By Endy M. Bayuni
Chief Editor, The Jakarta Post
They say life begins at 40. For ASEAN, life began 40 years ago at its inception. But this year, as it turns 40, the journey to a community is just beginning for the 10 members in this high profile regional organization.
The highlight celebrating four decades of the Association of Southeast Asian Nations (ASEAN) will be the endorsement of a charter by leaders at their annual summit in Singapore in November. It’s an important document that will dramatically change the face and character of the regional organization, and hopefully pave the way for the establishment of a Southeast Asian community.
ASEAN has some long standing problems to resolve, one of which is the membership of Myanmar. The Myanmar issue has impeded progress in many fronts, including in ASEAN’s dealing with other countries and regional groups like the European Union, and it is also obstructing the group’s move to become one single community. But the charter may just provide the solution to all these problems.
In a sign of things to come, probably heralding changes that will take place in ASEAN, the group this month came out with a statement criticizing the brutal crackdown against pro-democracy protests in Myanmar in September. The statement, describing the “revulsion” at the Myanmar junta handling of the protests, marked the first time in history that the group openly criticized one of its own members. Prior to this, ASEAN has steadfastly held on to the principle of non-interference, which also meant refraining from making comments on the domestic affairs of the other members.
Circumstances dictated that ASEAN this time came out with such a strongly-worded statement (though it falls short of condemning the Myanmar junta) even before it enacted the charter. For many years, ASEAN has defended its dealing with Myanmar as part of its “constructive engagement” policy.
Now, the draft charter, already severely watered down by members, still upholds the non-interference principle, but allows members to criticize others in certain circumstances. Presumably, ASEAN members felt that the events in Myanmar in late September justified the collective intervention by ASEAN members.
Once the charter is enacted, ASEAN can take a stronger position vis-à-vis Myanmar than it has in the past. But expulsion is not one of them.
ASEAN, it appears, is now moving on to be more in tune with the present, rather than continuing to live on its past glory. The endorsement of the charter will be the milestone that distinguishes ASEAN of the last 40 years and ASEAN in the coming decades.
THE FIRST 40 YEARS: CONFIDENCE BUILDING MEASURES
Having won accolades for its successful diplomacy in the region and the world, ASEAN increasingly finds that the same principles that have helped to make it one of the most successful regional organizations are now impeding its progress.
Two principles underlined what has now been popularly called the “ASEAN Way”: One is the consensus-based decision making mechanism, and the other is the non-interference principle. A lesser important norm which is a consequence of these two principles is that all of ASEAN decisions are supposed to be non-binding.
ASEAN, in other words, is essentially a loose and informal network of countries in the region. It doesn’t have a charter. Despite its strong reputation in international and regional diplomacy, it could not have representatives in international organizations, like the United Nations, in the absence of a charter.
This has been the way ASEAN was designed from its inception in 1967, and by and large, this has allowed ASEAN to function, develop and expand quite effectively.
This informality was the only way for the five original founding members – Indonesia, Malaysia, the Philippines, Singapore and Thailand – to come together and overcome the mutual suspicions that prevailed across the region at the time of ASEAN’s founding.
Remember, we are talking about the 1960s when the region was still filled with wars, conflicts and tensions. Indonesia had just ended the “confrontation” with Malaysia (and to a lesser extent Singapore). The Vietnam War was still raging, and Southeast Asia, like the rest of the world, was being pulled apart by the Cold War giants. These countries were largely poor as they just came out of centuries of European colonialism.
It took the foresight of foreign ministers of the five member countries to set out a vision for a peaceful, stable and prosperous Southeast Asia.
They viewed that countries in the region would not be able to develop their economy, thus build prosperity for their people, if the region continued to be engulfed by endless bloody wars, conflicts and tensions. The fact that the five original members eventually became Asian economic tigers (while their Indochinese neighbors were not) in the 1990s owes in large part to this vision of peace and stable ASEAN.
In the Cold War context, ASEAN’s largely pro-United States regimes came to be seen as bulwark against the Indochinese communist states. But politically, the ASEAN vision has been to secure peace and stability for the region, and as free as possible from the Cold War political power play. One can see consistency in this through the various important documents adopted through all these years, including:
- The Bangkok Declaration, 1976
- The Zone of Peace, Freedom and Neutrality Treaty, 1971
- The Bali Concord, 1976
- The Treaty of Amity and Cooperation, 1976
- The Treaty of Southeast Asia Nuclear Weapons-Free Zone, 1995
- The Bali concord II, 2003
The essence of all these treaties and documents is to establish a more peaceful Southeast Asia, a precondition to any economic development. But over the years, ASEAN diplomacy gained international recognition that its meetings expanded to include other players outside the region, and eventually they expanded their agenda of discussion.
ASEAN’s greatest achievements are in fact in its regional and international diplomacy. Over the years, the ASEAN foreign ministers meeting expanded to include, initially its major trading partners like Japan, the United States, the European Union, Canada, Australia, New Zealand, and later on South Korea, China, India and Russia.
By the mid-1980s, the ASEAN foreign ministers meeting has become an important diplomatic event with foreign ministers from the group as well as its main trading partners coming together every year to different capitals of ASEAN.
In 1994, they launched the ASEAN Regional Forum that allowed the participants, ASEAN and its partners, to discuss political and security issues. ARF to date is still the only forum in Asia that addresses regional as well as international political and security issues. It is also a forum that brings together old nemeses in Asia like China and Japan, and to a lesser extent, China and South Korea.
