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Reproduced from EU and Asia: Sharing Diversity in an Inter-Regional Partnership, by Romano Prodi (Singapore: Institute of Southeast Asian Studies, 2002). This version was obtained electronically direct from the publisher on condition that copyright is not infringed. No part of this publication may be reproduced without the prior permission of the Institute of Southeast Asian Studies. Individual articles are available from < http://bookshop.iseas.edu.sg >

EU AND ASIA: SHARING DIVERSITY IN AN INTER-REGIONAL PARTNERSHIP

© 2002 Institute of Southeast Asian Studies, Singapore

The Institute of Southeast Asian Studies was established as an autonomous organization in 1968. It is a regional research centre for scholars and other specialists concerned with modern Southeast Asia, particularly the many-faceted problems of stability and security, economic development, and political and social change. The Institute’s research programmes are the Regional Economic Studies (RES, including ASEAN and APEC), Regional Strategic and Political Studies (RSPS), and Regional Social and Cultural Studies (RSCS). The Institute is governed by a twenty-two-member Board of Trustees comprising nominees from the Singapore Government, the National University of Singapore, the various Chambers of Commerce, and professional and civic organizations. An Executive Committee oversees day-to-day operations; it is chaired by the Director, the Institute’s chief academic and administrative officer.

© 2002 Institute of Southeast Asian Studies, Singapore

Singapore Lecture 6 July 2002

EU AND ASIA: SHARING DIVERSITY IN AN INTER-REGIONAL PARTNERSHIP

Romano Prodi

Institute of Southeast Asian Studies, Singapore

© 2002 Institute of Southeast Asian Studies, Singapore

First published in Singapore in 2002 by Institute of Southeast Asian Studies 30 Heng Mui Keng Terrace Pasir Panjang Singapore 119614 E-mail: [email protected] Website: © 2002 Institute of Southeast Asian Studies, Singapore ISEAS Library Cataloguing-in-Publication Data Prodi, Romano. EU and Asia: sharing diversity in an inter-regional partnership. (Singapore lecture series, 0129-1912; 22) 1. European Union. 2. European Union—Membership. 3. European Union countries—Foreign economic relations—Asia. 4. Asia—Foreign economic relations—European Union countries. I. Title. II. Title: European Union and Asia: sharing diversity in an inter-regional partnership DS501 I597 no. 22 2002 sls2002026348 ISBN 981-230-195-X (soft cover) ISSN 0129-1912 All rights reserved. No part of this publication may be reproduced, translated, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the Institute of Southeast Asian Studies. Typeset by Superskill Graphics Pte Ltd. Printed in Singapore by Stamford Press.

© 2002 Institute of Southeast Asian Studies, Singapore

CONTENTS

I

Opening Address

Lee Hsien Loong

1

II

EU and Asia: Sharing Diversity in an Inter-Regional Partnership

Romano Prodi

3

III

Discussion

IV

Closing Remarks

13 Chia Siow Yue

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I Opening Address Lee Hsien Loong

Your Excellency, Mr Romano Prodi, President, Commission of the European Communities, Distinguished Guests, Ladies and Gentlemen. It gives me great pleasure to welcome all of you to the 22nd Singapore Lecture. We are honoured to have His Excellency President Prodi with us today, on his first official visit to Singapore and Southeast Asia as President of the European Commission. President Prodi has an impressive career. Also known as “Il Professore”, he is widely admired for his modesty and integrity. He was Professor of Economics and Industrial Policy at the University of Bologna, Italy and Harvard, in the United States. In the 1970s, he founded the economic research institute, NOMISMA, in Bologna. Prior to his appointment as President of the European Commission (EC) in September 1999, President Prodi was Italy’s Prime Minister. During his premiership from 1996 to 1998, he successfully reformed the Italian economy and fiscal policy, paving the way for Italy’s entry into the European Monetary Union. President Prodi is an expert in economics and industrial policy and has an excellent track record as the leader of Italy’s largest industrial and financial state holdings, the Italian Institute for Industrial Reconstruction (IRI), in the 1980s and early 1990s. President Prodi presides over the Commission at a critical time when the EU is faced with the enormous and complex challenges of enlargement and the reforms necessary for a Union of twenty-five member states to function smoothly and effectively. These new challenges follow the successful implementation of the euro, a feat unparalleled in history.

