 Bonjour. Good morning. Welcome to this very early start this morning on the session on Asia, Asia's strengths and weaknesses. We have six very prominent experts, speakers to address us this morning. They come from a wide variety of background from government, from business, from think tanks, and I'm sure they have a lot to share with us. I would like in the very brief introductory remarks say that Asia presents both geo-economic and geopolitical challenges for the region and for the world, but at the same time Asia also opens up vast opportunities. We are on the cusp of an Asia century and I think the projections, economic projections have clearly shown that Asia is where growth will be in the century and that the vast potential that Asia has should be an opportunity for European companies to look at. It has been projected that U.S. growth of 2.5% and coupled with Asia's growth of 6.2% will imply that U.S. will have U.S. 400 billion growth a year, Asia will have U.S. 1,000 billion growth a year. What this means when we add it up all is that Asia will create a new Germany every four years. I think that's a major trend, a very major impact that many of us have not really taken into account. China will be able to generate sustained growth of 7 to 8% a year. The ASEAN countries will grow at 5 to 6%, Japan probably 3 to 4%, and overall for the next 3 to 4 years Asia would grow between 5 to 6%. However, I think many of us do not see Asia as a monolithic entity. Many people seem to think that it's one Asia and Asia is the same, but Asia is not. I think Asia is, like Charles Dickens put in his book, The Tale of Two Cities, a two Asia. We have one prosperous Asia that is growing very rapidly. We have also a poor Asia that is lagging behind, and I think these are some of the issues and challenges the panel will probably be speaking about. Before I hand over to the panel, let me very quickly summarize what I think would be the key issues facing Asia. I would say that these are the five I's that Asia has to confront, the issues of inequalities, issues of infrastructure development, inclusive growth, integration, and investments. These are the five I's, issues that Asia has to grapple with. Ladies and gentlemen, I now hand over to the panel. Each of the panelists will be given about seven minutes to make their initial presentations, and then we will have our open interactive discussion. In the first instance, I'd like to now invite our first speaker, Mr Bruno Lafond, Chairman and CEO of Lafarge. So good morning. Thank you very much. Lafarge is an international company with French origin, so we are the leader in cement manufacturing all over the world. And Asia is representing now 20% of our sales, and that was zero 20 years ago. And we are in most important countries of Asia present. You know that cement is a very local business, so when I travel to Asia and I do five to six trips a year to Asia for now 15 years, I'm seeing a very small circle because we are selling 200 kilometers around our plants, and it's in general not in the main city of the country. So I'm seeing many things that nobody never sees. And each time I'm meeting with our employees and our customers which are not living in five-star hotels and which are struggling. So I've seen many evolutions in the past. And so the first thing I want to confirm is that it's not one Asia. There are several places, many different places, starting with China, continuing with India, and even when you look at Indonesia, there is no one place in Indonesia. There are many, many different places. And therefore it's difficult to speak about overall weaknesses of Asia because it is so different. And I will just try to focus on the strengths I'm seeing in Asia and the strengths are not just situations but also dynamics which are very strong. For me, Asia is very similar to the rest of the world on several very, very basic things. Strong local cultures, like everywhere, but very strong and very local. Strong environmental challenges, and I'm speaking about industry, but environmental challenges are as strong in Asia as anywhere in the world. Strong weight of bureaucracy, so Asia is not, yes, there is no paradise on the bureaucracy and Asia is not a paradise. So there are differences between states, but it's the same, I would say, almost everywhere. What Asia also is almost sharing with, despite some differences, but in Asia, labor is cheap and energy is expensive. So that's something which is the only one economic assessment I will make. But what we see is that Asia is rising, as you said, and what is very interesting to see is the development of the cities in Asia. I think the most important trend in Asia, what's happening today, which is very strong and which is very well-managed, and especially probably better than in many other places in the world, is urbanization. Urbanization is very critical, it's happening very quickly, and it's an enormous challenge to which we are an important part because there is no city without concrete, and trying to innovate on concrete and to bring cities, housing for poor people and very big infrastructure requiring all the last innovations on concrete are exactly the type of challenge. Each time I'm landing in Calcutta, I'm enjoying the trip between the airport and the center of the city, and each year I've seen a change. I would say during the first five years there was not too many changes, but since five years there is a huge change. First year it was cleaner, second year you started to see cranes, third year you're starting to see, I don't know, a tramway or a highway, and the highway was done with cement bags at the beginning, at the end it was done with many other things, so it's a tremendous change and I think it's very important. So I think what is interesting is that Asia has a fabulous strength. So besides cities, I want to speak about the people. The people they share in Asia for me, first it's a learning population. They want to learn, they are eager to learn. We have 60,000 employees. We have a strong network, a lot of best practices everywhere they can access. The most hungry are the Asian people. The biggest number of access are coming from our people in Asia. And the last to get in has been European and Americans, but Asian has been first to try to learn, and that's what we see. The learning curve is extremely, education systems are excellent. I don't know who said that South Korea had the best education system in the world. And I think that's very promising. These people are optimistic. They believe in growth. All my discussions and I have a lot of meetings with employees and young employees are asking me, when do we do the next CAPEX, the next investments, the next growth? How do we become the biggest? And they are just dreaming to be the biggest because they are eager to grow. And they are ambitious, but at the same time they are pragmatic. I have seen them through the crisis they had. And I think during the crisis they have been also very, very pragmatic. I attended a group of Asian businessmen meeting. It was in Vietnam at the beginning of the financial crisis. And the way those very important people were looking at the crisis coming was very, very interesting for Western businessmen that I was. And the last point I want to say about the strength is the speed. The speed in Asia is different. And I would not differentiate one country to another. Of course they are not exactly the same in every sector and every place. But the speed is something fascinating in Asia. The speed with which people are able to mobilize themselves and also to achieve things is tremendous. So I think it's what I wanted to say about the strength. Of course we have the best and you can find the best in Asia. You can find the best companies. I've said you can find the best cities. You can start the best level of growth in living standards growth. I think in a lifetime you can raise your living standards by a thousand times. Of course it is not maybe the case in Japan, but I would speak about the average Asia. What I like also is the fact that all Asian