Critics may dismiss these ASEAN meetings as nothing more than talking shops, but considering how peaceful southeast Asia has been, and considering how ASEAN countries have developed and prospered under this stable and peaceful environment, these meetings have been important talking shops. They are part of what is now popularly called confidence building measures.
ASEAN also played a decisive role in bringing about peace in Cambodia (including the withdrawal of Vietnam forces). And ASEAN diplomacy helped to defuse tensions in the South China Sea where seven countries, including China, have overlapping territorial claims.
In 1996, ASEAN decided that their leaders should also be more involved in the evolution of the group and the region. The annual ASEAN Summit (initially they called it an “informal summit” although everyone turns up in suit and ties) thus began to supplement and to endorse the works of their foreign and economic ministers.
But it was not until 1999 that a unified Southeast Asian was forged. Brunei had joined in 1984, and it was followed by Vietnam in 1995, Laos and Myanmar in 1997, and Cambodia was the last to join in 1999.
Thus the vision of bringing all 10 countries in Southeast Asian under one organization was realized just before the turn of the millennium.
But any progress beyond this point was harder to achieve for several reasons:
The first was that the Asian financial crisis in 1997 severely dented the economies of the Asian tigers like Thailand, Malaysia, Indonesia, and to a lesser extent the Philippines and Singapore. This meant that most countries became more focused with their own internal problems as ASEAN had just expanded.
This is true for Indonesia, which also underwent a political turmoil with the collapse of the Soeharto regime in 1998. While Indonesia grapples with leadership issues, ASEAN became practically leader-less. It has been an unwritten agreement in ASEAN that the group should be led by its largest member, which is Indonesia. At any rate, ASEAN could not have moved forward when its largest member is still sorting out its domestic problems.
The second is that the expansion into 10 members puts the ASEAN Way to a severe test. Previously, getting consensus from six like-minded members was relatively easy. But getting a consensus from an expanded group of 0 members, with newcomers having different ideologies and different priorities, the ASEAN way of doing things have become too cumbersome and too slow.
The external factors have also drastically changed at the turn of the millennium. While Southeast Asian economies stagnated or contracted during the Asian financial crisis, China’s economic growth rate picked up the pace, drawing in the bulk of foreign direct investment, somewhat at the expense of Southeast Asian countries. It became clear then, and clearer now with India also rapidly catching up, that ASEAN member countries can only survive the increasingly fierce global competition as one entity, rather as an individual country. But to face up the competition, ASEAN can no longer maintain its old way of doing things.
The third is the inclusion of Myanmar in the group, which raised objections from ASEAN’s long time partners in the West because of concerns at Yangon’s appalling human rights records. Very often, the Myanmar question took a lot of time and resources in ASEAN’s meeting with its partners in the West, with ASEAN vehemently defending its constructive engagement policy.
So it was at the turn of the millennium that ASEAN found that not only the challenges facing the group had grown bigger and more complex, but that its way of doing things, the well tested “ASEAN Way” and the key to its success in the past, no longer provided the answers to its problems as it has done in the past. The ASEAN Way has become part of the problem, and no longer part of the solution.
Externally, the world had changed, and when people talked about the economic miracles, they no longer talked about ASEAN, but they were referring more to China, and to a lesser extent India.
Internally, ASEAN faced big challenges after the inclusion of Vietnam, Myanman, Laos and Cambodia towards the end of the 1990s, four countries that could not have been more different from the other six ASEAN members in terms of their economic development as well as in their political outlook.
The six members have embraced market liberal economic tenets and profited from the globalization of trade and investment in the 1990s. The last four members were just beginning to put their house in order.
ASEAN diplomacy had not lost its shine however. ASEAN meetings continued to attract major players, and the ASEAN summit also regularly brings leaders from China, Japan and South Korea. The phrase ASEAN Plus Three, or 10+3, refers to the regular meetings that bring the ASEAN 10 with the three Asian economic giants have as they try to integrate their economies closer.
THE PATH TO AN ASEAN COMMUNITY
It was not until 2003/2004, when Indonesia took over the ASEAN chairmanship, that it put forward a bold proposal for the creation of an ASEAN community, an idea that was adapted in a document known as the Bali Concord II. This envisioned Southeast Asian community, to be achieved in 2020, would be built upon three pillars: Political and security community, economic community, and socio-cultural community.
ASEAN officials never pretended that this community would be anything like the European Union. Having raised so much hopes and hypes with this vision of Southeast Asia, the officials unfortunately went to great lengths to dismiss any similarity with the European processes. While the path to a community will be different, at the very least, the notion of what constitutes a community must be the same. And ASEAN can learn a lot from the community building process that Europe went through.
This was not the case initially, a gross error that ASEAN fortunately realized quickly and tries to put it right.
Try to forge a community out of 10 countries with different norms and values, and one can immediately see the fallacy of this proposal. ASEAN 10 comprises new democracies and quasi-democracies like Indonesia, the Philippines, Singapore, Malaysia and Thailand, and controlled societies like Vietnam, Cambodia and Laos, an absolute monarchy in Brunei, and one of the most repressive military regime in the world in Myanmar.
Europe may have been made up of different political systems, but the original members of the EU shared some basic norms and values, especially with regards to individual freedoms and democracy. Although larger in number, it was probably easier to forge a community out of like-minded people in Europe than is the case in Southeast Asia. Former members of the Soviet bloc, for example, have had to satisfy some minimum norms and values before they were admitted to the union.
