Undoubtedly, the model of success creates many challenges and responsibilities for all Asian economies. The most important challenge being the maintenance of socio-economic institutions that are consistent with the needs of sophisticated high income economies.

A second challenge is in dealing with all the problems that inhibit foreign direct investment and further economic growth in the region. In particular Asian governments should focus on (a) combating corruption and terrorism, (b) mitigating intra-regional ethnic conflict, (c) addressing the problems of environmental degradation and shortage of energy resources, (d) fighting poverty, and (e) improving health and educational standards of their citizens.

A third challenge is to begin a constructive dialogue among Asian nations with the aim of reaching an intra-regional consensus towards creating a commonly accepted military and economic balance.

Finally, an honest and fruitful dialogue should begin between Asian major economic powers, the US and the European Union. During this process it is important that the major Asian powers should be seen by the major western powers as allies and not as adversaries. As Kishore Mahbubari stated “The Treaty of Versailles which ended the First World War failed because it tried to bloc an emerging power, namely Germany. The same mistake need not be made with China. New powers must be accommodated not contained.”

Being an active and constructive member of the European Union, Cyprus can inform you that our Union’s goal vis-a-vis the Asian nations is not to repeat the mistakes of the Treaty of Versailles. With respect to this the EU objective is to adopt a new strategy for an enhanced partnership between Europe and Asia and to establish a comprehensive, coherent and balanced framework for relations with Asia and its regions in the coming decade.

This new strategy focuses on six key areas as such:

First, strengthening the EU’s engagement with Asia in the political and security fields.

Secondly, further strengthening mutual trade and investment flows with the region.

Thirdly, demonstrating the EU’s effectiveness as a partner in reducing poverty.

Fourthly, promoting respect for human rights, democracy, good governance and the rule of law.

Fifthly, building global alliances with key Asian partners in addressing global issues such as the reform of the United Nations, the World Trade Organization, the environment and other challenges, such as international crime, terrorism and the spread of AIDS.

Lastly, strengthening mutual awareness between the EU and Asia.