societies are trying to implement the seven pillars. You know, free market economy, mastery of science and technology, meritocracy, pragmatism, culture of peace, role of law and education, which are all the things which are extremely good from a business point of view, you know, to develop a business. And I think that's also a very strong strength of Asia because there is a common will to progress and to learn about that. So it's very inspiring to my company. I learned a lot in Asia and I'm going to Asia not just to manage but to learn. And for me there are two questions. Will this generate a type of new global leadership, economic wise or culturally also political? And if yes, what will be the... And I'm very curious about the answers I could get on this question. What could be the values which are carried by Asia as a global? Because there is no leadership without values. So thank you. Thank you very much, Mr. LaFawn, for your perspective. You are probably one of the very few French businessmen that visits Asia regularly and hence you have got a very in-depth understanding of challenges and issues that Asia faces. May I now invite our next speaker, Mr. Narayanan, who is Governor of West Bengal but also the former National Security Advisor of India. Mr. Narayanan. It's a privilege to address this distinguished gathering and also to be with members of this very distinguished panel. Thank you, Mr. Monbriel for inviting me to the session. Just now, both the moderator, Mr. Michael Yeo and Mr. LaFawn talked of two Asias. I also would talk about two Asias but slightly differently. We have two Asias, both competing for space and attention. Economically, as we just heard from Mr. LaFawn, and I must say I'm so happy being a nation to hear what he had to say about Asia. Economically, we have a dynamic and to an extent integrating Asia. In security terms, however, there is another Asia that appears to most people dysfunctional, buffeted by powerful nationalism and prone to irredentism. As we all know, Asia's strength lies in its burgeoning economy. And I think this has been repeatedly referred to yesterday and even this morning. I would rather concentrate today on the so-called weaknesses of Asia rather than on its strengths because I think the strengths are obvious. The Asian Development Bank, for instance, has said by 2050 or even earlier, Asia will nearly double its share of the global GDP to 52%. 53% of Asia's trade is now conducted within the region itself. The over US dollar 19 trillion economy has now become an engine of growth. So that's obvious and lot more will be said on this during the course of this discussion. My point is that Asia's security, as compared to Asia's economic, appears anachronistic. And there are several reasons for this. The term Asia's weakness is, I think, maybe a little too strong. I would rather say that there are a lot of concerns and problems in Asia that lead to the possibilities of its weaknesses. Among the concerns to begin with are that Asia is embroiled in several territorial disputes. The long-standing border dispute between India and China is one. For another, there are many undetermined and contested claims regarding the sea. The most serious of these are those spurred by China's ever widening maritime claims in the South China and the East China Sea. The latest is China's designation of its Air Defense Identification Zone in the East China Sea, signaling that China wants to change the existing status quo. Third, China's constant assertion of its right to its historic waters confined within the nine dashed lines of Chinese claims has also its insistence that not only its self-defined core interests be acknowledged by other powers in the region, but they accept its preeminent position in this part of the world. These are the concerns some are real, some are perhaps perceived. But most importantly, Asia confronts numerous problems, many of which I think have long-term consequences and implications, and many will probably affect Europe and the rest of the world in the not too foreseeable future. First, there are problems arising from the rapid spread of fundamentalists, extremists, and radical ideas and beliefs. Across Asia, there is a resurgence of new radical outfits leading religious extremism. We heard a lot of this yesterday evening, and I would like to stress this point once again. I would like to underscore the fact that religion, ethnicity, asymmetric warfare techniques, politics of migration of populations across borders, demands for inclusive policies and elimination of inequality today have replaced all the previous isms that were there, and therefore we are facing a whole new host of problems present in Asia today, but likely to affect large parts of the world in the coming years. Religious, and religion and religious drive are, in a sense, the 1,000-pound gorilla in many of our drawing rooms in Asia today. Afghanistan, Pakistan, and Bangladesh. Apart from West Asian nations like Egypt, Syria and Tunisia and the Gulf Kingdoms are all wrestling today with the problem of containing hardline Islamist groups. In turn, and this is the frightening part, many are seeking a symmetrical support from units like the Hezbollah and the Al-Qaeda, depending on their predictions. We heard so much about Syria yesterday. All I have to say is that Syria confronts and alphabetic super-problems from the crumbling Free Syrian Army and ISIS, the Islamic State of Iraq and al-Sham to Jabhat al-Nusra and Ahar al-Sham to Zairan al-Ush's army of Islam, all battling for control. The specter of Iran and a violent Shia-Sunni conflict hovers in the background. Asymmetric warfare and terrorism constitute a grave threat across Asia. Both Afghanistan and Pakistan are saddled with a combination of state weakness and the presence of myriad terrorist groups. This is further compounded in Pakistan's case by their employment of terror groups as a strategic instrumentality to keep countries in its neighbourhood like India of balance. Also unsettling are some of the new army doctrines that Pakistan has revealed which stipulates disproportionate response to future wars. I think a mild euphemism for assorting to nuclear weapons and insulate the countries from its high-risk strategy of supporting jihadi terrorism. Unsettled conditions prevail in many other parts of south, southeast and east Asia. Myanmar, Indonesia and Sri Lanka are caught in a new cycle of strife involving religion, ethnicity and politics. The colour of Thailand's revolution and turmoil is a bit unclear but turmoil there certainly is. The Maldives faces strong possibilities of consolidation of Islamist forces. Nepal faces a constitutional gridlock. Sri Lanka confronts both the political as well as an ethnic crisis. China, Japan differences have greatly exacerbated the plate. India may be one of the more stable nations in the Asian region but while it does not face any existential threat externally or internally it is privy to many of the problems and issues that I have said just now. It is therefore a matter of concern for us that if such problems increase across the region we will also be badly affected in India. There are two other aspects of security which I think I need to stress here. One is the maritime and the other is the nuclear. Sea lanes of communication are critical important for Asian nations since almost 80 to 90% of all goods transported to and from Asia are by sea. Deep seabed mining has recently emerged as a strategic issue and is becoming increasingly confrontationist. Asian nations have become conscious of the strategic potential of the oceans and each of them are suitably positioning themselves particularly China and India. Strengthening their naval capabilities has the impact of leading to unintended consequences. Perhaps even more difficult are the presence of many nuclear states in this region. Some of these states do not have a well-defined nuclear doctrine or effective safety procedures. Some, like Pakistan, are enlarging the scope for use of nuclear weapons and experimenting with tactical nuclear missiles, signaling a