Kitabı oku: «Statecraft», sayfa 10

CHAPTER 4
Asian Values
PART I: WHY ASIA MATTERS

Asia is the largest continent, comprising a third of all dry land, and containing more than half the world’s population. Its importance is growing and will, I am sure, continue to grow. And that conviction has been reinforced by every one of the thirty-three visits I have made to thirteen Asian countries since leaving office.

Westerners have a habit of getting it wrong about Asia. Its distance, size and what I can only call ‘otherness’ intrigue, mystify and sometimes frighten us. We are inclined to exaggerate. Thus in the late 1980s and early 1990s there was much fevered talk about the twenty-first century being the ‘Asian’ or the ‘Asia Pacific’ century – an era in which the focus of world events and the centre of world power would radically shift from West to East. For example, the distinguished historian Paul Kennedy wrote in 1988 that ‘the task facing American statesmen over the next decade … is a need to manage affairs so that the relative erosion of the United States’ position takes place slowly and smoothly’.* At the same time, in response to Asian economic advance, Western protectionism found new and extremely sophisticated advocates – such as the late Sir James Goldsmith.† In the United States the call to resist the inroads of Asian economic power was taken up by former presidential candidate Patrick Buchanan and others. In Europe a new impulse was given to federalism by those who envisaged a world of competing trade- and power-blocs, one or perhaps two of which would be Asian.

The subsequent crisis which affected most of the Far East’s ‘tiger’ economies and the continuing problems affecting the mighty economy of Japan put paid to some of that hyperbole and hysteria. Indeed, alongside alarm at the global economic implication of this contagious bout of Asian economic ’flu there could be detected a certain Schadenfreude: many Westerners felt that Asia’s problems vindicated their own system and outlook.

But simply because the rhetoric about an Asian century was exaggerated does not mean that Asia’s advance has been halted. Indeed, the underlying realities all confirm that Asia matters – and it matters to the West. To see that this is so we need only consider the following.

First, Asia’s population (as a whole) is growing while the West’s (as a whole) is stagnating. By the year 2050, it is projected that Asia’s population will increase to 5.2 billion out of a total global population of 8.9 billion.* Asian countries have pursued policies to try to limit population growth with varying success and with varying degrees of coercion, and will doubtless continue to do so. But in a global economy with mobile capital and technology, and given the right framework of laws and regulation, large populations mean large workforces and growing markets. Expanding Asian nations will be increasingly important for us, both as customers and as competitors.

Second, Asia contains three – and possibly four – emerging powers on whose fortunes and intentions much depends. China, a major regional power with vast economic potential and uncertain ambitions, represents an increasingly important global player in the greatest game. Japan, still the world’s second largest economy, is deciding how in the long term it intends to protect and project its strategic interests. India, like China a vast country of more than a billion people, is the world’s largest democracy and now an established nuclear power. Indonesia, for all its continuing traumas, is the world’s largest Muslim state: its direction will have a significant impact on Islam as a political force.

Third, although generalisation inevitably means oversimplification, Asian – particularly East Asian – values, habits and attitudes will have a continuing and increasing impact on us in various ways. Asian immigration to the West is the most obvious of these. But, most important, Asian cultural distinctness will be crucial in shaping the economic and political development of the Asian states with which we have to deal.

‘Asian values’ are, needless to say, a thorny subject. Westerners have over the years created images and stereotypes that caricatured and offended Asians. One Asian commentator has, for example, recently argued that ‘the most painful thing that happened to Asia was not the physical but the mental colonisation’, adding that ‘this mental colonisation has not been completely eradicated in Asia, and many Asian societies are still struggling to break free of it’.*

But the recent proponents of the notion that Asians are different – and that this explains why their economies and societies are more successful – have themselves been Asians. For example, Lee Kuan Yew, the former Prime Minister of Singapore, has stated: ‘We [Asians] have different social values. These different values have made for fast growth.’† Again, according to Dr Mahathir Mohamad, Prime Minister of Malaysia, ‘Asian values are actually universal values and Western people used to practise the same values.’‡

We ought to ignore the element of special pleading in all this. ‘Asian values’ do not provide an excuse for abuses of human rights. One would hope that the unacceptable treatment of the Burmese opposition leader, Aung San Suu Kyi, has silenced all but the most shameless proponents of Asian autocracy as a legitimate alternative. But the importance of culture as a component of economic success and as an influence on social and political institutions is a reality nonetheless.

