Asia region rises and rerises, phoenix-like during 20th century

By J.L. Hazelton

TOKYO (AP): From tea to paper to gunpowder to AIBO the robot dog, Asia has shared its inventions with the West. And it has made Western concepts its own, from capitalism to computer chips.

Once, Asia meant empire. Mongol. Mandarin. More recently, Japanese. But at the dawn of the 20th century, the region was mostly a motley collection of fiefdoms -- their timber, gems and rubber drained by Western colonial masters.

Today Asia is the world's economic engine, along with Europe and the United States. Fueling that engine is Japan.

There's too much money here, too much ability, and too many hungry people for Asia's economies to just fizzle. Still, two- digit growth rates aren't likely to continue as economies mature, and social and political stresses bring financial fallout.

A tremendously diverse region, Asia has all world religions and a host of cultures. Development levels range from the world's last sealed communist countries, North Korea and Myanmar, to the fat trading states of Hong Kong and Taiwan and the second richest nation in the world, Japan.

Asia saw unheard-of economic growth rates because it opened itself to the outside after World War II. Governments guided industrial sectors and resources, and did not heavily restrict private capital.

"The invisible hand was nowhere to be seen," as Columbia University economist Jagdish Bhagwati said.

Assets today include high educational levels; the speed of the cyber-revolution, particularly in overseas Chinese communities, with Japan lagging, and openness to trade and investment, said Kuniko Inoguchi, a political scientist at Tokyo's Sophia University.

Cultural and historical influences gave East Asia a lead over Africa, Latin America, and the Middle East, some argue.

"Japan, Korea and Taiwan were able to create modern state institutions that were reasonably uncorrupt, reasonably professional, and could focus on national economic development without having all the money siphoned off," said Francis Fukuyama, public policy professor at George Mason University.

That was not the case in much of Southeast Asia, Fukuyama said, although the British left Singapore, Hong Kong and Malaysia with meritocracies and competent bureaucracies.

Giant Indonesia, for example, spent 32 stable, if repressive, years developing under Soeharto's brand of crony capitalism.

Eighteen months after his fall, it could be nearing disintegration, with East Timor's secession vote, rebellions in Aceh and Irian Jaya and a restive military. Still, it is rich in natural resources, and democracy is on the rise.

"In the short term at least, it looks scary," said Arief Budiman, a professor of Indonesian studies at the University of Melbourne, Australia. "In the long term, Indonesia has the potential to be a big giant."

For all the talk about the recent Asian economic crisis proving that the West's model is the true capitalist path, Asian countries are likely to continue to mix and match their economic paradigms.

For example, "Japanese companies can decide to operate at lower rates of profit and with more commitment to their employees than do Western firms," said Ezra Vogel of Harvard University. "They can ... adapt to world changes as well or better than Western firms led by stockholders committed more to stockholders than employees."

There are problems. One is what Brink Lindsey of the conservative Cato Institute in Washington calls "hollow capitalism" -- cronyism, monopolies, and heavy-handed central planning.

And larger issues are at play in Asia as well.

"It has a lot of festering territorial and border and arms race tensions," said Yale University historian Paul Kennedy. "It still has, outside Africa, the world's biggest combination of population and environmental problems."

Asia also remains one of the world's last bastions of communism.

"We still have the (divided Korean) Peninsula, the Taiwan Strait," Inoguchi said. "The Cold War really has not ended in Asia."

While the small but culturally mixed countries with iron leaders known for their anti-Western rhetoric -- Singapore and Malaysia -- are stable now, there's no telling if that will hold after the personalities pass.

The Philippines is fighting what some fear is a return of the cronyism of the Marcos years.

South Korea could be heading for trouble with its heavily skewed birthrate. "When you have a lot of unattached young men, it's usually a lot of trouble for a society," Fukuyama said.

And Japan will be the first country in the world to grapple with the costs of a rapidly graying population.

Some countries have harnessed the traditional family structure to contemporary economics, said Norma Field of the University of Chicago, as in South Korea, where the children of working parents are often raised by their grandparents.

Others, feeling the desperation of those behind in the race, are more rapacious. In Thailand, with the dependence on prostitution, "The cost is in young women," Field said.

Asia has grown too fast for its own good, concentrating money, information and brainpower into sprawling, clogged metropolises -- Tokyo, Manila, Bangkok, Seoul -- hampering movement and leaving the countryside barren, said one of Japan's premiere architects, Tadao Ando.

"The spread of information means the spread of wealth," Ando said.

That is the challenge of the new global economy, with everything for sale online everywhere and waves of money sloshing across borders overnight and unsupervised, said Eisuke Sakakibara, the man known as Mr. Yen in his days in the Japanese Finance Ministry for his influence over markets.

"A post-modern civilization is ahead and we don't know how to cope with it yet," Sakakibara said.

The biggest question may be China, the colossus. It has a diverse population of 1.25 billion and climbing, untold wealth in natural resources, separatist movements, and increasing dissatisfaction with what the communist regime has to offer workers, farmers and the growing middle class.

Its leadership will have an easier time forcing through change than a democratic government would, Vogel said.

China's people, bubbling with new ideas, intellectual growth and dynamism, will ultimately see success, in Vogel's eyes.

Others are not so sanguine about China's ability to deconstruct its inefficient state-owned sector while keeping a lid on social chaos and centrifugal ethnic forces.

"They're walking a tightrope and there's a very real chance of economic catastrophe," Lindsey said.

And what of the left out?

Countries riven by inner conflict, like Cambodia, or utterly reclusive, like North Korea? Shut out for its repressive regime, as Myanmar is, or frozen by uncertainty over how to engage with the world, like Laos and Vietnam?

The financial crisis led to an emphasis on banishing corruption, which is indirectly a focus on democracy, and it sank the myth that Asia's success grew from its authoritarianism. Those developments could help, Bhagwati said.

Without markets, closed to foreign investment, with state- dominated economies, these countries are stuck, Lindsey said.

But anything can happen.

He pointed to South Korea: In the 1960s it was below development levels in West Africa, a hopeless military and economic dependent of the United States.

Now, with the end of military rule, it's a tiger bounding back from the crisis with a 6 percent to 7 percent growth rate forecast this year.

But the rosy promise of a new century hasn't trickled down to everyone.

"People are just excited about the year 2000 because it happens to have three zeros in it. So what?" said Park Chul-hong, 29, a South Korean electrician who's been looking for work for months. "As far as I'm concerned, things will not drastically change in the near future."