shift in their strategy and raising the possibility of pre-delegation of nuclear weapons to battlefield commanders. I don't know when I wrote this. I thought if the Iran deal was on, Saudi Arabia itself may take a harder look at becoming a nuclear filament power. Before I conclude, I might add, concerns about Asia often centre on the possibility of a conflict between India and China, a consequence of the simultaneous rise in the same time frame of two countries living in close proximity to each other and both having venerable cultures. Both China and India discount this kind of rivalry. Nevertheless, there are concerns and these stem from the fact that in China's case, nationalism is often seen as the main driver of China's foreign and defence policies. And this is one of the periods where Chinese policymakers have raised the ante of nationalism and Chinese academics are busy making out a case for Chinese exceptionalism. Also, apart from China's rapidly growing military capabilities, China's constant refrain of continued competition within courts in the military domain raises concerns and hackles of nations in its vicinity. India issues a policy based solely on power relations. India's concerns vis-a-vis China are mainly the opaqueness of Chinese thought processes and the reasons given for China's action on India's periphery, including a resurgence of interest in areas on its southern and southwestern flanks has also the steps taken by China to augment its strength in provinces such as Tibet, Xinjiang and Yunnan. Given the Chinese mind leans towards the contextual and relational, China's true intent remains unclear. Beyond this, however, I would like to stress that India is inclined to give China the benefit of the doubt. Finally, I would hazard that Asia's economic growth and expansion are clearly on an upward curve and this should further enhance its geoeconomic importance. On the other hand, given the absence of a well-anchored regional security structure or a concert of nations in Asia on the lines of the concert of Europe in the 19th century, the presence of geopolitical upheavals given the dysfunctional nature of security aspects in the region and the new threats cannot be ruled out. We therefore have a balance sheet which is, I think, tilting towards the negative rather than the positive. Thank you, sir. Thank you very much, Governor Narayanan, for your list of the security challenge and geopolitical problems facing Asia. I'd like to invite now our next speaker, Mr. Jin Ryu, from Korea to address us. Good morning. My name is Jin Ryu, chairman and CEO of Pung Sound Corporation. Our main business is nonferrous metal and also defense. It's two of the products that we make. We make 60% of all the world's coin blanks and we also export quite a bit of ammunition. So we know which countries are doing well making money and we know which countries are not doing well going to war. So those are two of my business. Our first, I'd like to start by talking about the strengths and weaknesses of Asia in general and then conclude by talking about Northeast Asia, which includes China, Japan, North Korea and South Korea, where as part of my experience, we live. Obviously, like the Deputy Minister of Turkey said yesterday, with more than half of the world's population centered in Asia and still growing, the future of global economic growth would be concentrated in Asia. And that is why the United States of America a few years back said they were pivoting to Asia. Although I think the word pivot was the wrong word to use, it sounds as though Asia is much more important than other parts of the world. But what can you say? Typical American phenomenon using fancy words, not thinking about the negative impact of such words. Not only half of the world's population is in Asia, but most of the economic growth is also concentrated in Asia, where countries like China, Indonesia, India, Vietnam and even countries like Philippines are achieving tremendous economic growth. With both the population and economic growth, Asia will continue to dominate as a manufacturing base from high-end industrial goods to low-end staple goods such as agricultural and textile goods. It will also be the biggest market for high-end goods, from airplanes to all kinds of luxurious goods. There are more millionaires and billionaires coming out of China and other Asian countries than any other part of the world. So Asia will continue to be the biggest exporters as well as the biggest importers of all kinds of goods. That is the good news and the strength of Asia. That is the bad news and the weakness of Asia. With the tremendous population and economic growth, Asia cannot handle all the environmental and social issues that comes with it. For example, the pollution and air quality in China, especially in Beijing, is so bad that it is not only a Chinese problem, but it is also beginning to affect the air quality of Korea. When the winds are strong during the wintertime and springtime, all that bad air comes to Seoul and to my country. It is so bad that I am thinking about getting another house somewhere else, other places in the world. And Monaco is not a bad place to get another house, I think. So I will seriously think about it. Also, Asian countries that are poor have no ability to control any kind of environmental problems. And in addition, they have too many social and basic human rights problems, such as abuse of women and children's rights, problems such as, again, children's rights leading to human trafficking for sex and also in human working conditions for underage children. Corruption is another issue, but I see things are improving in that end with the rise of democracy in various of these countries. In addition, Asia recently went through some massive natural disasters such as the typhoon in the Philippines and then the big tsunami a few years ago in Japan that would take a long time to recover. I think one of Asia's major weaknesses is that Asia does not have a strong leader or a control tower like the United States in the case of North, South and Central and South America. And in the case of Europe, you have the European Union that in some cases it reached out to African countries. China and Japan could certainly play that role, but as China becomes more powerful and richer, they seem to be getting greedier trying to control everything, including the airspace, whereas Japan is trying to increase their military strength without acknowledging their neighbors about what they did wrong in the past. In some ways, they still think they are the victims of World War II instead of the aggressor. And in the case of my country, Korea, I suffer from what I called Korean Alzheimer's. We forget all the good things that happened between our neighbors, but only remember the bad things and the grudges. I always say, you can change your wives, but you cannot change your neighbor in countries. So you might as well do your best to get along. And finally, you have North Korea, which is completely another planet. How many leaders in the world will execute his uncle? So Asia, despite all its opportunities and great future, have many problems to deal with. And we cannot solve these problems alone. I think the European Union could be a good model for Asia so that we can bond together during good times and bad times. But could we create a union like what you have here? Thank you very much, Mr. Junryu, for your perspective. May I now invite Ambassador Ho Chi-ma? I come from Japan. Listening to yesterday's interventions, some people are talking about demography. Inevitably, we will refer to as a declining country. Maybe eventually we'll be vanishing, but we haven't vanished yet. I'm here to prove that. But in the context of the declining labor force, Abenomics is trying to have an increase in the labor participation rate, having women start to work more and trying to use elderly people who should be retiring but still working. That's why I'm here. But when I go back to Tokyo and say I've been working in Monaco, trouble is people won't believe me. Having said that, I do