Without a common standard on managing the states, it would be difficult for ASEAN to move ahead in building a community. Myanmar must change its ways, and allow for greater freedom of expression for its people and greater respects for basic human rights, to bring the nation on par with most of the rest of Southeast Asia. Most other countries in ASEAN too still have issues that they need to resolve to make them part of this emerging viable community.
There has been some integration of the countries in ASEAN during the course of its 40 years. This has been led mostly by the business communities. They were driven not so much by a sense of a community as by profit. While the economies are more integrated than before, it is going to take a lot more for ASEAN to turn the 10 countries into one single community.
ASEAN leaders fully realized the challenges they were facing and in 2005 commissioned a group of eminent persons to draw up the principles guiding the ASEAN charter, asking the group to come up with nothing short of “bold and visionary” proposals.
The eminent persons group did come out with some bold proposals, including the provision on human rights that member countries must observe, a provision whereby the principle of non-interference can be waived, and a provision on the use of voting in decision making mechanism for all but the most fundamental issues.
Based on these proposals, ASEAN bureaucrats have been working hard to draft the charter. Inevitably, in their hands, some of the more bold proposals made by the eminent persons have been tone down or even watered down completely.
A final draft of the charter will be submitted to the ASEAN leaders in their summit in Singapore.
Endorsement of the ASEAN Charter by the leaders in Singapore in November will be a major milestone for the regional organization. It is however just the beginning, a statement of intention by member countries that their futures are somewhat bound together through the creation of this single community.
It will take a lot more for ASEAN, and going by the European Union experience, a long time before this vision of one single community will be realized. The 2020 target may seem rather ambitious given the experience of Europe as well as the internal and external challenges that ASEAN countries have to deal with.
It is not clear how far ASEAN members will comply with the charter’s stipulation on human rights and democratic principles. This is like asking for a regime change in Myanmar, something that is not likely to happen anytime soon. But other countries also have to make amends to their ways of running their country and managing their peoples.
Having shared norms and values are probably the most important and difficult aspect of the community-building process in ASEAN. Once this is overcome, then ASEAN can talk about building an ASEAN identity, one in which the 500 million people populating the region can accept and feel proud of. Again, this will be a very lengthy process. ASEAN leaders must now go to the grassroots and bring the people into the process. No longer can ASEAN afford to remain the talk shop forum it has been.
The charter, even in its present form after being watered down by bureaucrats, is still an important document that will shape the kind of community that emerge out of these 10 countries.
In the past, because of its informality, ASEAN depended largely on the personalities of the people involved. Soeharto, Lee Kwan Yew and Goh Chock Tong, and Mahathir Mohamad were among the personalities that gave ASEAN a familiar face. They were able to do that because they ruled their respective countries for long. They, and their foreign ministers, were the driving forceS behind the success of ASEAN.
ASEAN countries today are led by younger generation of people. Their relations will remain cordial but not likely to be as close as the ones forged by their predecessors. Theirs are likely to be more business-like. With more countries having free elections, some of these leaders will only serve one term in office. They will not have the luxury of building close relations the way Soeharto, Lee and Mahathir managed their relationships.
The presence of a charter that governs relations between states is therefore all the more important in the present situation. ASEAN cannot depend only on the personality of its leaders. Whether ASEAN make it or not to become a community will ultimately rest on their shoulders.
International Conference on
„Fighting Terrorism for World Security
and Critical Infrastructure Protection”
to the Session on „Security and Stability in the Middle East and North Africa”
Bucharest, June 2nd, 2016 – 2.30 p.m.
Distinguished guests and members of the academic community,
Ladies and Gentleman,
At the beginning, allow me to congratulate the organizers for convening this Conference dedicated to fighting against terrorism, a timely event since the globalization of terrorism is an undeniable reality and a threat to international security.
It is my firm belief that the responsibility for confronting this phenomenon lies with all of us: governments, opinion making leaders, civil society, academic and media circles around the world.
In this sense, the foreign policy dimension is an important instrument in preventing and combating violent extremism and terrorism, ensuring a higher degree of international cooperation and the coherence of the collective efforts against this plague.
The recent terrorist attacks in so many places in Europe and beyond indicate that it is high time to strengthen international cooperation, both at European and global level. Only in the last days we have had to cope with terrifying news about two new terrorist attacks: in Mogadiscio, Somalia, where 20 lives were curbed by an attack claimed by Al Shabaab terrorist movement, and in Mali, where Al Qaida in Islamic Maghreb claimed an attack against the UN peace-keepers, resulted in four victims. I think you all will join me in firmly condemning these terrorist acts and in expressing our solidarity with the victims’ families. In this sad context, I would also like to reiterate Romania’s unwavering support for the fight against terrorism, in all its forms.
I was asked to speak today about a very important dimension of Romania’s foreign policy that is its relations with countries in Middle East and North Africa and the security situation in this region.
It is a common fact that Romania has good relations with all countries in Middle East and North Africa. This is both the result of half of century cooperation during the Cold War times, and the product of constant and deliberate policy approaches of different Romanian governments in the post-1989 period.
In fact, geography teaches us that the two closest areas outside Europe to Romania are practically bordering the Eastern and Southern shores of the Mediterranean. These areas have a great economic potential – however, not fully explored by both sides – and this is why the highest figures in the Romanian foreign trade outside the Euro-Atlantic area could be found precisely in the relations with the Middle Eastern and North African countries (at the end of 2015, the trade volume was close to 5 billion US dollars).