Well-known characteristic features of Asian – particularly East Asian – societies that are important here are the strength of family ties, a sense of responsibility and the disposition to save and to act with prudence. As Francis Fukuyama has pointed out:

Many modern Asian societies have followed a completely different evolutionary path from Europe and North America. Beginning approximately in the mid-1960s, virtually every country in the industrialised West experienced a rapid increase in crime rates and a breakdown in the nuclear family. The only two countries in the Organization for Economic Cooperation and Development not experiencing this disruption were the Asian ones, Japan and Korea … similarly with the countries of South-East Asia.*

A number of Asian countries have drawn on these social characteristics to create successful economies, keeping the size and cost of government down by limiting welfare spending and excessive regulation. These policies, which minimise welfare dependency, should in turn reinforce the social and cultural values which have helped Asian economies to flourish.

I believe that this will remain particularly true of countries that have a majority or a significant minority of Chinese. Wherever they go, even when they are living under the ramshackle quasisocialism of mainland China, they show the same qualities of enterprise and self-reliance.† And given the right economic framework, nothing is beyond them. Just consider Singapore.

PART II: THE TIGERS
SINGAPORE – A MAN-MADE MIRACLE

It is often the case that large truths are best elicited through miniatures. And in the case of South-East Asia that immediately leads us to focus on the remarkable reality of tiny Singapore.

Singapore is one of the world’s smallest states, less than 250 square miles, consisting of one island and fifty-nine islets. It has naturally poor soil, lacks significant mineral resources, and it even has to bring in its water. Yet today it is one of the most commercially vibrant places on earth. It is the world’s busiest port. Although it has to import all its raw materials, it is a major manufacturing centre – chemicals, pharmaceuticals, electronics, clothing, plastics, refined petroleum and petroleum products. Between 1966 and 1990 its economy grew by an average of 8.5 per cent. In short, Singapore is the hub of South-East Asia, itself one of the world’s most dynamic economic regions. And Singapore’s population of four million now enjoys an income per head higher than that of the United Kingdom, Germany or France.

Singapore, as we see it today, can be said to have had two founders. The first was the British colonial administrator Sir Thomas Raffles, who established the city in 1819 as a trading centre, uniquely placed at the passage between the South China Sea and the Indian Ocean. The British East India Company subsequently developed and exploited the port. Under British rule, the present population of immigrants of Chinese, Malay and Indian extraction grew up, with the Chinese in an increasing majority. The British did not exactly enhance their reputation in Singapore during the Second World War. But by the time we left, we had provided the inhabitants with the precious legacy of a rule of law, honest administration and a spirit of ethnic tolerance.

The second founder of Singapore was Lee Kuan Yew. To call him such is no exaggeration. Mr Lee almost single-handedly built up Singapore into one of the most astonishing economic success stories of our times, and he did so in the face of constant threats to his tiny state’s security and indeed existence.* He was faced from the start with communist subversion and obstruction. Then in 1965, when Singapore was effectively forced out of Malaysia amid much acrimony, it seemed to many that its prospects were bleak. But in truth they were just about to shine. Lee Kuan Yew did not just pilot Singapore to prosperity, he became the most trenchant, convincing and courageous opponent of left-wing Third World nonsense in the Commonwealth. During the years when his and my terms as Prime Ministers coincided I saw time and again at first hand how much influence the leader of a tiny state may wield, if he has the wit and wisdom to do so.

Mr Lee and I do not agree about everything. He is nowadays more inclined to think well of communist China than I am. I also suspect that I might draw my own preferred line between freedom and order a little closer to the former than would he. But he is undoubtedly one of the twentieth century’s most accomplished practitioners of statecraft.