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A champion of European integration, President Prodi has to put forward bold proposals to further strengthen the Union. He also combines political experience, economic knowledge, and diplomatic skills, which will serve him well as he leads the Commission in these important tasks ahead. At a time when the EU is preoccupied with enlargement, we are pleased to see that the Commission has not neglected Asia. We are honoured that President Prodi has chosen Singapore as the venue to articulate his vision for an EU-Asia partnership. This demonstrates the continuing importance that the EC places on its relations with Singapore and Southeast Asia. Singapore’s ties with the EU are anchored in history, economics, and culture. Relations between us are strong and based on mutual interests. Economically, the EU has a major stake in Singapore. Singapore accounts for 30 per cent of the EU’s trade with Southeast Asia and 40 per cent of the EU’s total investments in the region. We are a strong supporter of the ASEAN-EU and Asia-Europe Meeting (ASEM) processes, which have institutionalized and improved region-to-region links. In September 2001, the EC adopted an updated Asian policy paper entitled “Europe and Asia: A Strategic Framework for Enhanced Partnership”. The paper sets out the overall strategy for its relations with Asia in the coming decade in a wider framework of political, economic, cultural, and other contacts. Singapore welcomes this development, and we are also pleased that the EC will establish an EC Delegation Office in Singapore later this year. May I now invite His Excellency President Romano Prodi to deliver the 22nd Singapore Lecture and share with us his perspective of Asia and EU relations.

© 2002 Institute of Southeast Asian Studies, Singapore

II EU and Asia: Sharing Diversity in an Inter-Regional Partnership Romano Prodi

Deputy Prime Minister, Mr Chairman, Ladies and Gentlemen. It is both a pleasure and an honour to be with you today to deliver this Singapore Lecture. The list of speakers invited to give this series of lectures includes many prestigious names and world leaders. I am happy to join their company and I thank the Institute of Southeast Asian Studies for inviting me. This is my second visit to Asia this year, but my first to Southeast Asia as President of the European Commission. I welcome this opportunity to discuss issues of mutual concern with the distinguished company present today and in meetings with members of the Singapore Government. Co-operation between Europe and Asia is going from strength to strength: we have ASEM, the co-operation framework with ASEAN, and a wide range of bilateral and informal contacts. We have close economic ties and share many concerns. Our relationship now embraces far more than just “trade and aid”. So why have I chosen diversity as my theme today? Diversity defines the relations between two entities that are not identical. Diversity in nations and cultures, in interests and objectives, creates the need for an effort towards convergence so that we can

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work together. It characterizes the regional structures we are building in Europe and Asia, and indeed our inter-regional partnership. Integration processes are taking place at the two ends of the Eurasian continent. Indeed, there is a clear trend towards regional co-operation throughout the world. In fact, regional co-operation, subject to certain principles and conditions, is one of the most effective answers to the challenge of globalization. I will come back to this issue later. Ladies and gentlemen, we in Europe have been pioneers in regional integration for close on fifty years. Here in Asia it is a more recent process. In the European Union it has given us tangible returns: peace, stability, and growing prosperity. The greatest reward of all is that we have stopped settling disagreements by armed conflict. But this has taken many years of hard work. We are now gearing up for the entry in 2004 of 76 million people to our existing Union of 380 million people. The enlarged Union will then account for more than a quarter of world GDP and one fifth of world trade. This expansion from six members to the current fifteen, and soon twenty-five, is an amazing achievement. At the same time, we have driven forward the process of “ever closer Union” — creating common policies, a single market, and now a single currency — all built on common institutions: a Parliament directly elected by the citizens, a Council representing the Member States, a Commission as an executive body representing the general interest, and the new Central Bank. We can say that that Europe is a union of peoples and states.

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Of course it has put a strain on our structures. With up to ten countries shortly joining the Union, the Brussels institutions and decision-making machinery are shortly due for a shake-up. The Convention on the Future of Europe will map out the future shape of the EU. And we are doing it in a way that is more open and democratic than ever before. All sources of democratic legitimacy at national and European levels are represented within the Convention: national parliaments and governments from the current and future Member States and the EU institutions. These achievements have been built on respect for diversity and pluralism. These are fundamental values of European integration. To give you a concrete example: when I work in the Commission I always use English or French as a working language; when I go to Parliament, I speak only my native Italian. And everybody there speaks his own language. Of course it is a problem. We share around twenty or twenty-one languages but this is what Europe means, it is the Europe of peoples, nations and states. And we must hold on to these values if we are to move forward and make a success of enlargement. This is because the union we are building rests on deeply-rooted national, regional, and local identities. Our institutions have to reflect a balance between pooled sovereignty and the preservation of national prerogatives. I shall even go so far as to say that the EU epitomizes respect for cultural diversity and for minorities. I heard the best definition of Europe in the Romanian Parliament: Europe is a union of minorities. But we have constructed a union on the basis of common values and objectives. The Single Market and the single currency are springboards to the growth and prosperity we all want.

