Asian Resources and Economic Power Research Paper

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Asian Resources and Economic Power

Asia has always been a centre of attention in world's politics. A single decision made by one of the Asian countries has a tendency of altering the world's political and economic scenery. A change in Afghanistan changed the perception about world's security and enunciated an on-going war of peace. Similarly, China's growth has altered economic policies of many countries in the world. Hence, whatever takes place in Asia shakes the world to its roots. This region has a lot of importance from economic point-of-view. However, even internally, there is a constant struggle in Asian countries for power and this battle is supported by the resources they have. Who has the most and knows how to use it, will decide the fate of this region.

A lot of Asian countries have desired of developing a framework of policies based on Western model. However, they have successfully managed to come up with more sophisticated foreign policies structure along with the evolution of business, criminal and political interests. Most of the key economic sectors in Asia countries are well-merged with criminal acts and illegal activities but an unconditional access to banking system has played its role in attracting foreign investment.

Asian countries include Afghanistan, Armenia, Azerbaijan, Bahrain, Bangladesh, Bhutan, Brunei, Burma (Myanmar), Cambodia, China, Georgia, Hong Kong, India, Indonesia, Iran, Iraq, Israel, Japan, Jordan, Kazakhstan, Korea, North, Korea, South, Kuwait, Kyrgyzstan, Laos, Lebanon, Malaysia, Maldives, Mongolia, Myanmar, Nepal, Oman, Pakistan, Philippines, Qatar, Russia, Saudi Arabia, Singapore, Sri Lanka, Syria, Taiwan, Tajikistan, Thailand, Turkey, Turkmenistan, United Arab Emirates, Uzbekistan, Vietnam, and Yemen. However, out of all these countries, the countries having a tendency of ruling Asia and becoming a major global power are very few. Lately, ASEAN countries (which include Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam), Russia, Japan, China and India appear to be key players showing major leap in growth. Rest of the countries either have a very small share in Asian economics or are lagged behind because of their internal power and politics chaos (e.g. Pakistan, North and South Korea). There are other countries such as KSA, UAE, Iran and Iraq who are rich in natural resources but due to poor policies management and internal political stability, are unable to make the most of their resources.

A careful view of who has what and the effectiveness of using one's resources will enable us to understand the economic power Asia holds because of its resources:

China:

China is undoubtedly one of the most powerful countries of Southeast Asia and certainly has an ability of growing tremendously to become world's leading player. China has its reach extended from Central Asia coupled with its power provided by natural resources, to the major shipping routes of Pacific Ocean. Later, in Democratic Ideals and Reality, Mackinder predicted that along with the United States, China would eventually guide the world by "building for a quarter of humanity a new civilization, neither quite Eastern nor quite Western." (Thapliyal, 2010). However, while ignoring what Mackinder mentioned we can consider China as a major sea and land power because of its 9000 miles temperate coastline.

China has been showing a steady growth backed up by very powerful and effective policies designed by the government economical think tanks. China's national power and its effective defense and military mechanism has an ability of affecting Asia to a greater extent and changing current world's scenario altogether. Where China's leadership is committed to building a Comprehensive National Power (CNP) and leveraging its Strategic Configuration of Power (SCP), to reach its strategically motives, acts as a key factor in determining the future of Asia. Backed up with decades of struggle and tremendous growth in almost all sectors of economy, it is expected to have a major impact on Asia-Pacific region from multiple dimensions. Enhancing its CNP seems to be the major objective of China, which when supported by growing defense mechanism, and economic layout, plays a key role in designing China's foreign policy.

We need to acknowledge the fact that China's growth over last two decades has accelerated exponentially (and has also resulted in internal crisis in China). In geostrategic terms states across Asia are likely to be "sucked" into the Chinese economic vortex through increasing economic ties, resources relationships, and investments in infrastructure. As one analyst recently observed that China's Asian strategy is linked directly to its multinational strategy -- using multilateral and regional organizations to bolster its economic and political ties across Asia -- which supports its modernization strategy.