The economy cannot work in the absence of human contacts and exchanges. Here again, one can identify the very existence of a pattern of cooperation, which refers to the educational field. Many thousands of youngsters from Middle East and North Africa have followed the Romanian higher education system, and this could be seen as a solid form of Romania’s response to those countries quest for development.
These specific forms of mutually beneficial interaction are the natural corollary of traditional and solid political relations. It is now obvious that political cooperation between Romania and the MENA countries does not depend on the ideological profile of successive governments in Romania and in these areas. That is why the level and pace of Romania’s political dialogue with MENA countries steadily developed over the last decades, with the Heads of State and Government of Romania visiting many of the MENA countries, whilst the Romanian foreign minister met practically with all our partners in the region.
Having in mind that Romania's relations with the Middle Eastern and North African states represent important components of the Romanian foreign policy, the new European and Euro-Atlantic status of Romania representsan additional capital towards the development of political dialogue, economic cooperation and human exchanges with our MENA partners.
With a solid record of cooperation with MENA countries, Romania is legitimately concerned with each and every development that could represent a threat to security and stability of the region.
In fact, the region is riddled with old and newly developed conflicts.
- We see that expectations for progress in the Israeli-Arab conflict remain constantly unfulfilled. It is in fact a continuous standstill which does not favour the Peace Process in this very sensitive region.
Romania strongly supports the legitimate initiatives of the Quartet and its Road Map „vision of two states – the Israeli and the Palestinian ones – living side by side in peace and security”.
In our view, it is essential that every decision in the Peace Process is adopted through negotiations, so that the Israeli legitimate security needs and the Palestinian aspiration for statehood are carefully and adequately addressed. We are ready to take part and actively support EU’s diplomatic efforts to restore an environment of trust between the two parties, essential for the resumption of meaningful peace negotiations.
- As for the new conflicts, the multiplication of political, security and strategic challenges rest with the emergence of a new wave of terrorism. The proliferation of radical Islamic movements and the emergence of new groups, such as the so-called “Islamic State”, lead to an enhanced terrorist threat. DAESH represents a new breed of terrorism, which threatens to destabilize the entire Middle East. DAESH is a major threat for the very existence of Iraq and Syria, but it goes beyond these two countries, and therefore represents a major challenge to international order as a whole.
If we add the already existing terrorist threat represented by Al Qaida, and the activism of its regional branch in Maghreb (Al Qaida in Islamic Maghreb) and in the Arabian Peninsula, and of the Al Shabaab terrorist movement in the Horn of Africa, one could easily understand the destabilizing factors that are in action in our neighborhood.
The terrorist movements – and mainly DAESH – made a profit of the fragility of institutions in countries where the Arab Spring nourished the hopes for democratic change. In different ways, Syria, Iraq, Libya and Tunisia were confronted in recent years with the scourge of terrorism, and the consequences were dire.
In Syria, we witness an acute crisis. In post-2011 Syria, as in many other cases in the past, the innocent civilian population was often the victim of harsh confrontations between the Government and the opposition forces, while a long list of massacres have triggered the rage of the international community.
What could be the solution in Syria? We do not have too many options. Naturally we favour a political solution under a Syrian-led transition process and based on all Syrian parties’ cooperation, with the support of the United Nations. A good outcome of the efforts deployed by the Syria International Support Group (SISG) is the best way to help UN reach a solution as soon as possible.
In Iraq, situation on the ground has evolved, with the campaign to combat DAESH registering an important success – such as in Tikrit and Ramadi – and leading to reducing by one third the territory controlled by the terrorist organization. Also, the risk of regional contagion was avoided, due to successful coordination and cooperation with Jordan and Lebanon.
We commend the efforts of the Government in Baghdad, in line with Romania’s constant support for Iraq’s unity, sovereignty and territorial integrity. Also, we need to increase our support for the state’s reconstruction process, including through mechanisms and tools of the EU-Iraq Partnership and Cooperation Agreement.
In Libya, we fully support the international endeavors in order to achieve the stabilization of the internal situation. We hope that the Government of National Agreement, led by Fayed al Sarraj, will be endorsed and supported by all the Libyan factions, in the nearest future. Therefore, we welcome the statement in Vienna in mid-May, as a solid basis for the continuation of the political process.
The establishment of new authorities is essential as DAESH has a stronghold in the Sirte area and is entrenching itself in the region. The continuation of the current political fragmentation is only benefitting terrorism and the organized crime in the region. Therefore, it is of paramount importance that the Government led by Mr. Sarraj will be able to lead the fight against DAESH as soon as possible.
In Yemen, we need to avoid the creation of a security vacuum, which could be exploited by terrorist groups acting in the region, such as Al-Qaeda or DAESH. We fully support the peace talks process hosted by Kuwait and welcome the recent encouraging declarations indicating an agreement of the two sides involved to form an inclusive government. In our opinion this is the best way to bring long-term stability to the country and to address the humanitarian crisis.
In Lebanon, there is growing need for assisting the Lebanese authorities to overcome the domestic hardships triggered by the regional effects of the Syrian crisis coupled with the outcomes of Daesh presence in Iraq. The stability, sovereignty and territorial integrity of Lebanon have crucial importance for the peace and stability of the entire Middle East region.
Lebanon is an example of diversity and tolerance for the region, but the long-lasting political deadlock generates vulnerability for the country and its institutions. Against this background, we encourage all policymakers in Lebanon to accelerate internal consultation processes for appointing the President. The establishment of a political stabile climate in Lebanon will lead to the improvement of the internal security situation.
