DEVELOPMENT-ASIA: Once-Proud Region Wallows in Insecurity

By IPS Correspondents Reprint | | Print |

Analysis - Johanna Son

MANILA, May 26 1998 (IPS) - Not too long ago, a self-confident Asia stood gazing expectantly at the dawn of the so-called Pacific Century, its international standing built on relative peace and healthy economic growth.

But today, Asia is hurtling toward the millennium with steadily gathering uncertainty, humbled by political and economic woes due to a regional economic crisis and most recently, by security worries in the wake of India’s nuclear tests.

This reversal of fortunes has taken place in just one year’s time.

Star economies like South Korea, Thailand and Indonesia tumbled from their perch as some of the world’s models for the developing world, as a financial crisis struck in July 1997 and spread through the region.

East Asian countries, many of whom had graduated from being aid recipients, were forced to go begging to the International Monetary Fund and swallow unpalatable policies.

As a result, economies like Indonesia are looking at contractions this year of up to 10 percent. There, estimates say that poverty incidence has already risen to 66 percent of the population from 11 percent.

In turn, the region’s economic decline has undercut its authority to make the world listen when it speaks on issues of the day, ranging from poverty reduction to the needs of the developing world.

“A future of political strength and cultural assertiveness based on growing economic power has been replaced by the fear of a new colonialism,” that of losing economic sovereignty to outside forces, said Walden Bello, a political analyst with the Bangkok- based Focus on the Global South.

Pockets of social turmoil and instability now litter the region.

In fact, Bello observed: “It is hard to imagine that this is the same region that was being touted as recently as 10 months ago as the ‘engine of the world economy’ far into the 21st century”.

He says a region that was about to leave behind massive underdevelopment has found itself collapsing back into it. The situation is akin to that of Asia in the sixties, when it was the world’s prime crisis area, he added.

So far, Asia’s economic crisis has claimed its biggest casualty in Indonesia, leading to the toppling of former President Suharto’s 32 year-old rule on May 21. Indeed, many Indonesians say that if not for the pain caused by the economic crisis, Suharto would remain well entrenched in power.

Because the early trigger of the crisis was the fall of the Indonesian currency, the rupiah, after foreign capital pulled out, it is not uncommon to hear these days that it was the forces of globalisation that routed Suharto in the end.

And apart from introducing an element of instability in the world’s fourth most populous country, political instability in Indonesia has deprived the developing world of one of its most influential spokesmen.

Suharto has long been known as the elder statesman in South- east Asia, in particular the Association of South-east Asian Nations (ASEAN) of which he was a founding member.

Indonesia’s turmoil is particularly painful for ASEAN, which celebrated its 30th year in 1997. It is only the latest in a string of setbacks to ASEAN’s quest to unify the region, starting with the 1996 coup in Cambodia.

While conceding that Suharto had been repressive, South-east Asian governments view his government as having been a benign, stabilising force in a region wracked in past decades by internal tensions and Cold War rivalries.

“Indonesia’s problems will diminish ASEAN’s political and economic authority, and reduce its ability to act as a strategic counterweight to the region’s ascendant power, China,” argued Alan Dupont of the Australia-based Asia-Pacific Security Programme.

Indonesia troubles “will strike another blow to the pride and confidence of ASEAN”, he added.

And if Asia is suffering through its worst economic crisis since the Pacific War, it has of late also become the focus of security worries in the wake of India’s detonation of five nuclear devices this month.

The Indian tests came on May 11 and 13, just a few days before Suharto fell from power, when the world was not looking. They have sent nervous reactions rippling across diplomatic capitals.

While the tests violated no international law and seemed aimed mainly at a domestic Indian audience, they triggered an exchange of threats from neighbouring Pakistan.

Islamabad has not yet conducted tests, but Prime Minister Nawaz Sharif said on Sunday that “the balance of power in the region has been violently tilted”. China weighed in with Pakistan, with whom it has close military ties, and berated India for the tests.

After delivering a message directed against lopsided standards for the other nuclear powers, India last week unveiled a moratorium on tests and said it was now “prepared” for negotiations on a formal ban on nuclear tests.

Some experts say fears that India’s tests would spark off a renewed race in nuclear testing is unlikely, because India’s and Pakistan’s nuclear programmes were no secret all along.

Still, the tests and their political fallout feed perceptions of instability in South Asia, where India and Pakistan have fought three wars since 1947.

Outside the subcontinent, the rest of Asia does not yield too optimistic prospects either.

While Thailand and South Korea seem to have passed the worst of Asia’s crisis, aided by changes in political leadership, and the Philippines has just hurdled presidential polls, there remain huge question marks on the region’s political landscape.

Cambodia has virtually been paralysed since the July 1996 coup by co-premier Hun Sen. General polls overseen by international observers are scheduled for July 26.

To the north, Asia’s giant Japan continues to be mired in recession, battling financial and corruption crises and hurting from the region’s downturn and in particular, Indonesia’s collapse. Japanese banks hold 40 percent of Indonesia’s foreign debt, putting its already hobbled banking sector at further risk.

The Japanese economy — which has seen the unemployment rate hit a five-decade high of 3.6 percent in February — will be the main issue when general polls are held in July.

Asia does not seem likely to pull out its slump soon, in contrast to the positive predictions in the past of its becoming one of the world’s growth poles.

But even as Asia licks its wounds, many of its countries are vowing to recover soon. As one Malaysian advertisement appearing in several Asian newspapers says, the country is “bullish on bouncing back”.