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But we do not want growth and prosperity at the price of a fragmented society, a society where the poor and vulnerable are left behind. Nor do we want them at the price of the environment or our health. The income gaps within our societies and between North and South are one of the main issues we must tackle urgently together. Ladies and gentlemen, our project is, I believe, of great relevance in Asia and elsewhere, especially at a time when all nations have to come to terms with the implications of globalization and increasing interdependence. It is relevant both for its lessons in regional integration and for the way Europe is finding a common voice on the international stage. We believe that the qualities we have developed in building Europe — the qualities of negotiation, collective decision-making, and respect for diversity — have given us a distinctive voice. And we firmly believe that this puts us in a unique position to give the lead and broker solutions when dealing with the key issues of globalization and governance. We must find solutions if we are to deal with the new threats to peace and security. The EU does not intend to avoid its share of the responsibility for maintaining peace and stability in the world. The political vision that inspired us to embrace the new democracies in eastern Europe is proof of that. Ladies and gentlemen, if our distinctive voice is to be heard loud and clear, we in the EU have to develop common policies and structures to dialogue with the outside world. Our Common Foreign and Security Policy must become just that. We must harness our enormous potential as an international player. I am referring to more than just foreign policy and defence. It means welding together all components of our external action: diplomacy, trade and development, economic policy, and external

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management of the euro zone. Not forgetting common policies with an international dimension — such as the environment, energy, transport, and culture. Our external policy has to be flexible and responsive to new developments in world politics. The moves towards wider co-operation and integration in Asia are important developments. We are following them with keen interest. To take only one chapter, Europe’s trade with Asia is bigger than Europe’s trade with America. Here in Asia there is a staggering diversity. It is certainly impossible to apply any blanket policy. Asia includes some of the largest countries in the world, some of the richest, and some of the poorest. Some countries have gained their independence only recently. They are still in the nation-building stage. Many are home to several cultures and peoples. Asia is one of the world’s great spiritual and cultural cradles. It can pride itself on the diversity of its cultural heritage. But you are also aware that a globalizing world means working together. And you are building new structures for co-operation and dialogue — ASEAN Plus One and Three, or even Four, the South Asian Association for Regional Co-operation, and the Shanghai Co-operation Organization. All have their own histories and their special roles to play in the region. Singapore, a small island State whose influence far outstrips its size, has always been keenly aware of the importance of co-operation. You have been the driving force in ASEAN and in initiatives such as the ASEAN Regional Forum and ASEM. We welcome all these regional developments, as well as Asia’s recent progress towards monetary co-operation, prompted by disillusionment with international financial institutions.

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While I wish you every success, let me warn you that the road is long and difficult. Working towards a common currency is a huge challenge: it implies structural reforms and real convergence between all the economies involved. We warmly welcome regional integration as a stepping-stone towards broader global co-operation. It is in everyone’s interest to support the WTO and to foster a better system of international governance. Both Asia and Europe are keenly aware of the importance of foreign trade and investment. Both regions are dependent on the success of the open, rules-based multilateral trading system. For both regions it is crucial to safeguard this system and extend it to those who have benefited less. The Doha Development Agenda points in the right direction. But we must make sure that the momentum built up is not lost, and there are a lot of dangers around. To make the new WTO Round a success, we must get the poorer countries on board and offer active support for their development. The EU has already acted to improve the terms of trade for these countries with its “Everything But Arms” initiative. In practical terms, this initiative means that all imports from the poorest countries may freely enter the EU, everything but arms that is. The European Union played a key role at the Monterrey Development Conference and pledged to increase its aid budget. We are working hard to make a success of the Johannesburg Conference on Sustainable Development next September. Johannesburg is a chance to make good the promises of the Rio