In Tunisia,we commend the institutional building and the holding of free and fair elections. The Tunisian society succeeded in overcoming the inherent challenges of the transition to democracy, and the successful activity of the Tunisian Quartet, rewarded with a Nobel Prize, stands proof of this success. Nevertheless, Tunisian democracy needs to be supported and, while bearing in mind the constant threat of terrorism, we commend the activity of authorities for containing this threat.
Regarding Iran, we consider thatthe declaration of the “Implementation Day” on 16 January 2016 was a major step forward in the implementation of Joint Comprehensive Plan of Action (JCPOA). In the end, this is a guarantee that Iran’s nuclear program will be exclusively used for peaceful purposes. The quality of the nuclear deal will be proven by its full implementation, based on a long term and open cooperation between Iran and IAEA.
We encourage Iran to keep working together with the other states in the region on confidence-building measures, and to step up bilateral cooperation in order to gradually remove the current sensitivities and other possible misunderstandings.
Foreign Minister Lazăr Comănescu paid a visit to Tehran last March, accompanied by a powerful business delegation, with a view to give a boost to the already traditional relationship between Romania and Iran. It was an excellent visit which offered interesting opportunities to explore new ways for our two countries to get closer after the lifting of sanctions regime. We are convinced that this cooperation is mutually beneficial, and can pave the way for further developments both on bilateral exchanges, and on approaches to regional security and stability, thus contributing to the strengthening of the EU-Iran relationship.
To resume, the endeavours of the Romanian leadership currently follow several directions:
- To work resolutely towards preventing and countering terrorism both at the national level and in the framework of international bodies: at the EU level, but also at the UN, the OSCE, NATO and the Council of Europe. Romania advocated for a coordinated, comprehensive and urgent response, while addressing not only the consequences, but also the root causes of terrorism.
Preventing radicalization and attraction to violent extremism and recruitment for terrorism is the key element for addressing the plague of terrorism on the long run. The focus should be on improving the social-economic conditions of people belonging to communities most vulnerable to radicalization and recruitment for violent extremism and terrorism.
- To support the strengthening of dialogue with moderate Muslim states and populations, in order to secure a better mutual understanding and to avoid radicalization.
In this framework, the need to deny space to IS/Daesh, other jihadists groups propaganda and to counter its narrative on the global communications channels is of utmost urgency, not only to avert attraction for the would-be foreign terrorist fighters, but also for preventing further counter-manifestations and reactions of violent extremism, xenophobia and racism in Europe.
- To stress the growing importance of the nexus between security and sustainable development in addressing not only the issue of violent extremism and terrorism, but also for curbing the pressing challenges associated to it, such as illicit trafficking of arms, drugs and human beings.
(III. Final remarks)
I will conclude my remarks by stressing that Romania, as a country which returned to democracy 25 years ago after long decades of authoritarian regimes, has an appropriate understanding of the problems most of the MENA countries are currently confronted with.
It also has the readiness to share its experience of transition process and to participate in the post-conflict reconstruction effort in the region, based on the well-known saying that “a friend in need is a friend indeed”.
Thank you for your attention.
Please see the enclosed invitation on behalf of His Excellency Mr. Tran Thanh Cong, the Ambassador of the Socialist Republic of Viet Nam, in his capacity as the Rotating Chairperson of the ASEAN Committee in Bucharest, that kindly requests your company and spouse to the ‘ASEAN DAY FESTIVAL’ on Thursday, 4th August 2016, from 18.30 to 20.30 hrs at the courtyard premises of the Embassy of Indonesia, No. 10, Gina Patrichi (formerly Orlando) St., Sector 1, Bucharest.
In the Name of God
A Short Glance at the Economic Situation of the Islamic Republic of Iran
Mr. Gheorghe Hurduzeu, Dean of the Faculty for Economic International Relations,
Ladies and Gentlemen,
First, I have to express my appreciation to the organizers, especially the Dean of Economic International Relations of ASE University, for arranging this event. I must mention that lifting Iran economic sanctions not only opens the door of unrivalled economic opportunities to the world, but also provides a unique chance to combat the economic challenges of the region and the world, which in turn, reduces the political and social tensions.
Iran’s economic growth, with its population of 80 million, big and intact market, various profound resources, educated and suitable labor force, geographical and climatic diversity, closeness to 300-million market of Caspian Sea countries, appropriate infrastructures as well as desire and willingness for growth and dynamism, determination to create trade and manufacturing networks and clusters and efforts to find a place in the global supply chain of goods and services, along with employing foreign capital, will not only result in the prosperity of Islamic Republic of Iran and its investment and trade partners but also help return of stability and peace to the turbulent Middle East region, through deeper and wider links which in turn lead to job creation, poverty alleviation and prosperity.
The great success of Iran’s Government in diplomacy and its spillovers to the economy, including sharp fall of inflation from 45 to around 13 percent in the course of two years and under the most severe embargos, was widely welcomed and could resume trust and confidence of international investors to enter Iran’s market. Iran’s approach to long-term bilateral and multilateral cooperation and emphasize on the quality of investments reinforces this trust and confidence.
In this regard, the country of Romania, which in the eyes of the Iranians has always been associated with high-quality and trustworthy products will have a considerable chance to enter Iranian market and establish and renew the long-run partnerships.
Ladies and Gentlemen,
Now, after the decade-long unjust sanctions, the combination of the demography, unused capacities and profound natural endowments, among many others, sets the stage for a big economic leap.