not want to... Many people have expressed a very broad view of Asia and what it has as weaknesses and strengths. Let me just try to be very concrete specific on some of the issues that concern us. And I put it in three A's, not three I's, I'm sorry, but A, Abenomics, ADIZ, and Asia in the context of global security. Abenomics, I won't go into detail because you know the detail if you've read the Finance Times series of articles in the past few days. I just want to make one message. That is that what is the message of Abenomics? Now, the jury is still out, as somebody had said, it's always been said. But the most important part is Mr. Abe brought the case before the jury, which is the Japanese population, which is to say that people, look, you don't have to be bogged down in the deflation I mindset. We would change the atmosphere. We would change the outlook for the future. That is the inflation rate policies. And this is being successful. Now, the third arrow, the structural reform, I won't go into detail, it's still coming one by one, but the results will be still out there to be determined later. But the mood has changed. If you go to Tokyo and walk the streets of Tokyo, there's totally different... I haven't told you, the atmosphere is quite positive. So now the question is, how will this be channeled into consumption and greater investment? Because during the deflationary mindset, people are not consuming, not investing. So people in Europe, we haven't vanished. We are now coming back on the radar screen. So look forward to the success of the economics. Second one, the second day is ADIC. There has been already some references. So let me just go into some detail. ADIC stands for Air Defense Identification Zone. The problem that China, Chinese ADIC, is that it's not quite the ADICs we have in Japan or others. There are a couple of very important critical differences. So it's really a misnomer to call this an ADIC. Two most important things that we are concerned about. One, it has demanded that all aircraft flying in the airspace designated should notify the Chinese authorities. Not only those destined to China, but every aircraft flying in this space. It comes with a threat. It says, if you don't obey our orders, it doesn't say so specifically, but there's a hint that it could be shot down. And of course, all of us who live in this part of the world, unfortunately, remember what happened to KL 007, which was shot down by Soviet interceptor in 83 or something like that. So all the civil aircraft will be very careful. More importantly for us is the fact that it covers the airspace over Senkaku Islands. Now, we have our ADICs for some years because it has nothing to do with territorial claims, but only for some specific purposes. Our ADICs do not cover the airspace of territories we claim that are administered by other governments like the Northern Territories of the Soviet, administered by Russia, and Takeshima administered by Korea. Senkaku Islands have always been administered by Japan since it has become part of Japan. Not only that, because of this fact, it's administered by Japan, it's covered by the US-Japan Security Treaty. So to have an ADIC or so-called ADIC covering these islands, airspace, with a threat is an obvious challenge to not only Japan, but the United States, and also the status quo security structure we have. It's a huge challenge, and it should not be dismissed as only a technical matter. It has to be rescinded. And if I may, I don't want to go into detail, but if I may, Chinese would say, well, but Japan started all this by nationalizing, quote-unquote, the Senkaku Islands. But I'm sorry, I don't think those people who use the so-called nationalization as an excuse understand the meaning of nationalization. If you have a government purchasing equity of some corporation, 100%, 50%, whatever, you have the control, then you just call nationalization. What happened in Japan, with a certain political purpose, of course, to avoid the whole purchase of some of the plots being used by ultra-nationalists, government purchase did not avoid the place being a staging area for something unacceptable. But it was only a transaction. It was a transaction of title, of ownership of some of the plots, which means that we have a registry of a real estate which has always been there, meaning that it's under Japanese effective administration. So nationalization has nothing to do with the sovereignty issue. It was, in fact, a political move tried to avoid a contest tenuous situation. So let's now move on to the whole question of Asia in the global context. Yesterday I was listening with interest because I used to be posted in Middle East. The whole issue is about the Middle East. But if I may say so, I was a bit worried or struck by the fact that people who are from Europe were saying, you have to do this. There were also differences. But as if to say, security in Middle East will not affect directly the European security. If you look at, well, I'm not going to talk about Middle East, but if you're talking about East Asia or Asia, security there, the security issues in the enumerated order will be affecting you, your world globe. If you remember, many of the people in Europe, if you are old enough to remember, in the 80s there was a whole issue about the INF, the SS20s and the Persian clues. And there was an idea to move the SS20s across the roads towards east of the roads. And we said in Japan, wait a minute, SS20s are mobile. You may be avoiding some problems in Europe, but it's creating security problems in Japan. So the leaders got together and G7 said security is invisible. Likewise, what's happening in East Asia with the challenge of the security status quo structure will affect Europe. And there's also the linkage between the security and the economy, obviously. So another point I needed to, I should have said earlier about the Chinese so-called EDIGs is the lack of congruence with what China is trying to do on the economic front. It came at a time almost coincidentally with the third plenum. And of course, you all know have been following the third plenum. It has a decisive direction towards market economy or reforms towards market economy. We all wanted to succeed. We in Japan wanted to succeed or it would be a very important impact on the world economy. For these reforms to succeed, you need an international environment, political environment conducive to such reforms. So that FDIs and other economic exchanges will take place. We are not certain what the intentions are of having this kind of security threat at a time when China has to focus on reforms. I have spoken too much. I don't know what the future has in store for us. As somebody mentioned, whether 2014 would be something like 1914, God forbid. But I don't know. But I'm all hoping Asia will muddle through. At the moment, there's more muddling than through-ing. But I hope we will finally come through. Thank you very much. Thank you. Thank you, Oshima-san. We are now inviting Mr. Tokunov from Russia to address us. He's also an expert on Korea. Thank you very much. I am from Russia, which is both Europe and Asia. And we call ourselves a regional nation. But I want to say a few words about the issue which has been attracted a lot of attention in recent days. It's happened in such a way that I followed the situation in Korea for almost 40 years. And I spent my junior years, young years as a junior diplomat in the Soviet embassy in Pyongyang. And since that time, I visited North Korea for many times. And the last one was a little bit more than a year ago when I participated in the festivities dedicated to the 100th anniversary of great leader Kim Il-sung. So I have dared to say that I know what is going on in Korea and even in the north part of this peninsula. But frankly, Korea, which is a very old international Asian problem but still very alive, is bringing a lot of surprises and shocking news to us, particularly from the northern part of the peninsula from the so-called Hermit Kingdom. You know that Korea was called Hermit Kingdom in the Middle