Date: 05-17-2001

This article by East-West Center President Charles E. Morrison appeared in the May issue of Island Business.

HONOLULU -- For most of the Asian Development Bank's first three decades, its annual meetings have taken place against a background of robust Asian economic growth. Compared to any other region of developing economies, Asia and the Pacific consistently showed the highest rates of per capita GNP growth, the most effective performances in reducing poverty, and the strongest records of stable macroeconomic management.

But this changed with the great Asian economic crisis that began in mid-1997. By 1999-2000, except for Indonesia, the region seemed to be successfully recovering. Now, however, there is increased concern that the recovery will be more "w" than "v" shaped. There are several reasons for the renewed pessimism: the U.S. downturn, high energy prices, Japan's aborted recovery, and the failure of some developing Asian countries to follow through on promised structural reforms. Underlying these is a more political than economic issue - questions about the quality of leadership.

From Japan to Fiji to Pakistan, so much leadership uncertainty and political turmoil dominate so many countries that we might well refer to an Asia-Pacific political crisis. Impeachment is a common threat, governing coalitions are frequently unwieldy and unstable, and political corruption is an obsession of newly freed presses throughout the region.

With so many simultaneous political crises, the question arises: Was there some systemic element as in the case of the economic crisis? Any such "contagion" operates far more subtly in politics than economics, but there are both connections and comparisons between the two. First, the economic crisis raised fundamental doubts about the quality of governments and political leadership, undermining legitimacy. Second, in very broad ways, the Asian political and economic crises were generated by the same combination of factors - new and fragile systems facing greatly increased challenges associated with globalization.

Two kinds of nations are found in Asia and the Pacific - old and new ones. The old ones like Japan, China, Korea (presently divided), Vietnam, and Thailand, have over the course of centuries established a strong sense of national identity among the majority population. Moreover, these are large majorities of 90 percent or more, although minority groups in some of the countries occupy considerable expanses of less productive land.

New nations like Fiji, the Solomon Islands, Papua-New Guinea, the Philippines, Indonesia, Malaysia, Bangladesh, India, and Pakistan date from the colonial period or were created in the process of decolonialization. Most have pluralistic populations uniting people with often little historical affinity or, even worse, historical enmities. While at different stages, these countries are still in the process of developing their senses of nationhood. Political crises in the older countries may threaten the regimes or even the political systems but not the very survival of the nations. The stakes are higher for the new countries.

Whether the countries are old or new, the political systems are relatively youngin all of them (with the exceptions of Brunei and Bhutan). The oldest, including those of China, India and Japan, date from the late 1940s - a strong contrast to the American system dating from 1789. Taiwan and South Korea have democratic systems established in the 1980s. Philippine democracy was re-established in the same era, while Cambodia, Fiji, Indonesia, and Thailand have quite new and still hotly contested political arrangements.

Just as Asia's financial and economic institutions are not fully formed, neither are its political institutions. Political parties, for example, are often little more than personal support groups with little enduring political philosophy or institutional structure. Electoral processes frequently provide no provision for run-off elections, resulting in electoral winners with 40 percent of the vote or less. Kim Dae-Jung, Chen Shui-bian, Abdurrahman Wahid, and Joseph Estrada were such winners. Other institutions are also weak. The press often became free before it learned to be responsible, and the same might be said of many of the national legislatures.

Rapid development and globalization have brought a host of issues that tax all political systems, but nowhere more than in East Asia. They include mounting environmental pressures and greatly expanded demands for services ranging from health to education.

Globalization has also brought new political values that have more quickly taken root in the capitals than in the countryside. Thai and Philippine leaders have been elected through nationwide votes only to fail later against the standards of the educated, urban elites of Bangkok and Manila.

Since successful economic policies require strong and stable leadership, the current leadership problems will be much on the mind of the ADB delegations in Honolulu.

Charles E. Morrison can be reached at (808) 944-7103 or
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