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Earth Summit and to achieve the Millennium development goals: to eradicate poverty, to improve living standards based on sustainable patterns of consumption, and to ensure that the benefits of globalization are shared by all. EU leaders reaffirmed their commitment to the Johannesburg Summit at their last meeting in Seville just a few weeks ago. The EU will throw its weight into getting agreement on quantifiable targets and timetables in the key areas of water, energy, health, agriculture, and biodiversity. Of course I have to say that at the last G-8 meeting in Canada we made progress in this subject, but I also have to tell you that our resources are certainly not yet sufficient for Africa. We want Johannesburg to send a clear political message that globalization must work for the benefit of us all. And here the European Union’s credibility and experience in handling problems collectively and democratically will give it added weight. We intend to continue building up our proactive partnership with Asia. I am happy to note that the EU-Asia partnership has grown closer and more comprehensive. This is exemplified by ASEM. The ASEM process, which of course was initially inspired by Singapore, is unique. It is the only regular inter-regional forum solely for Asian and European leaders. And it has helped a lot to strengthen EU-Asia relations. Mutual awareness and trust now mean we can turn our diversity to account in the search for common solutions to global challenges. Preparations for the fourth Asia-Europe summit — ASEM 4 — in Copenhagen next September illustrate this.

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Ministerial-level meetings have taken place on the environment, migration, finance, and the economy. The recent foreign ministers meeting in Madrid last April gave us a unique opportunity for open dialogue on burning issues such as terrorism, the Middle East, and India and Pakistan. The EU is committed to strengthening its presence in the Asian region. Opening more channels of communication between our two regions is an important part of the European Commission’s strategy for a broader-based presence in Asia. I am very happy that we shall have a European Delegation here in Singapore by the end of the year to ensure constant liaison between us. Our main aim in consolidating our network in Asia is to increase mutual awareness. In the past, we sometimes lacked the confidence to point out clearly the differences between Asia and Europe. I believe it is now time for greater openness. We have come to realize that the differences between our regions are an asset in our relationship. Mutual understanding is the key, and promoting it is an important part of our co-operation. Here in Singapore our joint Asia-Europe Foundation — the ASEF — has an important role to play in promoting people-topeople contacts, intellectual networking, and cultural exchanges between our two regions. Diversity is crucial for our two cultures as well. Of one thing I am sure: Europe and Asia will never be melting pots where cultures merge and disappear. Asia and Europe will never allow that. Our cultures are too firmly rooted and too vital. Our long histories have taught us to value and nurture our diversity.

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Cultural cross-fertilization is another thing. Because we both appreciate diversity and dialogue between cultures within our regions, we are ready to respect and learn from others. We have long been engaged in fruitful exchanges: just think of the wealth of wisdom and know-how that passed along the Silk Route, that early international trade route. Our partnership has matured to a point where the advantages are clear for all. We are advancing in the direction of “equal partnership” called for in our Asia strategy. We can now roll up our sleeves and concentrate on the real issues. Closer relations between Europe and Asia also have enormous impact on the world as a whole. If we can find areas of agreement, we can exert great influence in the world. I am thinking of the problems of globalization. Globalization has brought enormous opportunities. It has also brought new problems that have to be tackled collectively. A world of increasing interdependence needs fair rules on global governance, because there are issues which no individual country can deal with on its own. In Europe, we are trying to bring together countries that are very different. You might call such regional globalization “modest”, but it is not that modest when you look at it. The enlargement that we are working on this year will entail a 33 per cent increase in land area, a 30 per cent increase in population, and only a 6 to 8 per cent increase in income. We are bringing together, with enormous effort, countries with big differences in income. This means changes to our regional and social policies, and distribution of a lot of resources to the peripheral countries in order to help them develop. This was done when Spain, Portugal and Ireland joined the Union, and it was successful. Twenty years ago,

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Ireland was poor. Now Ireland has a per capita GDP that is higher than the United Kingdom, partly because of the huge funds for structural aid. Historically, this may be an aberration. But this is how Europe has forged ahead and now we have this new challenge. And the biggest challenge is the Balkans. The Balkans will never be at peace if they are not integrated into the European Union. Not today, not tomorrow, but in the longer term this is quite possible. The GDP of the Balkans region is no more than 1.7 per cent of the EU’s GDP and so even if we do make this effort, it is something within our grasp. This is the type of policy that we are trying to develop in the context of what I earlier referred to as a minor, modest, but important globalization. We need the widest possible global alliances to tackle the problems that concern us all and to preserve the assets that belong to us all. Fortunately, our Europe-Asia partnership is giving rise to an increasing number of global alliances. For better or worse, we are all caught up in globalization. You in Singapore are well placed to know that. It can be for the better. Globalization in the true sense can offer us a world that is wealthier, both materially and culturally. The examples of Europe and many Asian nations show that modernity can go hand in hand with strong regional and local identities. Ladies and gentleman, by harnessing our different assets and skills and by drawing on the diversity that gives us our identities, we can become really stronger. Thank you very much.