Ages and North Korea is still the Hermit Kingdom, the closest country in the world. And in recent days, we were shocked by the news that the closest relative and very strong supporter of Kim Jong-in, the young leader, was purged and executed as well as a lot of his supporters from the party system as well as from the military. You know that Kim Jong-... Chamsung Tech was a husband of beloved sister of Kim Jong-un, and beloved sister of Kim Jong-in and the aunt of Kim Jong-in. So both of them played a very important role in the history and in the developments in Korea in recent 20 or even more years. So elimination of Chamsung Tech and his supporters might have great consequences as Kim Jong-un shows his cruelty and unpredictability. His aggressive posture in 2013 and psychological war aimed at the West to solidify his power and force concessions out of the United States causes great concern. Initially there were many hopes that the young western educated leader if we take the two years in Swiss secondary schools as Western education of course, might change the cause of his country to a more pragmatic one. He gave such hopes thanks to PR actions aimed at increasing popularity with the somewhat skeptical population of the country. But the initial push for changes has stalled by the end of 2012 and the question about possible changes in North Korea remains open. In 2013 the headline policies dominated both internal politics where repressions were on increase and external policies where the inflammatory rhetoric and provocations were above. Can Kim Jong-un leave these things as they are at the old part of the leadership once? Geopolitical position of the country, the factor of South Korea, the strategic goal of which remains the absorption of North Korea and the factor of China which wants to control the regime does not allow experiments that endanger the security of the regime. The obvious recite are the conservation of the leadership and hopes to renovate the totalitarian monarchial political system. However, the penetration of information from outside and the development of market relations has made it increasingly difficult. The population has long lost faith in chuchier ideas and perceives propaganda as white nose, learned how to overcome prohibitions with help of bribes. So far the regime keeps its stability simply because the authorities have for the first time left the population much alone to pursue their economic interests and personal life rather than participate in collective efforts as long as the system is not challenged. The most vivid testimony is the emergence of so-called middle class initially in Pyongyang which discovers new consumerism for itself. The authorities try not to notice that and not to regulate new phenomenon. It's possible that younger part of leadership see this emerging class of owners and successful people as a new base for the regime and wants to count on their loyalty rather than sit on the banners. It could be reasonable as this new class has something to lose and is afraid that in the case of regime change or unification they would lose their social status and position. They do fear that any unrest may result in conquering of their country by South Korea which is seen as hostile and this does not encourage demands for changes. At the same time any criticism of authorities is still not tolerated and the people which were given some breathing space do not feel the acute need and are afraid to challenge the existing code of things as the repressive system of North Korea has the traditional feudal and then harsh colonial system as its direct predecessors and the population simply is not aware of any form of government. But the fact in order to maintain the North Korean state as an independent state the elite has to offer a new national idea and it should not be just survival by means of strengthening military defense capabilities. It is relatively easy to refuse from important ideas of communism. The water cell has already disappeared in 2009 from the constitution of North Korea and the last portraits of Marx and Lenin were gone from Pyongyang's wits I witnessed it myself a year ago. Our style of socialism is elastic. Kim Il-Sanism, Kim's journalism more and more resembles the religious teachings. Remember that Confucius was a real person. There may be different interpretations of heritage. The economic reality of North Korea for a long time already is not Stalinism as was often presumed in the past and even now. Semi-paralyzed public sector exists side by side with quasi-market gray and marketized international sector with the participation of economic entities belonging to the administrative, regional, party bodies, security services and the military as well as joint ventures free economic zones which in the last year have received a new development. As semi-state oligarchic economy is emerging which in principle can become the backbone of the regime in the future. When we speak about the Russian position towards the situation on the peninsula we should emphasize that for Russia stability and prevention of a conflict at its eastern borders which could lead to tectonic changes in geopolitical situation is the outmost priority in its Korean policy. Unfortunately it is questionable whether the goal of denuclearization of North Korea is attainable for the moment. So any diplomatic process is only a tool to hedge the risks. Stop North Korean improvement its arsenal and prevent nuclear proliferation. The basic underlying theory of Russian policymaking is that the need for peaceful coexistence in Korean peninsula. Of course the relations of Russia with North and South are not equidistant as some critics in South Korea say. Although there are sharp divisions on Korea issue even when Russian elites, liberals, vis-à-vis communists and nationalists but the policy is formed by the moderates guided by the Russian vision based on decades of analysis dating back to 19th century and 70 odd years interaction with North Korean communists. In principle in the long run unified friendly Korea state without any foreign dominance though sandwich between China and Japan could be a powerful balance to Russia for being in the crucial North East Asian region. It would also enormously help Russia's economy advance in Asia and it could make Russia a significant player in energy sphere and logistics as well as in reconstructing North Korea. Therefore Russia supports both inter-Korea reconciliation and eventual unification except it costs peaceful unification. The only acceptable method to Russia seemed not to be on the agenda and a forceful absorption of North Korea by the South could be helpful both to Korean nations and regional security. At the same time the collapse or soft landing of North Korea are not imminent as the third generation's power transfer is going smoothly. Based on that Russia cannot afford to quarrel with its neighbor let alone press for its downfall regardless of its actual feeling towards the brutal North Korean regime. Russia stresses the need to engage Pyongyang not because of warm feelings in Moscow towards regime or because it's considered an important part of Russia advance in this but simply because this is essential for maintaining security in its borders. But the agenda of diplomatic process should be comprehensive and not be concentrated solely on North Korean nuclear problem but addresses all concerns including that of the North Korea of normalization of relations of North Korea with its neighbors, I mean Japan, I mean the United States. Russia called for multi-lateral approach to Korean issue and the most urgent issue on the agenda is to create a new peace and security management system in and around Korean peninsula. How can such a system look like? It's obvious that strictly bilateral agreements on North Korean security related issues simply do not work. Take an example of South North agreements of 1992 and of 2000, 2007 summit declaration the United States North Korean 94 grid framework and Japan North Korean declaration etc. Thus a durable peace regime should be a