Singapore’s success, though, teaches lessons that go beyond politics or even economics. In a certain sense, this little city-state now has everything precisely because it began with next to nothing. Only the skill, creativity and enterprise of men could make it what it has become. It is when talented people – and no group is more talented than the Chinese who make up 80 per cent of Singaporeans – find themselves having to rely on their brains rather than their muscles, that societies progress. And it is when they are given the right framework for enterprise that such progress becomes an ever-accelerating advance.

De Tocqueville expressed this thought in a passage which I particularly like:

Do you want to test whether a people is given to industry and commerce? Do not sound its ports, or examine the wood from its forests, or the produce of its soil. The spirit of trade will get all these things, and without it, they are useless. Examine whether this people’s law gives men the courage to seek prosperity, freedom to follow it up, the sense and habits to find it, and the assurance of reaping the benefit.*

So this insight is not new; it was merely for a while forgotten. Singapore’s example should prevent that ever happening again, at least in Asia.

Singapore’s success shows us that:

 A country’s wealth need not depend on natural resources, it may even ultimately benefit from their absence

 The greatest resource of all is Man

 What government has to do is to set the framework for human talent to flourish.

ECONOMIC CRISES AND PROSPECTS

Singapore weathered the economic storm of the late nineties quite well. Its banks were solvent and well-regulated, its businesses were genuinely profitable, and its administration was honest – none of which was the case in the Asian countries which suffered most.

ASIAN FINANCIAL CRISIS, 1997–98

Chronology of Key Events *

1997

 2 July: After intense currency speculation, Thailand’s currency (the baht) is floated, dropping 20 per cent in value

 24 July: The Indonesian rupiah, the Malaysian ringgit, the Thai baht and the Philippine peso slump

 5 August: The IMF and Asian nations launch $17.2 billion loan package to rescue the Thai economy

 14 August: The rupiah plunges in value after government controls removed

 20 September: The ringgit falls to twenty-six-year low

 19–23 October: The Hong Kong Hang Seng stock index loses nearly a quarter of its value, its greatest ever loss

 31 October: IMF announces $40 billion aid package for Indonesia

 24 November: Yamaichi Securities Co. collapses in Japan, the single biggest business failure in the country since 1945

 3 December: IMF agrees to $57 billion bailout package for South Korea, the biggest in history

1998

 15 January: Indonesia accepts IMF reform programme

 14–15 May: Widespread riots rock the centre of Jakarta, resulting in over a thousand deaths

 21 May: Indonesian President Suharto resigns

 12 June: Japan announces that it has fallen into recession for the first time in twenty-three years

 12 July: Japanese Prime Minister Ryutaro Hashimoto resigns; Malaysia announces that its economy is sinking into recession

 I September: Malaysian Prime Minister Mahathir imposes stringent currency controls

 24 September: Tokyo’s Nikkei index hits twelve-year low

 23 October: Japanese government begins implementing $505 billion plan to rescue her economy and failing banks

 10 November: IMF and World Bank pronounce that the global financial crisis has eased, with a recovery in sight for Thailand and South Korea. Asian stock markets begin to show signs of a revival

Experts will continue to debate the causes of the Asian economic crisis. Later in this book I shall suggest what can and what can’t be learned from it when it comes to global economic management. * Here I would simply note three elements. The first is admittedly a truism. In economics, as elsewhere, what goes up must (at least sometimes and temporarily) go down. Economic advances are never regular, and economic advance at the pace of that which occurred in the Asia Pacific region since the Second World War was bound to lead to upheavals along the way. The solid recovery since confirmed that interpretation. What went down went up again.

Second, there was (and to some extent still is) a systemic problem in East Asian economies – with the notable exceptions of Singapore, Hong Kong and Taiwan. This is the pervasiveness of cronyism in the relationships between governments, businesses and banks; of inadequate financial regulation; and of an ethos of what can only, if undiplomatically, be described as corruption.

Third, there was an acute short-term problem in financial markets. The precise circumstances differed country by country. But the crisis which spread by a kind of contagion from one Asian currency to the next ended in a regional collapse, and at one time looked like precipitating a global one.

