Asia in the 21^st Century

by Dr. Walden Bello

1. I must confess that on long flights like the one I took from Frankfurt to Bangkok, I sometimes get an attack of what the Germans call angst, when the ground suddenly slips from under your feet, when your most solid convictions momentarily melt.

2. The most recent one I had was occasioned by a survey of recent patterns of economic growth in Asia, where 4-5 per cent growth rates are now considered low, where 8-10 per cent growth rates are considered normal, where growth is seen as a tide lifting all boats, including the Philippines, which with its 5 per cent growth rate in 1994 is said to be leaving its role as the "sick man of Asia."

3. Something that one columnist wrote about me in the heat of the recent debate we had on the ratification of GATT returned to me in the midst of these ruminations: that I was an "incorrigible Cassandra" of the impossibility of development in the South in the current world order. Are we in this meeting in fact Cassandras, who see problems where they aren’t or magnify those that exist because we are psychologically hopelessly oppositionist?

4. The current consensus celebrating Asian economic growth is a powerful, persuasive, and ideologically hegemonic alliance of government technocrats, business people, and intellectuals. Today, this consensus stresses two points:

• that high-speed growth will mark Asia far into the 21st century;

• that Asia will be the driver of the world economy for a long time to come, as the U.S. and European economies stagnate. In short, it’s Asia’s turn to be at the center of the world stage.

5. Of course, there are some differences within this coalition. For instance, there are those who see growth mainly as resulting mainly from a greater play of market forces, while others still uphold a role for a strong activist state. But everybody comes together around the desirability of high-speed economic growth.

6. Representatives of this ideology do not deny that there are problems that have come with this growth. They admit to the spread of inequality and environmental damage. But they say, "These are really first-stage problems. They are not intrinsic to the growth process. Besides by generating wealth, growth creates the wherewithal to solve these problems in the future. Or, as some put it, "only when wealth makes us predominantly middle-class societies will we have the luxury to worry and the means to solve these problems."

7. Just when your defenses begin to crumble, Korea comes to mind, specifically agriculture in Korea.

• Korean agriculture is on its last legs, with only 15 per cent of the country’s work force engaged in this enterprise.

• This is not a result of the natural laws of economics but of economic policies that consistently subordinated agriculture to the interests of the export manufacturing sector.

• And one asks: Is the loss of food security, is a future of almost total dependence on food imports from the U.S. and a few other Northern agricultural superpowers a good thing?

• Is not the loss of rural communities not only a severe loss in economic terms but also in terms of cultural identity? Is not agrarian society part of what defines Korean culture, and with the loss of the countryside, is not a central defining element—a core of Korean identity—about to vanish?

8. Just when your defenses begin to crumble, Taiwan comes to mind.

• Taiwan, many Taiwanese will tell you, is an economic miracle and an ecological wasteland.

• The indices of ecological devastation are breathtaking, among them: the lower reaches of practically all of the island’s 44 rivers are biologically dead; cancer, an environmental disease, has become the leading cause of death, and asthma cases have quadrupled in one decade; leading academics and environmentalists in the Taiwan 2000 Report tell us that even with just half of Taiwan’s growth rate in the 1980’s, Taiwan will still face ecological collapse by the year 2000.

• The Taiwanese tell you, they have become prosperous and rich but that they have destroyed the ecology of the island in the process, and it is time to migrate to Vancouver or Sydney because the island has become unlivable.

9. Or take Thailand, which just four years ago, in this very city, the World Bank and the IMP declared as a model for the rest of the world.

• Bangkok booms, but the gap in income between rural people and urban people widens each year. Thailand’s growth indeed benefits largely the 15 per cent of the population that is concentrated in this great city.

• Bangkok booms, but the Northeast stagnates, its population converted largely into cheap labor for Bangkok enterprises, with many of its villages now made up of grandchildren and grandparents, the middle generation being for all intents and purposes resident in Bangkok.

• Bangkok booms, but this growth is fueled by the rundown of natural capital, with the area of the country covered by forests down to less than 20 per cent from 60 per cent in the 1950’s.

• Bangkok booms, but air and industrial pollution are out of control, with the lower reaches of the mighty Chao Phraya River now biologically extinct and the Gulf of Thailand now reaching what many ecologists believe to be a state of irreversible crisis.

• Bangkok booms, but pollution and unplanned growth threaten to strangle this great city. So concentrated is pollution that government planners seek to decentralize it under the guise of decentralizing industry! The city is so close to standstill that planners are now thinking of setting up a new politico-administrative capital at some distance from the Bangkok metropolitan area.

10. So the question: Are the problems that we Cassandras highlight transitional problems, as the growth ideologues claim? Or are the extinction of agriculture, the spread of social inequality, and march of ecological devastation intrinsic to the model? I think the evidence is stronger for the side that says that these problems stem from the very logic of high-speed growth. Taiwan, Korea, and Thailand today are the face of the 21st century should this model continue to hold sway. And if this is the face of the 21st century, is it worth it dragging the rest of the region to this acme of development?