multi-lateral construction and include the chief actors related to the situation. In other words, Korea, China, USA, Japan and Russia as well as UN as the supervisor should work on the package deal proposal that could be described by the formula peace for Nukes. Well, I spent all my time. Thank you very much. Thank you. We now have Mr. Yang from China to address us. Thank you. This is my first time when I got an invitation. It was called as a conference on global governance. I was given the topic of the strength and the weakness of Asia. So as a scholar, I prepare my this talk from the perspective of both the strength and the weakness of Asia in the context of global governance. And I'm from Shanghai. Not a capital. And I remembered 10 years ago for my first visit to India my Indian friends encouraged me. Through Shanghai guys work hard. Maybe in 10, 20 years you can catch up with Bombay. So now I would like to talk about how I look at the strength and the weaknesses of Asia in the broader setting of global governance. I was born as an inculable optimism. I always look at things on the positive and encouraging side. So I think Asia has its great strength in the following ways. Number one, it's a matter of course the Asian's economic dynamism. Ever since the 1950s and the 60s. Let's look at the G20. And I counted if we count China, India, Japan, ROC, and Indonesia, and the Russian. And the one volunteer tried to be a member of Asia, that's Australia. And also very much wanted to be a part of this region, the United States. The seven actors counted for 40% because of the limit of time I won't go into detail. The second is the political strength. Asia is a region thirsty for learning. China inherits such a civilization, Confucius said. If three people taking a walk, there must be one to be my teacher. And some other civilizations are cultures different. They think if there are three people taking a walk, I must be the teacher. So in China, we can say learn from India, from Japan, from the United States, sometimes not the other way around. And the third, the strength lies in the open regionalism. Looking around the world, there are only Asia that our regionalism is open. If you are not a European country, you cannot be a member of European Union. And if you are not a west hemisphere country, you cannot be there as a full member. But for East Asia summit, we can have India. That's from South Asia. We can have Australia and New Zealand. And in particular, we can have America, the United States. And this kind of open regionalism gives the strength rather than weakness to Asia. So in the post-World War II years, almost 17 years, Asia is constantly on the growth, development from one echelon upgrading to a higher level of echelons. And also, there are more shared values coming together. I remember very well when Prime Minister of India, Mr. Singer, came to China, gave a talk at the China Academy of Social Sciences. He said, Asia is large enough for both China and India to have common development. And during the 1997 financial crisis, and the same both spirit became the order of the day. And then 10 years later, during the global financial crisis, a new norm of thinking, that is, have consultations before, during, and after. So we had avoided a possible repetition of the Great Depression of 1929 to 1931. But as every coin has its other side, with these strengths, we have the weaknesses. First of all, there is much lack of regional awareness entities. And in Asia, people are talking about Northeast Asia, Southeast Asia, South Asia, Central Asia, and sometimes we think West Asia is belonged to the Middle East. And what is more, and the second problem is most obvious, the political and security issues. And today we heard so-called China's expansionism and China-Japan's drive and China and Asian countries disputes over some islands and the waters. And of course, when Japan had the ADIC 44 years ago, nobody was talking about that. When the United States was announced, it was not. But now, when China did anything, it became the headline of the world news, and our American friends told us, oh, buddy, don't be fuzzy about it. We Americans always like that because you are growing. You're growing too fast. And now you have become in the limelight of the stage and you have to bear all these attentions and focuses. And also the economic issues and social problems, the inequality of distribution and also that the Asian economy contributes a great deal, like 40% to the world growth, but Asia is still in the lower ladder of the economic decision-making and the course of this, the rise of this course, rulemaking, agenda setting, etc. So Asia is an Asian continent and the rise and the emergence of Asia will be a long procedure, process that we have to. But I think if I'm Chinese, I like traditional Chinese medical theory. According to that theory, you have to build up the positive side. In building up the positive side, the negative side in proportion would go down. If we focus on the positive energy, positive side, and learn from the United States, learn from Europe, learn from Africa and to put every good part into our own make-up and then sooner or later we can reach. In concluding, if we look into the future, 50 years, 100 years later, and we compare the world wars grappling over the rural area for coal and steel, but if you think in a broader sense for cooperation, for win-win at the end, then someday you would think and these kind of things should be dealt in a more constructive way. So I think I'd better stop here. Thank you. Thank you very much. Thank you very much, Mr. Yang. Before I open the floor for questions and discussions, let me just share some perspectives on Southeast Asia, the ASEAN countries of Southeast Asia. The 10 countries of the ASEAN nations has a combined GDP of US 2.2 trillion, a population of over 600 billion and growth of 5.6% per annum. The ASEAN countries also have a very young workforce of 310 million people below the age of 30, overseas trade for the ASEAN countries, account for US 2.5 trillion and these are some of the positive economic indicators from ASEAN. What is perhaps a very strong point for the ASEAN countries is that the East Asia Summit that Mr. Yang referred to earlier has recognized ASEAN centrality, that ASEAN as an entity would be a key force in East Asia and the dialogue with the other East Asia partners. The ASEAN countries are now negotiating a new FTA called the Regional Comprehensive Economic Partnership Agreement, our outset that will combine ASEAN with China, India, Korea, South Korea, Australia and New Zealand and I think this would be something that is quite important for the future growth in the region. On the other side, in terms of the challenges, the ASEAN countries needs to rebalance and rebalancing in ASEAN would need to focus on domestic consumption, regional integration, social inclusion and sustainability. And ASEAN faces what I would describe as the three East challenges, the ecological challenge, the problem of environmental degradation that some of the speakers have spoken about earlier, the challenge for education and human capital development to build the skilled workforce that we need to take ourselves forward and also the problem of employment because in the ASEAN countries over the last few years we are experiencing a period of jobless growth where there is strong growth but there's not enough employment generation. I think these are some of the challenges that ASEAN faces. I would now like to throw the floor open for questions. Can you please identify yourself? Thank you. I'm Michael Foleylove. I'm the director of the Lowy Institute in Sydney, Australia, with a European history but an Asian geography and I'd like to ask the panel about the US role in Asia which we touched on briefly but let me put a provocation to the panel if I can. I think you've shown us that wealth and power are shifting eastward. The economic story is mainly a strength. The security story, as many of you talked about, is unpredictable. We heard from Mr Tokenov about events in North Korea