Indicators such as: a territory of 1,648,195 square kilometers, and a large market of 80 million people, that is the second largest population of the Middle East, which is mainly young population with a high percentage of university education, and whose neighbors are land-locked countries that may need to produce or consume; rich energy and mineral resources, various industries such as oil and gas, refinery, petrochemicals and a long range of infrastructures: road, railway, air transport and their relevant industries, construction and development of airports, small and medium industries; these are some of the details of Iran’s economy.
In addition to the resources and the potential, from the geographical point of view, Iran is located in one of the world’s most sensitive geo-economic areas. In terms of natural resources, Iran has the world’s fourth largest known oil reserves, and the world’s second largest natural gas reserves. Also, Iran has the first global rank in zinc resources, second global rank in the copper field, ninth global rank in iron mines, tenth global rank in uranium mines, and eleventh global rank in plumb mines. In other words, Iran has 1% of the world’s population, but more than 7% of the world’s resources. In the field of basic industrial products such as cement and steel, Iran has a very good global rank. The cement production capacity in 2015 was approximately 78 million tons, and the steel production capacity was approximately 40 million tons. The Islamic Republic of Iran, in addition to its capabilities in the oil and natural gas field, as well as the possibilities of connection and transportation, has also capabilities in the fields of science, industry, aerospace, nanotechnology, medicine, energy, construction of dams, power plants, and agriculture, are the opportunities available to Romanian investors and entrepreneurs.
We’ve started a tireless effort to streamline and ease doing business and are removing many barriers to investment and trade. Now collaboration among the relevant decision-making authorities and stakeholders helps achieve that goal. The “Law on removing Barriers to Production”, ratified last year, aims to create a domestic competitive environment for production in a way that the decisions are made based on economic concepts and market rules. The macroeconomic policies, known as “the Resilient Economy Policies” which were notified last year by the Supreme Leader, are centering on enhancing productivity and effective international cooperation, high-quality, stable and sustainable domestic products and investments, improving productivity and reducing red tapes which paint a bright picture for foreign investors especially the Romanian practitioners.
The Islamic Republic of Iran’s Foreign Investment Promotion and Protection Act, known as FIPPA, offers extensive support to the foreign investors in Iran, whom are granted the same rights as the Iranian citizens, such as:
- Guaranteed compensation payment in case of nationalization and expropriation;
- Guaranteed payment of damages due to laws or government regulations;
- Guaranteed free transfer of foreign currency;
- Possibility of one hundred per cent foreign investment in investment plans;
- Possibility of land ownership in the name of the company registered in Iran;
- Providing facilities and issuance of residence permit for three years in Iran for foreign investors, managers, experts and their first degree relatives, and the possibility of visa renewals.
Foreign investments in the free and special economic zones of the Islamic Republic of Iran are exempt from taxation for a period of 20 years.
Drawing on our experience, our main criteria for investments, either foreign or domestic, are quality and productivity, while having access to foreign capital merely based on financial terms and conditions such as interest rates, which target short-run horizon, is not the benchmark any further.
Ladies and Gentlemen,
Looking from a different view, the economy of the Islamic Republic of Iran has significant importance as below:
Nowadays, the externalities spread to the farthest regions. A visible example is the climate change. Unfortunately, the chaos and turbulence in the Middle East region, in Syria, Iraq, Palestine, Yemen and Afghanistan, is claiming lives of innocent civilians, devastates infrastructures, squanders resources and leaves long-lasting harmful impacts on the people of these regions and the globe. We should always remain concerned when our neighbor’s home is on fire. Just now, some of the negative consequences of insecurities have spread to other parts of the world especially in Europe, so immediate action is needed to curb the harm. A big portion of these problems stems from weak economic conditions, so a strong economic driving engine in the region shall boost these weak economies and help them out of this turmoil.
Islamic Republic of Iran through its development assistance to Afghanistan and the active role of Iranian firms in Iraq, has showed that considers economic and social security of the region and that of the world as intermingled, and has the potential to play a crucial role in boosting the regional and global economic conditions. Now that the sanctions have been relaxed, the world economy can benefit from the potentials in Iran’s economy.
The Geographic location of Iran puts it in the cross-roads of east-west and north-south. Expanding Iran’s road, rail and air fleets and improving transportation terminals, stations and ports, require huge investments which in turn earn substantial revenues. The networks provide secure and cheap connecting facilities for the CIS countries, Russia and Afghanistan to trade through open waters of Persian Gulf in the South of Iran.
There is great appetite in Iran’s market for low-consuming, high-standard cars and motorcycles, power plants (particularly renewable energy), improving agricultural processing and production (in particular greenhouse production), packaging and many others which can be implemented by the Romanian investors.
The growing number of tourists and connecting flights through Iran is another evidence of profitable investments in air transportation and its relevant facilities. Increase of domestic needs and expansion of regional trade highlights the importance of rail and road transportation. Just now, developments of rail and road transportation, and the facilities which require huge investments, are on top of the agenda of the government.
Services can be the other sector for cooperation. It is foreseeable that financial transactions of Iranian banks take a leap. This needs infrastructures and arrangements with international banking system. Regarding insurance, just draw your attention to the size of Iranian Oil Tanker Company which stands the 11th in the world and its insurance premium make a very big amount. Since Iran is having a bank-based economy, there is need to enhance and expand the capital market and introduce new instruments to meet the long-term needs of the companies. Romanian firms and institutions can help in these fields as well.