11. But aside from the deepening of inequality and rampant ecological devastation, there is another feature of this model that is creating consternation, though this is something one will not be able to discern in the Far Eastern Economic Review or the Asian Wall Street Journal: this is the emergence not of autonomous national economies but of a precariously dependent regional economy. Let me elaborate:

• The current Asian prosperity has been largely created by one thing: the massive flow of Japanese capital into Northeast and Southeast Asia, as a result of the Plaza Accord of 1985, which forced the appreciation of the yen relative to the dollar and other hard currencies. This resulted in a massive rise in the relative cost of production in Japan, forcing the Japanese to open up production sites in low-wage areas in the Asia-Pacific.

• This resulted in the creation of a massive export platform, as Japanese conglomerates set up assembly sites for different products or for different components of one product in different countries. The region’s dependency on Japan is captured by two critical indicators:

  - Almost every country is now running multibillion dollar trade deficits with Japan, as they import high value-added Japanese machinery, technology, and industrial components while they export to Japan low-value added raw materials, agricultural goods, semi-processed goods, and assembled manufacturing products.

  - Technological dependency on Japan is severe, especially in high technology. When 90 per cent of the components of a Korean laptop computer come from Japan and almost 100 per cent of semiconductor manufacturing equipment in Taiwan comes from Japan, can we say with these tiger economies have ceased to be technological satellites of Japan? Indeed, can we say that Taiwan and Korea have ceased to be labor-intensive assembly points for Japanese components using Japanese technology?

• What has occurred may be more accurately described not as the emergence of a regional economy with plural centers but as the regionalization of the Japanese economy. Malaysian and Thai, technocrats would no longer find such a description absurd, since the Japanese corporations have put them no notice that with wages rising fast in Malaysia and Thailand, they are considering migrating to Indonesia, Vietnam, Burma, or China.

• It is indeed paradoxical that as the East and Southeast Asian economies enter the 21st century, they find themselves more tightly integrated to and more dependent on Japan than when they began their modern industrialization drive, 25 to 30 years ago in the case of the Northeast Asian NICs ("newly industrializing countries"), 10-15 years ago in the case of the Southeast Asian NICs.

12. The purveyors of the ideology of high-speed growth offer not only the vision of permanent prosperity but also of lasting peace. No one captures this conviction of the correlation of prosperity and peace in the region more than Tommy Koh, formerly Singapore’s ambassador to Washington, who says: Asia is a region of booming economies that is at peace with itself."

13. The evidence of the senses, of the here and now, appears to confirm Koh’s assertion, but does it hold up against history and analysis. It depends on your time frame, and if you look at the last 150 years, from the time of the last massive wave of imperial expansion into the region, East Asia has, for most of the period, been one of the two storm centers of world global geopolitics, the other being Europe. Indeed, in the post-war period, the two major wars of the Cold War were fought not in Europe but in Asia. This extended period of relative peace, which dates from 1975, when Saigon became Ho Chi Minh City, appears in this view to be more the exception than the rule.

14. But let us look more closely at this period of relative peace. What has changed? True, the Cold War is over, but a myriad points of tension and conflict remain. Indeed, these points of tension are now likely to be exacerbated, now that the discipline of the Cold War is over. Among these points of tension are:

• conflicts triggered by territorial aggression, such as Indonesia’s invasion and continuing occupation of East Timor;

• conflicts over resources, such as the six-nation conflict over the Spratly Islands; border conflicts, such as the Indonesian-Malaysian dispute over several islands, the China-Vietnam boundary dispute, the Japan-China-Taiwan dispute over the Senkaku Islands;

• conflicts that are a legacy of the Cold War, such as the continuing volatile situation on the Korean peninsula;

• communal conflicts that have transborder spillovers, such as the Christian-Muslim conflict in the Philippines, the Buddhist-Muslim tensions in Southern Thailand; and the Malay-Chinese antagonism in Malaysia and Singapore;

• and not to be forgotten, conflicts engendered by continuing Western colonialism in New Caledonia, French Polynesia, and Micronesia.

15. Now unlike in Europe, where you have had NATO, you do not have a multilateral peace and security mechanism operative in the Asia-Pacific, nor is there a mechanism that can move conflicts away from resolution by force to resolution by diplomacy. What there is to ensure the peace is a very volatile, informal, hybrid system of regional security with three pillars:

• continuing U.S. unilateralism, which is a carryover from the Cold War;

• balance of power diplomacy, where mainly the ASEAN countries try to play off China, Japan, and the U.S. in order to gain maneuvering space; and

• arms races carried out by neighbors against one another, which have made the region by some accounts the world’s biggest purchaser of conventional arms.