in the last week. We heard from Mr Narayanan and Mr Ashima and Mr Yang about tensions in the East China Sea since the Chinese declaration of an ADs. I would make my own observation that Chinese foreign policy is somewhat uncertain. The future of Chinese foreign policy is uncertain. It's somewhat uneven. It's sometimes predictable and sometimes unpredictable. In this context, to me, the American rebalance to Asia makes sense. It makes sense for America to be in Asia in strength. America needs to walk a fine line between reassuring its allies about its presence without emboldening them, projecting strength to China without projecting belligerence. But here's my provocation. It looks to me like the American pivot has run out of puff. US policymakers are still drawn to the Middle East like iron filings to a magnet. Secretary of State Kerry is an old-style Atlanticist. He's focused on bringing peace to the Holy Land and I wish him much luck with that. His first visit, of course, was to Western Europe and to the Middle East whereas Secretary Clinton's first visit was to Asia. Indeed, Secretary Kerry is rarely seen in Asia and when he's in Asia briefly he's usually consulting foreign ministers about what's happening in the Middle East. This is no doubt reassuring to European capitals and perhaps to Beijing, but it's not reassuring to US allies and friends in the United States. I think Obama is interested in Asia but he's distracted. He's distracted by troubles abroad and by political dysfunction at home and in fact he can't even guarantee when he says that he's going to be at the East Asia Summit or the APEC leaders meeting that he's necessarily going to be there. Those three balance are underwhelming. So, to me, the US role in bringing balance to the power structure in Asia is very important but I am unconvinced about the staying power of this initiative and I'd like the panel and in particular perhaps Mr Narayanan and Mr Young to comment on whether the pivot has run out of puff. Thank you. Thank you. We have two more questions and we have three questions for the panel to answer at the same time. Yes. I'm from South Korea, former Minister of Foreign Affairs. We just heard from our panelists two different images of Asia. The strong Asia with a lot of great potentials, become a growth of engine in the next generation. And the other image is weak Asia with absolute property and other tensions. But there's different angle that is interdependence among Asian nations are growing. But at the same time, tensions are also growing. In normal sense, when interdependence increases, the tension should decrease. But in the case of Asia, it's quite the opposite. So we call it as categorized as Panamanian as Asia paradox. And the new government of South Korea, under the leadership of President Park Geun-hye, proposed a kind of multilateral dialogue process in order to solve this Asia paradox that is called No-Sense Asia Security Peace and Cooperation Initiative. And my question goes to three panelists who came from our three big neighbors, Japan, Russia, and China. How do you think about that proposal, the initiative, No-Sense Asia Peace and Security Cooperation? Thank you very much. Thank you. One final question. Mr. Gentleman. Yes. I'm the Iraqi Ambassador to France. Therefore, I'm from West Asia. And I have a question that addresses not the pivot to Asia that we've heard a lot about, but rather a pivot by Asia. And there are two incidents that make me think of this. One is the overwhelming presence of Asian companies, particularly Chinese companies and the bid rounds that were carried out in Iraq in 2009 for concessions or service contracts to huge oil fields. I think the Chinese came up way on top. The other element that makes this to my mind is a statement made by an Indian general at an IISS meeting at the Manama Dialogue a few years ago where he asserted the importance of the Gulf to India as a national security interest because of the presence in particular of over five million Indian nationals there. So we've been talking about Asia in terms of the interests of the rest of the world. But it seems to me that Asia is interested in the rest of the world and being proactive there. Could the panel address this, please? Thank you. Thank you. So I'll open the questions to the panel. Three questions. Pivot to Asia. The North Korea. I mean the North. Is Asia peace initiative and the relevance of the Gulf region? Do you think I invite any of the panelists to respond? Mr. Narell, what do you think? I think the second question is the easier one for us, that is the pivot by Asia. It's true. I think for, definitely for India, West Asia particularly the Gulf, Saudi Arabia and other countries are vital for two reasons. One is we have six million Indians present there. I think they have been useful, both for the countries they are working in and also for India in the sense that they have helped build bridges between India and this part of the world. Secondly, of course, the oil from this area is crucial for India's progress and growth and that's why when you have problems with Iran and other countries, it creates a lot of problems for India. So I think the Indians in Asia, sort of the Gulf and Saudi Arabia, I think have been a factor of both stability as also in building bridges between the two countries. And as I said, the oil that fuels our growth comes from this part. The majority of our oil supplies come from this region. So as far as we are concerned, we are particularly happy. I hope West Asia or the Gulf and other countries are equally happy. I think they are. I shall leave the presence of Chinese companies there to a friend from China. But on the first question on the US poet towards Asia, I think the most important thing is a few years ago, if there was a US poet towards Asia, most Asian countries would have resented it. There would have been a great deal of upsurge against US colonialism or US imperialism or whatever you like to call it. I think the most important change that has happened in recent years is that this has been welcomed by most countries in the region. And particularly the smaller countries have been reassured by the so-called US poets towards Asia. And I think there's a certain amount of concern, particularly among the smaller countries, that the pivot has become rebalancing and whether the rebalancing is going to decline even further is, I think, a matter. Now, whether this is because of imagined concerns or whether they are based on real concerns, I think it's bad. We've just heard from the Chinese representative that, in a sense, I think the Chinese civilization is far more able to adjust to these requirements as another very ancient civilization we respected. But I did try to bring out in my that there are concerns that whether Chinese nationalism is becoming an issue of concern, particularly when you think now the Indo-Pacific region, the Chinese are seen to be now emerging as a naval power apart from their obvious strengths and many other factors. So it is in that context that to assuage such concerns, the US rebalancing towards Asia would have been a very, I think many people are wondering whether the US really is interested in Asia to the same extent as it was maybe a couple of years ago, whether it's due to fiscal reasons, whether due to other reasons I cannot say. But I think there is an effort now amongst the Asian countries and we include Australia in this. We have given up the quartet. But I think there is an idea of Australia and the some of the Asian countries getting together to manage a certain amount of stability as far as relations are concerned. I'll leave it at that, but we can take it on later. But perhaps the Chinese representative. Yes. Thank you very much. I'd like to briefly respond to three of the questions. First, the question by the Australian gentleman about whether the US has lost its puff on the pivot. I don't think so in the sense that you have to look at what's really happening on the ground. And also because, of course, US is a huge global power. It has all sorts of interest