Ladies and Gentlemen,
Let me give you factual information on the status of energy in Iran. As I mentioned above, my country is also unique having almost all sources of energy, fossil fuels mainly oil and gas, great potential of renewable energy especially wind and solar and nuclear power plant, based on its diversified energy policy.
Iran holds the world's fourth-largest proved crude oil reserves and the world's second-largest natural gas reserves and totally, the first oil and gas reserves in the world. Iran holds almost 10 percent of the world's crude oil reserves and 13 percent of OPEC reserves. About 70% of Iran's crude oil reserves are located onshore, with the remainder mostly located offshore in the Persian Gulf. Iran also holds proved reserves in the Caspian Sea, although exploration has been at a standstill.
Islamic Republic of Iran also ranks among the world's top 10 oil producers and top 5 natural gas producers. Iran produced almost 3.6 million barrels per day of which 3 barrels per day was crude oil and the remainder was condensate and natural gas plant liquids and an estimated 5.7 trillion cubic feet of dry natural gas in 2015.
The state-owned National Iranian Oil Company (NIOC) is responsible for all upstream oil and natural gas projects. The Iranian constitution prohibits foreign or private ownership of natural resources, but the international oil companies (IOCs) can participate in the exploration and development phases through new Iranian Petroleum Contract called as IPC. In this context, Iran is planning to change its oil contract model to allow IOCs to participate in all phases of an upstream project, including production as product sharing model and downstream. These types of contracts in oil and gas industry will be long-term and the expenses of the foreign investor in the projects will be revised annually for securing the benefit of the investors. These projects including 55 projects with the value of one hundred billion Dollars in oil and gas upstream industry and 70 billion Dollars in petrochemical industry;
So, the huge opportunities are available to foreign investors in upstream and downstream sectors, in petrochemicals and refineries. Unfortunately the energy intensity in Iran is very high which reflects inefficient energy consumption in industry and agriculture, by cars and households. This waste of energy has many negative externalities: air, soil and water pollution, heart diseases and so on.
Based on the large-scale plans, the dependence of annual budget on oil revenues should terminate in near future, so we should move from selling crude oil towards value added products, hence there is need to boost production of petrochemicals and improve our refineries to produce high-quality exportable products and finding an appropriate position in the global value chain.
I am sure you know about the progress Iran has made in peaceful nuclear energy, in nuclear medicine, nuclear agriculture and nuclear power plants. We would like to benefit from your knowledge, in conformity with the IAEA regulations, to expand our knowledge in the above-mentioned area and enhance security and safety of our nuclear facilities.
During the brutal sanctions, the young Iranian scientists could take big steps forward in nanotechnology. This is a new field in the world and concerning the types of expertise and the people involved, I believe both countries will deeply benefit from mutual cooperation.
I conclude by highlighting the determination of the Government of the Islamic Republic of Iran on downsizing the government and enhancing private sector. The government encourages private sectors of the two countries to have face to face talks to help expand the non-public economy and assist the government to delegate the non-sovereign activities.
As you may be aware, the most important project between the Islamic Republic of Iran and EU, especially Romania, in long-term period is participating to the natural security to diversify the source of natural gas of the European Union. The other bilateral projects between two countries will be as follows:
- Crude oil and oil derivatives export to Romania (as you may be aware the first shipment of 1 million barrels crude oil will be soon delivered to Romania Lukoil Company);
- Oil and Gas Industries Equipment Trade;
- Petrochemical Products Trade;
- Direct or Joint Investment in energy sectors of two countries.
Finally, I must mention that the Islamic Republic of Iran and the European Union have many capabilities to develop economic and commercial cooperation. These capabilities, due to political considerations, have remained unused. Both Islamic Republic of Iran and European countries can use these economical capabilities for developing bilateral relations. The European countries have been for years some of the major trading partners of the Islamic Republic of Iran, and this potential still exists and it is reversible. According to Eurostat Statistics in 2016, the total volume of trade between Iran and EU was the equivalent of 7.7 billion Euros in 2015, with an increase of approximately 25% rather than 2014 which it was around 6.2 billion Euros. In 2015, The EU exports to Iran reaching 6.4 billion Euros, while the EU imports from Iran reached 1.3 billion Euros.
Thank you for your attention and I wish you all the best.
Menus for the Roundtable on the Korean Peninsula Situation
16th March, 2015 (Intercontinental Hotel, Bucharest)
- Appetizer: Tuna Carpaccio with lemon cream and rucola-herb salad
- Main dish: Roasted sea bass with Antiboise sauce and roasted potatoes
- Dessert:Pana cotta with currants
- Appetizer: Asian marinated shrimps
- Main dish: Pork tenderloin with chimichurri and Mexican rice
- Dessert: Caramelized pineapple with rum and mint, tangerine sorbet
- Appetizer: Lobster bisque with saffron cream fraiche
- Main dish: Beef Tournedos Rossini
- Dessert: Strawberries crème brulée
Agenda For The Roundtable Session On the Current Issues regarding the Korean Peninsula 1. Date and Time: 11:30-14:00, Monday, March 16th , 2015 2. Venue: “Hora” Meeting Room (21st Floor), Intercontinental Hotel 3. Tentative Program 11:30 -11:40 Registrations 11:45 - 12:05 Presentation by Mr. Kim Yonghyon, Deputy Director-General, North Korean Nuclear Affairs Bureau, Ministry of Foreign Affairs (MOFA) 12:05 - 14:00 Roundtable session over lunch
Fw: Correction regarding the date - Invitation to the International Conference European Democracy from West to East
- gheorghe savuica <email@example.com>
Jan 8, 2015 at 4:12 PM
----- Forwarded Message -----
From: Fundatia SOLIDARITATEA <firstname.lastname@example.org>
Sent: Thursday, January 8, 2015 1:40 AM
Subject: Correction regarding the date - Invitation to the International Conference European Democracy from West to East
We apologize for an error due to techno-drafting. The conference will take place Saturday, 24 January 2015.
