IN OBAMA'S 10-DAY TRIP TO ASIA
United States president, Barack Obama, recently concluded a ten-day trip that took him to India, Indonesia, South Korea and Japan. In this review, Tunji Ajibade, a Consultant Writer, highlights the significant of the trip. White House described President Barack Obama’s November 2010 trip to Asia as "highly significant." Now the ten-day journey has gone down as the longest time the president ever spent outside the United States since he was elected in 2008. To different people, the trip was undertaken for different reasons, no matter what the president’s aides said. President Obama, hoping to put his party's mid-term election defeats behind him, has turned to foreign policy, some stated. An embattled president representing a weakened nation went to find solutions to his country’s problems, said others. Views are also expressed that the president has become a salesman, embarking on the trip merely to have more markets for American products in Asia in order to open up job opportunities at home. And yet others said the trip is about China, that it is about the need to maintain a balance of power, an attempt by America to cut to size a China that has been flexing its economic muscles around Asia. Some focused on the cost of the trip instead, calculating what it would cost the American taxpayers long before the president left Washington DC. 200 million dollars per day was one claim, a figure that White House has since rejected as false.
But the administration did say what the president was going out to do. It situated it within a broader context. Secretary of State Hillary Clinton gave the basic outline: "The United States can, must and will lead in this new century. Indeed, the complexities and connections of today's world have yielded a new American moment, a moment when our global leadership is essential, even if we must often lead in new ways." Other administration officials gave smaller dosages of Clinton’s statement: "Asia is critical to our foreign policy strategy. It's the fastest-growing market in the world. It's fundamental to our export initiative," Obama’s deputy national security adviser, Ben Rhodes said. As for the baseline, America has an unemployment rate of 9.6 percent, a serious cause for worry though a payroll growth has been reported recently.
In that light the president took upon himself the task of creating jobs by doubling U.S. exports in 5 years. There is no doubt that Asia plays a part in that. According to Treasury Under Secretary for International Affairs Lael Brainard, "Many Asian economies in particular have strong potential to fuel domestic demand either through domestic consumption in some cases, through major infrastructure investments in other cases, and through both, in other countries." To him, this scenario provides important opportunities for America's dynamic exporters, and it will also boost growth in broad terms.
In order to achieve this, one of the things the Obama administration intended to do during the trip was to bring India closer. That is important as that country is America’s friend, has the second largest population in Asia, and is the second fastest growing economy after China with which US has a tense trade relationship at the moment. It was in India where the president’s visit was highly successful that he announced a "comprehensive partnership". In Indonesia his next port of call, and where Obama spent years as a child, he cemented economic ties. The administration planned to put a stagnated U.S.-South Korean free trade agreement back on wheels. The agreements on that was not finalized for signing by the leaders of the two countries until Obama left for Japan. Here the president wanted the G20 summit dominated by concern over official manipulations of the Chinese currency, the yuan, as well as get summiteers to agree on a framework to ease global economic imbalances.
Ten days passed. Obama and his team returned home. Critics have expressed their views on the outcome of the trip: Yes, trade is fundamental to a sustained and strong U.S. economic recovery and the creation of new American jobs, but inability to sign the stagnated trade deal in the course of the visit to Korea showed that America is not yet in control on the trade front; Foreign leaders stood up to Obama at the G20 summit in Seoul, refusing to back Washington's desire for hard targets to support its push for balanced global growth and pressure on China to move to a market-driven exchange rate; And at the Asia-Pacific economic forum, Washington did not achieve much in its effort to have its way for larger market in TransPacific Partnership trade area. "Clearly, the trip was more difficult than Obama hoped for," a historian and public policy expert at Princeton University in New Jersey, Julian Zelizer, offered.
But the view of the administration itself has always been optimistic both before the trip and after it. White House has been claiming credits, insisting the trip was a success. Yet the question must be asked: Why did Obama administration take on Asia at this time when it needs to boost US economy, create jobs and foster trade – the first two of which are essentially consequent on the last? It is by taking a look at this that the significance of the trip may be better understood, rather than the much politicized positions taken at home, especially after American voters handed the House of Representatives to the Republicans largely over the administration’s handling of the recovery process of the US economy.
The continent of Asia is home to 60% (more than 4 billion) of all human beings in the world. This ensures Asia has vagaries in wealth distribution among its 46 nations. It also means there is wide differing cultures, government systems, historical ties as well as environments. Among these nations, China, Japan, India, South Korea, Indonesia and Iran have the largest economies in terms of nominal GDP. Of the lot, China alone has the largest economy in Asia and the second largest economy in the world in terms of GDP by purchasing power parity. Japan, India, and South Korea come behind it. Nations such as Hong Kong, Japan, South Korea, Singapore and Taiwan, (not mentioning the Middle East) have wealth mostly concentrated in them when measured by GDP per capita. At the moment, China and India are at the head of a rapid growth and industrialization in Asia (with the exemption of a couple of Asian nations). These two (coming after each other respectively) are the two fastest growing economies in the world. With its rapid economic growth and large trade surplus with the rest of the world over the years, Asia now has over US$4 trillion of foreign exchange reserves. That is more than half of what the entire world boast of.
Apart from this, countries here mostly have world’s largest foreign reserves. As at June 2010, China (Mainland) had $2,454 billion while Hong Kong had $245 billion. Japan held $1,019 billion in June 2009, Russia - $456 billion by April 2010, Republic of Korea held $286 billion by July 2010, India - $284 billion in July 2010 while Taiwan had $372 billion in September 2010. The implication of this is that the interchangeability of the US dollar, Euro and Pound Sterling are heavily influenced by Asian central banks. Some economists in the western countries see this negatively, and they have asked their various governments to do something about it.
The effects of all this on US economy, especially, are multi-dimensional and far reaching. There is a link between the US economy and economic activities in Asia, a reason Obama’s administration is worried about a China that deliberately keeps the exchange rate of its currency low for obvious economic advantages against the US especially. This is one point in favour of observers who point out that minimizing Obama’s trip to Asia basically to the need to create job belittles a more serious and diverse problem as well as both the tangible and symbolic achievements of the trip. However, if there is anything obvious the Obama administration never hid it desires to tap into, it is the large market of Asia. With the advantages it enjoys, Asia’s role in the future of global economy is central. No nation can overlook the continent. The US needs to pay it constant attention and win advantages for itself wherever it can. It is a reason President Obama’s turn in that direction at a time he decides to double US economy in five years is a worthwhile effort. Ajibade lives in Abuja. [email protected]