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Although China's material resources have increased over past two decades declaring it as the most powerful state of Asia but a more alarming question is how China is using these resources to have influence over other Asia states and the future of Asia in turn.

Considering the asymmetrical power structure in South-east Asia with ever-growing Chinese influence, the reaction of other Asian countries in response to it, decides the fate of Asia. Results so far are mixed. While China has been able to harness much of the region's economic energy in a favorable direction, it does get its way in territorial and resource conflicts.

China's burgeoning economic rise has restructured economic networks in East Asia, fueling regional production for China as the final assembly and export point to the rest of the world. The Chinese government has also tried to consolidate its economic leadership position by driving broader economic regionalism. Strategic decisions such as Greater Mekong Sub-region initiative of the Asian Development Bank, has strengthen China's ability of providing relatively cheaper products to the market as the China's reach to the ASEAN countries (which are major raw material providers) and the ports of Indian ocean, improves because of this decision. Also because of Free trade agreement wit ASEAN countries, China is enjoying easy access to the world trade worth USD 4.3 trillion (Goh, 2011). While China has taken measures to support the weaker Southeast Asian states, it is also sharing growth with them and yet exercising power from multiple dimensions: The size of its manufacturing sector produces economies of scale, and its political clout lends significance, even legitimacy, to the enterprise.

Involved in the region since the 1990s, the Chinese strategy in Central Asia is undoubtedly multifaceted. A key driver of China's policy in the region, however, appears to be mirroring its Africa policy. In other words, China is steadily increasing its regional presence through the acquisition of stakes in energy and infrastructure assets, and by providing "no-strings attached" loans. For example, Beijing recently agreed to provide Astana with a U.S. $10 billion loan to be used exclusively for the development of the oil and gas industry: a move likely to be used to expand its energy links in the region.

Although several bilateral agreements have been finalized between Beijing and Dushanbe, Tashkent, Almaty and Bishkek respectively and Beijing has attained a balanced position with Russia in the Shanghai Cooperation Organization, its strongest foothold has been gained through a carefully targeted investment strategy. This is evident in Tajikistan, with Chinese participation in the aluminium industry and in Kazakhstan, with key commercial agreements signed with kazmunaigaz and Kazatomprom. Europe has begun to note with concern China's investment patterns, with Chinese foreign direct investment and long-term loans equalling an estimated U.S. $13 billion in the region.

Hence, a unipolar power model is what constitutes China's success.

Russia:

Russia once the global master has lost its position as world's supreme power however it has successfully managed to use its commercial horizon to enhance its influence and impact in Central Asia. Kazakhstan is the major evidence of Russia's power although it is the only direct route of Russia to other states. Russian think tanks have played it smartly by developing banking systems into other states by direct and indirect acquisitions. Theoretically speaking, this will increase Russian ability to influence the economical decisions such as commercial and loan policies. Vnesheconombank, for example, gave Astana a U.S. $3.5 billion loan to be used solely to purchase Russian products. It is also likely that Kazakh BTA Bank will follow a restructuring path that involves a possible sale to Russia's Sberbank (NATO, 2009).

Other than financial sector, Russia is also strengthening its grounds in energy sector. Furthermore, mining is also one of Russia's centres of attention these days. Companies including Polyus Gold and Polymetal have gained considerable leverage over gold and copper deposits; and lukoil continues to expand its presence. For example, Moscow offered capital at a time of crisis to ensure that lukoil could purchase BP's stake in the Caspian Pipeline Consortium project. It is also worth noting that lukoil was invited to sit on Kazakhstan's Foreign Investments Council in 2003 by President Nursultan Nazarbayev (Fedorinova & Khrennikov, 2012).

Russia and other major powers in Central Asia, in pursuit of gaining influential power through effective commercial strategies, have involuntarily made contribution to reaching current political status in Asia. If the business deals made by Russia are investigated for understanding its interest,….....

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