© 2002 Institute of Southeast Asian Studies, Singapore

III Discussion Chairman: I thank Professor Prodi for his Lecture and I now invite questions from the floor. If you should wish to ask a question, please identify yourself, keep your questions brief and to the point, and one point at a time. I ask for the first question, please. Question: I am Henri Chollet, a former Ambassador of France to Singapore: Mr President, you have very convincingly described the present approach of the European Union with Asia. You have explained that it will develop harmoniously and efficiently through the common effort and not by avoiding the diversity, but taking advantage of the diversity of the situation of the two groups of countries. I would like to ask you a question, Mr President. Why don’t we in Europe follow the same path, the same technique, the same way that Europe is following in its relation with Asia, with the so-called new candidates for enlargement of Europe? Europe has fifteen members now, it contemplates to introduce another thirteen or twelve new members. It is an enormous amount. Isn’t there a risk to see a “new giant with a soft belly” being created? And isn’t the way as it is done with the relations with Asia more progressive and more realistic? May I make two comparisons. One is very trivial, please forgive me, but I think it is convincing, and the other more classical. The first comparison, the more trivial one, is the confection of mayonnaise, which is to add oil, preferably olive oil, progressively, and to avoid adding in a large amount at the same time because it will dilute the mayonnaise, making it impossible to eat. The second example is more classical. It is well known to historians — the fall of the Roman Empire in 476 through the inclusion of the new states, Visigoths, Ostrogoths, Burgundians, and so on.

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The Roman Empire was forced to absorb them and it was the beginning of its end in 476 when it exploded because it became too unwieldy. Europe is not forced to admit new members, and I wonder if the procedure that you follow with Asia would not be the better choice. That is my question. I have not mentioned the infinite discussion that will imply the distribution of powers between the new members and the old. Romano Prodi: You have touched on a big problem, and I am very grateful. You asked, whether in business terms Europe has the capacity to expand so quickly and so widely? Where are the borders of Europe? These are really crucial questions that you raised and, believe me, they are also problems for us because nobody has ever defined Europe. There are some who assume that the twelve candidates are definitely in simply because they were spiritually part of Europe, and that the fall of the Berlin Wall sparked a real political movement shared by everybody. Of course, a lot of work is needed to make this wish reality. But I am convinced that the decision we have taken, namely to negotiate with the twelve countries — giving a future Union of fifteen plus twelve — will not have any “Roman Empire” effect because there is an underlying unity. But it is still a serious problem. I have been to the European Parliament twice to take part in discussions with the title: “Where are the borders of Europe?” It was an impossible question to answer because we are still in a phase where many want to enter the European Union. In my last bilateral meeting with Mr Putin he told me that, according to Russian opinion polls 58 per cent of Russians want to join the European Union. He asked me if they were considered European or Asian. I said that they are certainly European but that they had one eye turned towards Asia. They are also too big. It would lead to us having two capitals. They would have a position of

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strength in Europe, two-fifths of members of the European Parliament would be Russians. We are not creating NAFTA, we are not creating Central America. Let us take Mexico: it is a member of NAFTA but that does not make it a U.S. state with representatives in the Senate and the House of Representatives. That is the difference. We in the EU are creating a new political entity. It will take time; it will take generations. I am explaining to you the difficulties and problems we have and that we are not creating any barriers to trade. And so we return to the problem of borders. I do not know where the borders of Europe are. We are capable of coping with enlargement but we need a big change in our institutions to do so. It is not by chance that in 2002 we are deciding not only on enlargement but also on the future shape of Europe. The members of the Convention on the future of Europe represent governments, parliaments and the European institutions. We have taken one and a half years to discuss the new-look Europe because we need new institutions and, above all, we cannot go on with unanimous voting. Unanimity is not possible with twenty-five states, so we have to adapt our institutions just to avoid that “Roman Empire effect”. This is the strategy we have chosen. Turkey is a different case. It is a candidate but we are not yet at the negotiation stage because it does not meet the co-operation criteria regarding democracy and so on. In my opinion, the Balkans will have to join because otherwise there would be no peace and no solidarity in that part of Europe. Nobody knows what will happen, nobody knows how many generations will be needed to build a different Europe. Question: My name is Claudio Piron, from the Standard Chartered Bank: The point you made about diversity is well taken and we all share in that belief. But there is one area perhaps where we don’t have that diversity and that is in the global foreign exchange reserves.