So we basically have balance of power politics cum U.S. military unilateralism as the region’s fragile mechanism of security. In this connection, I would like to call your attention to Reinhold Niebuhr’s observation on the balance of power in Europe from 1815 to 1914, which kept the peace for a hundred years only to explode in the Great War of 1914: "Balance of power is a sort of managed anarchy in which anarchy overcomes management in the end." What our elite are telling us is that the sort of managed anarchy that we have right now is enough to ensure the peace, especially since it is built on prosperity.

16. In fact, recent trends call into question this correlation between peace and prosperity in the absence of a multilateral peace and security system:

• Prosperity in the region has provided the means for the massive arms purchases of the region’s militaries in the last few years. In this connection, it is useful to point out that the least destabilizing military in Southeast Asia is the Philippine Army, not because it loves peace but simply because economic stagnation in the Philippines has deprived the Philippine military of the resources for arms acquisition.

• Growth creates dependence on resources to continue fueling it, and this creates the temptation to secure those resources through military means. This is the root of the Spratly Islands conflict.

• Prosperity provides elite with the psychological security to engage in confrontational behavior and aggressive action.

• Prosperity brings about greater dependence on markets for exports of goods and capital, and the more important the markets, the greater the temptation to create the military might to keep those markets open to protect one’s assets there. Thus, one of the big debates in Japan’s military establishment is whether or not to build a "force projection" capability to protect Japanese assets in Northeast and Southeast Asia. We must also not underestimate one of the continuing rationales for the continuing massive American military presence in Asia, which we ignore at our peril, and that is to keep Asian markets open to the United States.

17. One of the most important conditions for peace is the spread of democratic government. Democracies, it is observed, seldom go to war with one another, whereas authoritarian governments have a propensity for war. It think that the reason is simple: in democracies, though they may be no more than formal democracies, there are mechanisms like checks and balances, the free press, public opinion which assure that, even if a democracy has gone to war wrongfully, its policy can be reversed. But authoritarian regimes do not have such internal checks. Indeed, authoritarian regimes tend to channel outwards, sometimes onto overt aggression, the internal tensions that have built up owing to the repression of political expression. Had Indonesia been democratic in 1975, I doubt if the invasion of East Timor would have taken place. The Asia-Pacific would be a more peaceful and stable region today if there were less authoritarian regimes around and democracy were more universal.

18. Indeed, the absence of democracy as an element of the vision that our elite are promoting is deafening. Instead, they have mounted an offensive to convince their populations that Asians have their own peculiar forms of governance, that they have their own brand of "democracy" that does not have the Western emphasis on individual rights, electoral competition, the free press, free assembly, and checks and balances. Asians, like good Confucians, says Lee Kwan Yew, value order over change, hierarchy over false equality, and cooperation and mutual respect between elite and the masses. Asians, we are told, fear that too much democracy may undermine the East Asian economic miracle. I don’t know about you, but when I read Lee Kwan Yew’s list of supposed Asian values, I do not see Asian values but good British, upper-class, Tory values.

19. Let us come to the point. This whole rigmarole about Asian or Confucian democracy is really a counteroffensive by alarmed elite to the great democratic wave that has been sweeping Asia since 1986, which has claimed the lives of authoritarian dictatorships in the Philippines in 1986, Korea in 1987 Taiwan over the last few years, and Thailand in May 1992. However imperfect these democracies are, however much they continue to be characterized by political and economic domination by elite, the systems of governance in the Philippines, Korea, Taiwan, and Thailand, are different from those that reign in China and the ASEAN Four—Singapore, Malaysia, Indonesia, and Brunei—and that dividing line is what Lee Kwan Yew, Mohammed Mahathir, and other champions of Asian authoritarianism are trying to ensure will endure.

20. In short, the Asian economic miracle has not rendered irrelevant the progressives’ message. We are not Cassandras. We are merely pointing to flaws as obvious as 8-10 per cent growth rates. But our message must be restated, reformulated, and renewed. Let me end by articulating the three elements of the alternative paradigm (though I will reserve for my talk tomorrow the elaboration of some of the aspects of this program):

• Against the model of high-speed growth, we posit that of sustainable development.

  - The intrinsic drive of the market to create inequality and devastate the environment must be restrained by the community and by the state.

  - The economy and the market must be brought back into the control of the community, instead of the economy being subject to the dissolving impact of the unrestrained market.

  - In contrast to a regional economy dominated by economic superpowers, we posit a vision of regional cooperation based not only on market and trade but on democratic regional planning that enhances instead of marginalizes communities, regions, and countries.

• Against managed anarchy at the level of state to state relations, we need to build a regional system of peace and security built on the principles of demilitarization and denuclearization.

• Against "Asian democracy" and other formulations seeking to give authoritarianism as facelift, we must embrace a new progressive doctrine of missionary democracy, which seeks to assist its spread among our neighbors while deepening its practice at home.