Author forecasts a cautious resumption of growth in Asia

By Edward Neilan

TOKYO (JP): Always ahead of the curve in anticipating change, historian-author-consultant Daniel Yergin is already talking about "The Asian Comeback."

His forecast is not gushing optimism but a prediction for cautious restart of the things that created the Asia powerhouse in the first place.

"We are likely to see it first in South Korea and Thailand with political reform already leading the way," said Yergin in a speech here.

"By 2000 most of the region will be back on its feet, learning from past mistakes and forging ahead."

Yergin has seen it happen before. "In 1960, India and South Korea were about the same in gross domestic product (GDP). By 1990, South Korea's GDP was 15 times greater than India's."

I have always called that phenomenon "the Korean whammy." Yergin was more astute, giving credit to talent and energy of the people, plus a "get-it-done" attitude that can only be improved through less regulation and more transparent management.

He said a new Korean awareness that cooperation with Western and Japanese corporations will enhance, not hinder, growth will be a hallmark of the reversal of fortune on the peninsula.

Yergin was introduced to a Tokyo audience of businessmen, bankers, reporters and scholars as "a walking think tank" and "renaissance man".

He didn't disappoint. Yergin showed his ability to call a spade a spade without insulting anyone.

A recent parade of Japan-bashers has left Tokyo reeling. Economist Paul Krugman, whose thumb-in-the-eye criticisms and "there never was an Asian miracle in the first place" line have grown tiresome.

U.S. Treasury Secretary Robert Rubin has been as subtle as a trainweck in knocking Japan and U.S. Trade Representative Charlene Barshefsky takes no prisoners. Even glib Deputy Treasury Secretary Lawrence Summers hasn't found out that there is a graceful and effective way to talk to Japan.

And diplomat-turned-Brookings Institution scholar Edward Lincoln should be asked to stand in the corner for his suggestion that the U.S. should be "rude" to Japanese leaders.

Yergin said in answer to a question from the floor that there did indeed seem to be a long pattern of denial that Japan's financial sector was in trouble, based partly on tradition and pride. "They had some denial of allegations that their solutions weren't working," he said. "I think the full attention given to the crisis here now is starting to show results."

Yergin was in Tokyo mainly to promote the Japanese-language version of Commanding Heights: The Battle Between Government and the Marketplace That is Remaking The Modern World (Simon and Schuster, New York, 1998, US$26) which he co-authored with international markets guru Joseph Stanislaw.

The book had sold 554,229 copies in English, mostly in the U.S., as of Dec. 4. In Japan, another 10,000 Japanese-language books were printed last week to bring the total in stores here to 30,000 so far.

"We can't comprehend Commanding Heights in Japanese language," said Hajime Watanabe of Nihon Keizai Corporation, the bookseller here. "We were afraid many people would think it was a novel. We chose Markets vs. States because that is a good theme in Japan now."

He added "We well-remember that the Japanese title of The Prize (Yergin's earlier Pulitzer Prize-winning book) was changed to The Oil Century. That is so straight and good for us."

Watanabe said Market vs. States is slightly different than Market vs. Government used in the English version. "In Japan, 'government' is felt not to be a strong word. That is interesting but true. So we have to choose the word 'States'"

One of Yergin's final themes was right on the money. There is nothing in Japan remotely resembling the huge American policy- formation machine, the informal conglomerate of public and private interests of every shade, that is constantly tossing out new economic plans and ideas."

"Who thinks for Japan? That's a valid question. Where are the think tanks to inform politicians and spur creativity?," Yergin asked.

He also said "China and Russia are two great laboratories conducting great experiments of democratization and open markets."

How they move into the new "globality" -- a term Yergin, who is president of his own Cambridge Energy Research Associates, prefers to the voguish "globalization" -- will have great bearing on the 21st century.

Yergin said a lot of the money market has to do with semantics. He told of the Dutch trader in Thailand some years ago who struck out trying to sell the idea of a "Third World Fund" to Wall Street.

No sale. Then he tried "Developing Nations Fund." Still no interest.

Then he presented the same package with a different, more cutting-edge name -- "Emerging Markets Fund" -- and everyone wanted to buy in.

The writer is a veteran analyst of Northeast Asian affairs and a Media Fellow at Hoover Institution, Stanford University.