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With 76 per cent of global foreign exchange reserves in U.S. dollars, we have an overdependency on the dollars in the foreign exchange reserves of central banks. My question would be, would you welcome a greater role of the euro within that system? Do you think it would help to create better stability in the global financial system? In reading many of the reports from the Asian-European meetings, foreign exchange stability is something that you focus on. Do you think a greater role would help that stability in the world? Finally, do you think the European Union is prepared to take on that role as guardian in the financial system for the stability of the world? Romano Prodi: This question should be handled by a consultant, not the European Union, but thank you anyway. When we created the euro it was no small undertaking. It was like giving birth. But that baby will grow up in time and grow up to be strong and healthy. Even so, the euro was quite a big baby. The income of the euro zone is currently equivalent to 66–67 per cent of income in U.S. dollars. Of course, there is a difference in that the borders of the euro zone are not clear. There is the big question mark hanging over the United Kingdom, for example. But public opinion in Denmark and Sweden, countries which are also outside the euro zone, has swung around completely. They have tested the euro and they are now more favourable. Other countries will enter the zone, step by step, after careful thought, and I think that in the medium term the euro will be a real alternative to the dollar. It is already gaining ground. Three or four years ago when I was Italian Prime Minister I advised Chinese Prime Minister to take the euro. He later told me that I had given him very bad advice because the euro was going down. But let me say this. The Chinese themselves are a major country and are the second largest holders of reserves. In future their reserves will be half in dollars and half in euros. There are two reasons for holding the same quantities in dollars and in euros. First,

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we don’t want a monopolar world. There is a strong political reason for this because a political entity’s currency is part of what it is. Second, the euro will strengthen. In future, I think the euro will have a role, standing, and weight comparable to the dollar. To take just one simple illustration, the eurozone countries’ participation in the IMF will in theory be more than that of the Americans. In a few years’ time, when Europe has 500 million people, we shall be by far the biggest economic entity in the world. Question: My name is Simon Tay. I am the Chairman of the Singapore Institute of International Affairs: May I ask you a question about managing diversity or sharing diversity. It is an issue that concerns us, too, here in Southeast Asia. We are multi-racial. Movements recently in Europe have been of concern to us because we have seen in some senses a return of a right that is concerned about immigrants and Muslim people within Europe’s borders. Are these concerns shared by others in Europe? And do you think it will affect Asia-Europe relations? Romano Prodi: The immigration debate is a very hot issue in Europe for a simple reason. When I said that Europe was not a melting pot, I meant that we preserve our languages and our heritage. I was asked at an Indian university the difference between the enlargement of Europe and the enlargement of United States — because even the United States enlarged. My answer was very simple. When the Americans went West they found the Rocky Mountains and Idaho. The EU is embracing Budapest and Prague — places with strong, deeply-rooted societies. So the situation is quite different. Problems arising from immigration cause a lot of anxiety in places with a strong identity but Europe cannot do without immigration.

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Politically, it is very difficult. Immigration is indispensable for a simple reason: Germans, Italians and French of the younger generation do not want to do night shifts in hospitals or work long hours in agriculture or construction. So we need immigrants. But this creates fear. At the last European Council in Seville we had a lengthy discussion on immigration. We started with an antiimmigration proposal but in the end the position we took was against illegal immigration. It is a tough position but it shows we want to properly manage the flow of immigrants, who are increasingly needed in Europe. This is a shock for Europe but it cannot be halted. Europe is becoming more diverse not only through immigration but also through enlargement. Because of communist rule, many countries in eastern Europe have borders that don’t coincide with their ethnic make-up. There are Hungarians in Slovakia. There are Russian minorities in the Baltic countries. So one of our principles of enlargement concerns obligations to minorities. Concretely, there is an obligation to apply the same rules to all ethnic groups; without guarantees concerning minority languages and jobs in the public administration, these countries will not join the European Union. It is a difficult and important process we are engaged in now. If you don’t guarantee local democracy and equal participation in the local administration for minorities, you cannot be a member of the EU. Question: I am Michael Ewing-Chow from the Faculty of Law, National University of Singapore: Thank you Mr Prodi for the talk. To share diversity in an inter-regional partnership must inevitably require people to put aside differences for a common goal. For Europe, which was recovering from the ravages of two world wars, this common goal at that time, with the German–French Steel Commission, was a common goal of ending the European wars. EU would not have succeeded today if not for such a common goal — a symbiotic ideal of ending a war. What similar common goal or symbiotic ideals exists for EU-Asia partnership?