Please find attached the program of the event. In short notice we will announce the list with the speakers for the Conference.
Comitetul de Organizare
Fundația Solidaritatea Culturală Română Ars XXI
ASEAN COMMITTEE IN BUCHAREST
ASEAN DAY FESTIVAL
(an outdoor event)
And has the honor to request the pleasure of your company and spouse
On Thursday, August 4th, 2016,
At 18.30 – 20.30
At the premises of the Embassy of the Republic of Indonesia
10, Strada Gina Patrichi, Sector 1, Bucharest
Japonia 21 mai 2015
“The Role and the Place of Japan in the International Economy”
Ladies and Gentlemen,
Today I am very pleased and honoured to be given this opportunity to speak to you, the students of the prestigious Bucharest University of Economic Studies, about the present condition of the Japanese economy and its challenges.
[Slide2: Japan Basic Information]
First, let me give you some basic figures about my country – Japan’s population is approximately 120 million people, almost 6 times as large as that of Romania. The total land surface is approximately 380,000 square kilometers, 1.5 times as big as that of Romania. Looking at the economy, the GDP is 4.9 trillion USD (nominal, 2013), 25 times as large as that of Romania, while the per capita GNI of Japan is 46,000 USD (World Bank Country Data), approximately 5 times as high as that of Romania.
[Slide3: Japan Basic Information]
- Japan’s place in the world economy
(1) Now, looking at Japan from the point of view of its economic relations with the world, first of all, based on UN data, 2013, the total value of world trade was 18.45 trillion USD when expressed as total exports. Of that, Japan’s total exports in 2013 amounted to 710 billion USD, or approximately 3.8% of total world exports. (UN data)
Japan’s GDP in 2013 was 4.9 trillion USD, which represents 6.5% of total world GDP. US’s GDP is 22% of world GDP, China’s is 12% and Japan follows in third place. (UN data)
When we take a look back at how things stood 15 years ago, in the year 2000, the US, the world’s largest economy, accounted for 30% of the world GDP, while Japan was in second place with 14%. At that time, China’s GDP was 3.6% of world GDP, while the EU as a whole accounted for 26.4%. (World Bank data)
The population of Japan is approximately 120 million, smaller than the population of the US (310 million people) or that of China (1.35 billion people) (World Bank data), but, until 2010, when it was overtaken by a fast-rising China, Japan had had, for a very long time, the second largest GDP in the world. Japan has now the third biggest GDP in the world, but in 2013, it was still the second largest contributor to the United Nations Regular Budget, having a share of 10% after the United States of America (22%), and being followed by Germany (7.1%), France (5.5%) and the UK (5.1%). These are the top five most important contributors to the UN Regular Budget. (data from the Ministry of Foreign Affairs of Japan)
Next, let’s take a look at Japan’s position in the world from the point of view of foreign investments. First of all, in 2013, the world foreign direct investments (FDI) were 1.41 trillion USD. USA’s foreign investments were worth 338 billion USD, the EU’s was 250 billion USD, China’s was 100 billion USD (without Hong Kong and Taiwan), while Japan’s was 135 billion USD.
Recently, Japan has invested quite a lot overseas, having held the 2nd position in the world, after USA, in foreign direct investments over 2010-2013.
Thus, at the end of 2013, Japan’s accumulated foreign direct investments (by assets) went up to 1.1 trillion USD (JETRO data).
[Slide4: History of Economic Development]
(2) Talking a little about the history of Japan’s economic development, we can say that Japan had already been a prominent industrialized nation even before World War Two (WWII), but through the Second World War (WWII) the country lost almost all its industrial production capabilities. After the war, if I am to compare the stages of development of Japan’s economy to the stages in someone’s life, I can say, first of all, that from the 1950s to the 60s Japan experienced its “fast-growing period of infancy”, when the country started to rebuild its economy and grow its industrial base at a fast pace, after having its entire industrial base destroyed in the war. In 1964 Japan hosted successfully the first Tokyo Olympic Games and started to operate the Shinkansen bullet train.
Secondly, from the 1970s to the 1980s Japan experienced its period of “bold adolescence”, when Japan’s exports grew rapidly and the country had a trade surplus every year, causing severe friction between Japan and its trade partners, in particular the US. In 1971, the first appreciation of the Japanese yen against the US dollar was decided and in 1973 the floating exchange rate scheme was finally introduced. That was the period in which the Japanese economy successfully overcame two oil shocks (1973 1nd 1979) and started growing considerably by enhancing energy efficiency and developing energy saving technology. It was also the period in which Japan started to actively make investments abroad with its strengthened yen.
Thirdly, between the 1990s and the 2000s, Japan experienced its period of “stormy youth”, with its ups and downs, represented by the economic and financial bubble and its burst. Good things come to an end, though, as the economy is also a living thing.
Let me explain this way. The trade surplus earned from exports accelerated the appreciation of the Japanese yen against the US dollar. It hit hard the export industry. For this reason the government implemented large scale fiscal as well as monetary relaxation policies, which injected surplus liquidity into the market. As a result banks started to lend money more easily and ultimately caused an “asset bubble” by speculation.&n