Asian economic crisis tears at political stability<\/p>\n
By Andrew Browne<\/p>\n
BEIJING (Reuters): North Korea lobs a suspected missile over
\nJapan into the sea.<\/p>\n
Violence flares in Cambodia, where rival demonstrators battle
\nwith guns, chains and slingshots.<\/p>\n
In Malaysia, Prime Minister Mahathir Mohamad dumps his heir-
\napparent Anwar Ibrahim amid accusations of sexual misconduct. And
\nChinese businesses are torched in Indonesia, a potential ethnic
\nand religious powder keg.<\/p>\n
India and Pakistan add a nuclear arms race to a territorial
\ndispute that has taken them twice to war; Iran masses troops on
\nthe border with Afghanistan.<\/p>\n
Myanmar cracks down hard again on the democratic opposition.
\nAs much of Asia plunges back into poverty, old political tensions
\nare crackling again and new rifts opening, tearing at the
\nstability that once underpinned growth and raising questions
\nabout whether the region's economic crisis can be overcome
\nwithout serious conflict and bloodshed.<\/p>\n
Suddenly, the old political order across Asia is crumbling,
\naccording to many analysts in the region.<\/p>\n
\"Most regimes in the region have derived their legitimacy from
\neconomic growth. With the crisis, that bond of legitimacy has
\nbeen broken,\" said Alex Magno, a professor of political science
\nat the University of the Philippines.<\/p>\n
\"The credibility of the 'Tiger economy' model is completely
\ndestroyed,\" he said.<\/p>\n
In the go-go days of growth in many parts of Asia, workers
\nwere too busy stitching jeans, packing toys and welding ships to
\npay much attention to politics.<\/p>\n
So long as incomes rose, governments felt secure. No longer.
\nThe middle classes have seen their wealth evaporate along with
\nshrinking currencies and sliding stock markets. And as jobs
\nvanish, millions of workers have lost everything. Two thirds of
\nIndonesia's 200 million people are sliding backwards into
\npoverty.<\/p>\n
Malnutrition is again stalking parts of Asia, sparking food
\nriots. Child beggars are a fixture again.<\/p>\n
Not surprisingly, the Indonesian leadership appears most
\nbesieged. President B.J. Habibie, who took over when Soeharto was
\ntoppled in May after 32 years in power, has recently faced almost
\ndaily protests from students demanding his resignation.<\/p>\n
All across Asia, cosy politics have become a dangerous game,
\nand leaders are having to scramble and improvise as they react to
\ndaily crises.<\/p>\n
The free-market Hong Kong government stunned investors by
\nbuying up a big chunk of the stock market in a titanic battle
\nagainst financial speculators.<\/p>\n
Malaysia, which prospered as an open economy, is clamping new
\ncurrency controls.<\/p>\n
\"Governments are just doing what they can to fill up the
\nmoat,\" said Mark Michelson, Managing Director of Hong Kong-based
\nconsultancy, APCO Asia.<\/p>\n
\"Leaderships are looking for ways to stem the leaks.\"<\/p>\n
In some countries, popular anger at the calamity that has
\nbefallen the region has frozen policy making: politicians are
\nterrified of setting off a riot.<\/p>\n
The Philippine government shelved plans to introduce a levy on
\noil products for fear of a public backlash -- even though the
\nadditional revenue would have given the government more money to
\nspend its way out of recession.<\/p>\n
\"We're in a situation where policy choices made on a day-to-
\nday basis could spark large political struggles,\" said Magno.
\nTrue, Asia has never been an oasis of calm.<\/p>\n
The Korean peninsula has been a flashpoint for half a century,
\nalong with the Taiwan Strait.<\/p>\n
But in many places, peace had followed economic prosperity.
\nCambodia emerged from the killing fields era to hold democratic
\nelections; a Moslem insurgency in the southern Philippines was
\namicably resolved.<\/p>\n
Now fresh political upheavals loom, and while the consequences
\nare as unpredictable as the economic typhoon lashing Asia, the
\ncauses are startlingly clear.<\/p>\n
\"You take any economy in the world and rip the guts out of it,
\nyou will have to expect political and social fallout,\" said Mark
\nBeeson, a research fellow at the Asia Research center at
\nAustralia's Murdoch University.<\/p>\n
\"You can't expect people to operate in a rational way,\" he
\nsaid.<\/p>\n
\"If things get worse all bets are off, particularly in a
\ncountry like Indonesia.\"<\/p>\n
Thailand, where the Asian crisis began a year ago, and South
\nKorea are garnering praise in the West for taking tough political
\ndecisions to reverse their economic meltdowns.<\/p>\n
Indonesia, for now, remains the top concern.<\/p>\n
\"Indonesia will cease as a country as I know it,\" said Bob
\nBroadfoot, the managing director of Political and Economic Risk
\nConsultancy Ltd., a Hong Kong-based think-tank. Broadfoot said a
\nbreak-up of the archipelago nation was on the cards.<\/p>\n
\"I do think, unfortunately, that many more people will be
\nkilled in Indonesia,\" he said.<\/p>\n
One irony in the current crisis is that the Asian country most
\ntipped to fall apart -- China -- has emerged as a pillar of
\nstrength, challenging a politically hobbled Japan for regional
\nleadership.<\/p>\n
Despite possibly the shakiest banks in Asia, and some of the
\nregion's most inefficient industries, China has been shielded
\nfrom international financial turmoil because of its closed
\ncapital markets.<\/p>\n
Taiwan and Hong Kong have been buttressed by China's
\nstability.<\/p>\n
Yet Beijing, too, is grappling with a new and hostile
\nenvironment. A nuclear arms race on its border in South Asia
\nmakes Beijing nervous, more so since India cited China as a
\nthreat to justify its nuclear testing.<\/p>\n
Meanwhile, Iran's armed confrontation with Afghanistan's
\nMoslem Taleban militia, backed by Pakistan, is a new concern for
\nBeijing's rulers, who fear fallout among their own restive Moslem
\npopulation in the far west.<\/p>\n
Not everyone in the region welcomes China's powerful new
\npresence. A strong, assertive China sends shivers through its
\nsmaller neighbors.<\/p>\n
\"If our economies continue to flounder, China will become a
\nstrength in the region,\" said Magno. \"It's a very uncomfortable
\nsituation for Southeast Asia,\" he said.<\/p>\n
\"We are anxious about an assertive China, even though we're
\nlooking to China to help solve our problems.\"<\/p>",
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