Global competition for energy and raw materials is set to intensify as China and India join established industrial powers. The world could soon find itself in a "difficult situation as a result", former Japanese prime minister Ryutaro Hashimoto warned yesterday. "We could be struggling," said Hashimoto, who shared a platform with IDB president Enrique Iglesias and ADB president Haruhiko Kuroda at a seminar on inter-regional cooperation.
China has become a net importer of oil and will soon need to "look to the international crude oil market", said Hashimoto, who met with Chinese and South Korean leaders to discuss strategic issues before coming to Okinawa. "This could have a tremendous impact" on energy supplies and prices, he suggested.
Latin America accounts for only 14% of global crude oil production, but has the world's second largest reserves, noted Hashimoto. Great scope exists for economic cooperation between Asia, where energy requirements are set to double in coming years, and Latin America, which is rich in energy sources and minerals.
Iglesias and Kuroda also stressed the need for stepped-up economic cooperation between the two regions. During the seminar, the presidents signed a five-year joint partnership agreement between their two banks. Cross-regional trade and investment has been relatively modest up to now. But it is growing strongly as China and South Korea join Japan to become big investors in Latin American countries, Iglesias noted.
The partnership agreement between the IDB and ADB "opens a new window of opportunity" for Latin America and Asia to work together more strongly in coming years across a wide variety of areas, said Iglesias. These include infrastructure development, tourism, trade and investment, environmental protection and energy exploitation.
Kuroda predicted that Latin America would become an important target for investment from Asian countries as some of them "attempt to diversify their investments both within and outside the region". Asian countries have high savings and are reserve-rich, he noted. "Some portion of this surplus could be invested in Latin America."