The economic typhoon first struck in Thailand. The Thais had made huge economic strides in the 1980s and early 1990s. But their immediate undoing was a combination of large current account deficits and a currency pegged to the US dollar. Something had to give, and on 2 July 1997 it was the Thai baht which, when floated, fell promptly by 20 per cent against the dollar.

The cyclone then moved on through the Philippines, Malaysia and Indonesia, all of which had similarly been running large current account deficits and pegging their exchange rates to the dollar. Their currencies accordingly also now collapsed.

Indonesia, Thailand and the Philippines called in the IMF. In the Philippines, the process of adjustment ran reasonably smoothly. In Indonesia, however, the economic turmoil continued. By the end of January 1998 the Indonesian rupiah had lost 80 per cent of its value against the dollar. Malaysia, true to Dr Mahathir’s instincts of economic nationalism and despite the advice of his then deputy Mr Anwar Ibrahim, sought to resist the logic of the global economy and imposed exchange controls. But by the end of 1997 that country’s economy too had contracted by 7 per cent (compared with an 8 per cent annual growth over the previous decade); the Malaysian stock market had lost 45 per cent of its value; and the Malaysian currency, the ringgit, had fallen by 40 per cent against the US dollar.

South Korea’s currency, the won, was the final victim. In fact, Korea’s underlying situation was substantially different from that of the other tigers. Korea, like Japan though even more so, has evolved a very corporatist style of capitalism, based on the so-called chaebol system of mighty industrial conglomerates. All corporatism – even when practised in societies where hard work, enterprise and cooperation are as highly valued as in Korea – encourages inflexibility, discourages individual accountability, and risks magnifying errors by concealing them. Furthermore, precisely because the Koreans had been so successful in generating a vibrant economy which transformed living standards in a single generation, they were reluctant now to recognise the need for fundamental change. Korea’s business and financial institutions had incurred excessive short-term foreign debts, which there were now far too little foreign exchange reserves to repay. This in turn created a crisis which prompted resort to the IMF for emergency assistance.

East Asian economies recovered strongly in 1999 and 2000. South Korea, Thailand and Malaysia enjoyed rates of growth equal to or exceeding those of 1996. Even unsettled Indonesia’s economy started growing again. Moreover, because of (albeit incomplete) structural reforms, this progress was more soundly based. It seems unlikely that Asian governments will fall again into either of the twin traps of pegging their currencies to unrealistic US dollar rates, or of incurring short-term foreign debts to finance projects that will only yield long-term profits.

So what are the prospects now? East Asian economies – notably Singapore, Taiwan, Malaysia and South Korea – are again having to cope with recession. This time, however, the problem is not home-grown, but rather the effect of the sharp economic downturn in the US. The fortunes of open economies everywhere are always heavily dependent on what happens to their export markets. What policy-makers have to ensure is that the domestic economy of a country is structurally sound, so that it can both cope with bad times and take full advantage of recovery when it comes. These things are much better understood in Asia now than they were in the late 1990s.

Looking further ahead, the tigers will probably not race away in the future as they did in the days of their youthful exuberance: a brisk but steady pace is more likely. It is, after all, generally true, and indeed to be expected, that in their early stages of development economies grow at faster rates than do economies in their full maturity. This is because in the early stages of economic lift-off there are fewer social and regulatory obstacles and there is no legacy of outdated industries to act as a drain on productive enterprise. These advantages do not last. At a certain point, outlooks and institutions change, people’s expectations increase, regulations are imposed, taxes rise, industries move upmarket, workforces increase their bargaining power. But even slower growth in a now large and sophisticated economy brings great and accumulating advance. Above all, given that the other conditions for Asian economic success – small government and a culture that values both enterprise and discipline – are still operating, there is every reason why Asian countries should continue to prosper mightily in the century ahead.

I conclude that:

 There was nothing mysterious about the causes of the 1997–98 Asian economic crisis, even though few predicted it

 Equally, the underlying conditions for long-term Asian economic success are still present and will show through once the current downturn is over.