involved in other parts of the world. Of course, sometimes they are much more acute in terms of timing. Therefore, sometimes political leaders have other issues to deal with on the immediate basis. But as a long term trend, whether you call it the pivot or rebalance, we see a definite change in strategy. And that is, I think, as somebody mentioned, it was welcome. But I think it needs to be accepted and recognized as a strategic trend, which is very important. In the same breath, people by Asia, of course, Japan has always been in the Middle East because of the reasons we all know. The change is the fact that there are other emerging economies taking interest and getting involved. So yes, if you focus on the economic side, there may be a new developments. But it's only a natural evolution development. And I would not necessarily call it the pivot. It's just a reflection of what's happening in East Asia or in the global scene. With respect to the proposal by the Korean president on the multilateral dialogue, I would say, of course, in a situation like this where there's so much tension because of maybe a growth pains or whatever teasing or whatever the word is, we need to talk a lot. But we need to talk between ourselves, among ourselves, in a very calm and objective and sensitive to other people's interest manner. And we need to have a dialogue. And I think I'm not here to represent the government, but I know that Prime Minister Abe is very much keen to have dialogue with all the leaders from the neighboring countries. Thank you. Any other comments from Mr. Yang? My comments are our Australian friends concerning about the US rebalancing, the uncertainty of China's foreign policy, et cetera. I think the world is changing very fast. It is always with uncertainties. To the Chinese, we are puzzled by the Americans. When President Clinton came into power, he changed George W. Bush, the 41th foreign policy. When the sun came into power, it called for ABC, anything but Clinton. And then the wife of Clinton came into the state department, and she called change. And then the same president, President Obama, came. He changed Madam Secretary into Mr. Secretary and changed again. So perhaps we have got used to the changes of the United States. And now we have to think about China, India, and others. And China's attitudes toward the United States legitimate and the primacy in Asian Pacific region is clear and consistent. And the new Chinese president and President Obama held a very important informal summitry at Sunnylands, California, in past June. And both sides have agreed to build out new model of major country relations. The American version is major power. Chinese version is major country because the Americans think power. That's a matter of course. And in China, power means something else. But we have agreed that we should work on the first of all, no conflict or confrontation, mutual respect, and win-win cooperation. As to Madam President of ROC, ROK, that means the so-called North East Asia Peace Initiative. I think it is a welcome initiative, and we should work for that. But we have the big trouble with your brother, the North Korea. And I hope that soon or later we could solve this problem. But while the problem is over there, we can work on that. We can have the designing. We can have the second track dialogue like this or one and a half or even first the track. China and ROK have been working very, very well. And this is encouraging initiative. Last but not least is the Chinese oil companies in Iraq. Yes, we want to be nicer place. But these places, the Americans, the Europeans are all there. And to work for oil energy is not a thing. But the thing is, if you're only pivoting to oil without anything else, that's not good and a grave mistake. China wants to develop not only resource economic relations, but other than resources, too. But that takes time. And I think China is learning. And I hope that we can work together. Thank you. Thank you, Mr. Lafron. I'm very interested to listen to this discussion. What I see from the business, maybe, to add on the discussion are two things which will be very interesting in the next years to come, is internationalization of Chinese companies, which is taking a major role in the global economy and in Europe, I think, but also in Africa. And both Indians and Chinese are extremely present in Africa, which has also an impact on Europe. And the second point, which is very interesting, will be the position of Asia on the climate change debate, how it will evolve. Because it's a real global, so I think the debate we have was very much a debate between Asian countries, but I think the global issues are also very important. Our time is almost up, so perhaps you can just have one, two minutes to respond, Mr. Ginry. Yes, I just want to answer the reporter's question about Secretary Kerry being Atlantis. But this is a rumor, I heard the rumor that the White House wants Secretary Kerry to spend all this time in Middle East, so he won't make any mistakes on other parts of the world. But also, the other comment is, we had Vice President Biden coming over to Japan, Korea, and China. And President Obama is also scheduled to come to Asia. Of course, this is to make up a strip that he canceled to burn nine Philippines and Indonesia, but I think there's a good chance that he will also stop by Korea, Japan, or possibly China. So we'll see if that is really, and if he does, and I think he needs to do that to prove his words. Thank you. Mr. Dokunov, just a very brief question. I just want to comment on your question. I think that this idea, I mean this peace initiative, initiated by President Park, here is a very good one, but it's very important for all of us, the countries located in this area, not to stop at the stage of declaration. You know, he made in the past a lot of declaration, I just want to remind you, the garbage of declaration made in Krasnoyarsk in late ages. But after declaration, nothing worked. So let's think about the design of this initiative, of the implementation of this initiative. I managed already the security management system, what we need the security management system, of course, including our brothers from North Korea who should participate in the creation of this security management system. Thank you, Mr. Naran, and you have a very brief. Just a minute. It's obvious from the discussion that is taking place that there's more in common than what divides Asia. I think, or I wonder, whether the World Policy Conference has one of its, what should I say, the obit-addict of the conference could be that the countries of Asia should try and establish a kind of concert of Asia like we had, the concert of Europe in the 19th century, because I think then the inherent strengths of Asia would, I think, help this continent to really achieve a miracle. It's a near miracle today, I think we can. So whether the conference can set the tone for this kind of a concert, bringing together countries of Asia and helping in some way to overcome many of the concerns, quite a few of them are perceived concerns, not necessarily real, but there are some real concerns also, between the two, if the World Policy Conference can come out with a final sort of, as I said, dictated, saying that we need to create this kind of thing so that Asia's full potential can be realized. That's what I thought about. Thank you, Mr. Naran, and I think what you've said is very relevant. We don't have a security mechanism to discuss security concerns in Asia. We have a lot of economic cooperation initiatives in the region we need to build on that. I think, ladies and gentlemen, we've had a very interesting session, the Asia session, looking at the strengths and weaknesses of Asia. I do tend to believe that perhaps we have more strengths than weaknesses, and going forward, perhaps we should be looking also at forging greater partnerships between Asia and Europe, and in that regard, the negotiations between the European Union and the ASEAN countries for an ASEAN, EU, FTA would be very apt and timely. Thank you very much.