Asia's dependence on senior leaders poses problems

Asia's dependence on senior leaders poses problems

SINGAPORE (Reuters): The heavy dependence of some Asian
countries on senior leaders rather than on government
institutions poses problems of succession, but few are likely to
face difficult transitions when these leaders die, analysts said
yesterday.

The exception may be Indonesia, which has long vested great
power in President Soeharto, who is like "a banyan tree, allowing
nothing to grow underneath", said an academic who declined to be
named.

On Tuesday, wild rumors of Soeharto's death, later denied,
caused the rupiah to fall almost 11 percent to an historic low of
4,600 to the dollar. More rumors yesterday that security around
the presidential palace had been tightened also hurt the
currency.

Experts said political figures in Asia were viewed far beyond
their policy-making roles and were often considered the glue of
the whole national structure.

"It's true of a lot of countries in the region because the
national institutions are pretty weak -- legislature, judiciary,
monetary and regulatory bodies," said Bruce Gale of the Hong
Kong-based Political & Economic Risk Consultancy.

"What we tend to focus on instead are the individuals running
the systems, so that our faith in the system doesn't depend so
much on the institutions," Gale said.

That dependence is why the death of someone like Soeharto
could create panic.

"People don't like uncertainty ... (Indonesian) succession is
unclear, nobody knows what is going to happen," said Neil Saker
of SocGen Crosby.

Soeharto is expected to stay in power despite a call he made
to reevaluate his nomination for a seventh term in office,
analysts said.

The 1,000-member People's Consultative Assembly meets in March
for the presidential vote, but few surprises are expected as he
has retained a firm grip for more than 30 years.

"This is a very monolithic political system where power is
concentrated in one man. He is a master at not showing his hand,"
said Professor Jamie McKie at the school of Pacific and Asian
Studies, Australian National University.

Malaysia's electoral system ensures a much smoother transition
when Prime Minister Mahathir Mohamad retires, said Chia Woon
Khien, head of Asian research at Skandinaviska Enskilda Banken.

"Malaysia has (Deputy Prime Minister) Anwar (Ibrahim) and
people have grown to like him more and feel comfortable and
confident in him," she said.

Added Gale: "The fact of the matter is that if Mahathir was to
die tomorrow, there is a fairly well and widely accepted means by
which his successor will be determined."

Others noted that as recently as September, Mahathir told
leaders of his United Malays National Organisation (UMNO) that
Anwar would succeed him.

Mahathir, 71, has led UMNO, the dominant party in the National
Front coalition, for 16 years.

Even less worry prevails for Singapore, analysts said.

Senior Minister Lee Kuan Yew has had two heart operations and
was hospitalized this year for an acute respiratory tract
infection, but the markets stayed calm.

Lee, 73, premier from 1959 to 1990 and who is credited as the
architect of modern Singapore, has passed the reins to Prime
Minister Goh Chok Tong.

Lee remains a key adviser to Goh and his hand-picked cabinet,
but Goh is clearly in charge. Experts believe the system, founded
on Lee's probusiness, antiwelfare and law-and-order policies,
will continue unfazed.

Elsewhere, Thailand's constant changes in leadership pose some
concerns, but analysts said King Bhumibol Adulyadej provides a
semblance of stability.

"Thailand has a lot of respected statesmen and a king who can
control the military if there is a takeover," Chia said.