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Romano Prodi: You mean that Europe is where it is now because of a common history of tragedy, two world wars, and that this is a unique experience? If I understood your question correctly, you want to know whether the European Union-Asian partnership has a common ideal to build on. I am convinced that we are now in a phase where we share many common ideals and can work together in many areas, including economic ones. We have more and more shared rules. Of course this is not the type of union that we are building in Europe. I am speaking now as President of the Commission. We still have many differences but with cultural cross-fertilization they are diminishing. The Asia-Europe partnership is facing a big challenge and the current economic outlook inspires two completely different views. The first is one inspired by fear of globalization. I will explain very quickly. According to this view, Asia has much lower costs and Asians are very intelligent — they absorb technology very quickly. This means we ought to be afraid. That is the first model. The second approach is to say “Asians are very intelligent but we can handle it”. We can specialize and advance in some subsectors. If we integrate, our imports would obviously increase enormously but so would our exports. This would make us all better off. I am fighting for this second approach. But it is a fight because this issue creates a lot of political anxiety both in Asia and in Europe. If entire industries are forced to migrate, everybody in the communities concerned will be against globalization. This is why I mentioned social solidarity and justice in my speech. They are not just empty words of a politician, they are necessary. Finally, I am convinced that if we want globalization, we have to manage it. This means we have to work together.

© 2002 Institute of Southeast Asian Studies, Singapore

IV Closing Remarks Chia Siow Yue Mr Lee Hsien Loong, Deputy Prime Minister and Minister for Finance, Your Excellency Mr Romano Prodi, President of the European Commission, your excellencies, distinguished guests, ladies and gentlemen. This has been an unusually bountiful year for the Singapore Lecture series. Usually it is an annual affair, but this is the third Singapore Lecture we have organized for this year. The Institute of Southeast Asian Studies is honoured and privileged to have President Romano Prodi deliver the 22nd Singapore Lecture on the theme “EU and Asia: Sharing Diversity in an Inter-Regional Partnership”. Europe is the leader in economic integration. Currently the European Union comprises fifteen European states and is preparing for the accession of another ten to thirteen nations in eastern and southern Europe over the next few years. The EU-15 has a combined population of 380 million, a combined GDP of about 9,000 billion euros and a foreign trade of over 6,000 billion euros. The EU is preoccupied with the widening and deepening of European integration. Unlike Europe, Asia is still very fragmented. In East Asia, economic integration is a recent phenomenon. In Southeast Asia, we have ASEAN established in 1967, but the ASEAN Free Trade Area just became a reality early this year. In the case of Northeast Asia there is no integrated grouping. In the case of South Asia, we have the South Asian Association for Regional Co-operation (SAARC). Therefore East Asia is not a superpower like the way the European Union is a superpower in the global community. We are beginning to see the emergence of greater economic integration.

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We have now not only ASEAN but an emergence of ASEAN Plus Three. We also have in the works an ASEAN-China Free Trade Area and an ASEAN-Japan economic partnership agreement in the making. Excellencies, distinguished guests, ladies and gentlemen. This morning President Prodi has spoken on the milestones in the development of the European Union and the possible lessons that we can draw for our region. It is obviously very clear that a united Europe has greater leverage and bargaining power than any one of the individual fifteen European nations. Likewise if East Asia wants a bigger voice we have to be more united. President Prodi also highlights the case and argues for a closer EU-ASEAN partnership, leveraging on our diversities as well as on our common interests. He is definitely of the view that regional economic integration as well as inter-regional partnership and co-operation are necessary to meet the challenges of globalization today. It is now my very pleasant task to ask all of you to join me in thanking President Prodi for his very enlightening address. The Institute would also like to thank Deputy Prime Minister Lee Hsien Loong for chairing this 22nd Singapore Lecture, and we are privileged by the presence of the Chief Justice, members of the Singapore Cabinet, members of the Singapore Parliament, members of President Prodi’s European delegation, and so many distinguished guests. The Institute would like to present President Prodi with a painting of Singapore by Mr Ong Kim Seng, Singapore’s leading watercolour painter. I would now like to invite the Chairman of the Institute’s Board of Trustees, Mr Chia Cheong Fook, to make the presentation. Ladies and gentlemen, the 22nd Singapore Lecture is now concluded. I thank you all for your support and presence, and wish you a very good day ahead. Thank you.

