economic stage. “Before you had basically one tonne of cargo from Europe towards Asia and vice versa; three years ago it was a ratio of one to Asia and two from Asia; this year, it’s already one from Europe, three from Asia.” He also highlighted the importance of Japan and India. “Definitely the centre of gravity of the world is moving towards Asia. The big question is the relative weight of China and India versus the traditional giant which is Japan and I think the shift is good for the world and for Europe.”

Lim also said that this has created an imbalance that has brought about the recognition within ASEAN countries that integration is crucial. “ASEAN countries recognize that integration is not a matter of choice but really a matter of necessity. That an ASEAN of half a billion people spread over ten fragmented markets is quite a different proposition from an ASEAN of ten integrated markets and economies.” He added this has given rise to a common resolve to reduce tariffs, unify standards and develop a habit of consultation with neighbour countries. Indeed, during the SARs crisis, Lim pointed out that we saw an instinctive reaction to coalesce and deal with issues together. But Lim stressed that this regionalism is one that is open and inclusive, not insular.

Also discussed was the issue of bilateral tensions between China and Japan and the necessity for putting the past aside and recognizing Japan’s important constructive role in the region and beyond. Ichiro Aisawa, Senior Vice-Minister for Foreign Affairs of Japan, highlighted the economic importance of China to Japan and the world. He said that Japan’s trade with China now exceeded the volume of its trade with the US. “The smooth progress and good bilateral relationship between Japan and China will be extremely vital to the continued growth of the global economy and that incidents that might arise between the two nations I’m sure can be dealt with successfully “ He added that his vision is for both countries to lead global growth.

Aisawa stressed the need to leave the past behind while remaining sensitive to the situation. Jiang Jianqing, Chairman and President, Industrial and Commercial Bank of China, People’s Republic of China and Co-Chair of the Asia Roundtable 2005, echoed his sentiments, saying it was important for both countries to look ahead and resolve their differences amicably. “As two major countries, if we want to maintain a stable economy for Asia, the two countries should work and survive in a very harmonious manner.”

Lim also stressed the need for regional governments to balance the factors to make this pace of growth sustainable as Asia makes the transition to becoming the economic centre of the world, a point that was taken up by Mohamed A. Alabbar, Chairman, Emaar Properties, United Arab Emirates and Co-Chair of the Asia Roundtable 2005. “I have no doubt in my mind that the shift has taken place, the growth potential in the region is unbelievable but the risk is really the speed of growth. I’m always worried about energy and natural resources to supply this unbelievable rate of growth.”

Michael Hawker, Chief Executive Officer and Managing Director, Insurance Australia Group (IAG), Australia and Co-Chair of the Asia Roundtable 2005, agreed, stating that the resulting pressures on resources and social structures and security would be untenable. “I think we’re dealing with not only the speed of change but the quantum of change. … the challenge of the speed is therefore implicated in the global governance structures … unless there is an improvement in global governance structures, then many economies will revert to protectionist measures to try and slow down the rate of change.”