© 2002 Institute of Southeast Asian Studies, Singapore

ROMANO PRODI Romano Prodi took office as President of the European Commission in September 1999. Before this appointment, he was Prime Minister of Italy from 1996 to 1998, during which time he prepared Italy to meet the economic criteria for joining the European common currency (the euro) on 1 January 2002. Mr Prodi is a former Minister for Industry (1978–79) and was elected as a Member of Parliament in 1996. He has twice served (1982–89, and 1993–94) as Chairman of the Institute for Industrial Reconstruction (IRI) by government appointment. The IRI is the largest Italian and European industrial and financial holding. A graduate of the Catholic University of Milan, Mr Prodi has been a Visiting Professor at Harvard University, a Researcher at the London School of Economics, and a Professor of Economics and Industrial Policy at the University of Bologna. He is also a member of the Board of Trustees of the Massachusetts Institute of Technology, and is the author of numerous scientific publications on European industrial policies, public enterprises, energy, and the working of different economic systems. Born in 1939, Mr Prodi is married and has two sons.

© 2002 Institute of Southeast Asian Studies, Singapore

THE SINGAPORE LECTURE SERIES

Inaugural Singapore Lecture 14 October 1980 The Invisible Hand in Economics and Politics by MILTON FRIEDMAN 2nd Singapore Lecture 30 October 1981 American Foreign Policy: A Global View by HENRY KISSINGER 3rd Singapore Lecture 2 December 1982 Peace and East-West Relations by GISCARD D’ESTAING 4th Singapore Lecture 10 November 1983 The Soviet Union: Challenges and Responses as Seen from the European Point of View by HELMUT SCHMIDT 5th Singapore Lecture 8 November 1984 The Western Alliance: Its Future and Its Implications for Asia by JOSEPH M.A.H. LUNS 6th Singapore Lecture 5 December 1985 Deficits, Debts, and Demographics: Three Fundamentals Affecting Our Long-Term Economic Future by PETER G. PETERSON

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24 7th Singapore Lecture 25 November 1986 Trends in the International Financial System by RAYMOND BARRE 8th Singapore Lecture 27 November 1987 The Challenge of Change in the Asia-Pacific Region by BOB HAWKE 9th Singapore Lecture 14 December 1988 Regionalism, Globalism and Spheres of Influence: ASEAN and the Challenge of Change into the 21st Century by MAHATHIR BIN MOHAMAD 10th Singapore Lecture 15 October 1989 Trade Outlook: Globalization or Regionalization by BRIAN MULRONEY

11th Singapore Lecture 3 April 1991 International Economic Developments by R.F.M. LUBBERS

12th Singapore Lecture 4 January 1992 U.S. Policy in the Asia-Pacific Region: Meeting the Challenges of the Post Cold-War Era by GEORGE BUSH

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25 13th Singapore Lecture 8 September 1994 India and the Asia-Pacific: Forging a New Relationship by P.V. NARASIMHA RAO

14th Singapore Lecture 17 January 1996 Australia, Asia and the New Regionalism by PAUL KEATING

15th Singapore Lecture 14 January 1997 Reforms for the New Era of Japan and ASEAN: For a Broader and Deeper Partnership by RYUTARO HASHIMOTO

16th Singapore Lecture 6 March 1997 South and Southern Africa into the Next Century by NELSON R. MANDELA

17th Singapore Lecture 30 November 1999 China and Asia in the New Century by ZHU RONGJI

18th Singapore Lecture 14 February 2000 Global Values: The United Nations and the Rule of Law in the 21st Century by KOFI A. ANNAN

© 2002 Institute of Southeast Asian Studies, Singapore

26 19th Singapore Lecture 27 November 2000 Peace on the Korean Peninsula and East Asia by KIM DAE-JUNG

20th Singapore Lecture 14 January 2002 Japan and ASEAN in East Asia: A Sincere and Open Partnership by JUNICHIRO KOIZUMI

21st Singapore Lecture 9 April 2002 India’s Perspectives on ASEAN and the Asia-Pacific Region by ATAL BIHARI VAJPAYEE

22nd Singapore Lecture 6 July 2002 EU-Asia: Sharing Diversity in an Inter-regional Partnership by ROMANO PRODI

© 2002 Institute of Southeast Asian Studies, Singapore