Terrorism hits Asia in 2002, but China's economy gives region hope

Terrorism hits Asia in 2002, but China's economy gives region hope

Karl Malakunas, Agence France-Presse, Hong Kong

Islamic extremists extended their reign of fear deep into Asia in 2002, a year that was otherwise dominated by China defying regional economic gloom and stepping up its march onto the international stage.

Undoubtedly the biggest single event during 2002 was the Oct. 12 attack on Indonesia's resort island of Bali that killed more than 190 people and brought the full fury of terrorism into the heart of Asia.

The car bomb blasts, which ripped through two packed nightclubs in Bali's popular Kuta district, claimed the lives of holidaymakers from all around the globe, as well as many Indonesians.

The shockwaves from the attacks, which have been blamed on regional terrorist network Jemaah Islamiyah, were felt far from the shores of Bali's beaches, forcing Indonesia, Australia and other nations to reluctantly address the growing terrorist threat with new laws and security measures.

The massacre also hurt many regional economies, particularly in Indonesia and its Southeast Asian neighbors where the foreign tourist dollar is vital.

The blow to Asian economies came as they struggled to lift themselves out of the turbulence of 2001, when growth in the region fell to just 3.5 percent after its reliance on exports was exposed by the U.S. economic downturn.

In its latest East Asia Update report, the World Bank said economies in Asia recorded 5.4 percent growth in 2002 on the back of export growth.

But Japan's continued failure to lift itself out of the economic mire and the scourge of terrorism were strong dragnets.

China was the most powerful driver of the regional economy in 2002 as it retained economic growth of near eight percent while striving to meet its commitments in its first full year as a World Trade Organization member.

Potentially the most significant economic development this year for the region was the agreement between China and the 10 Association of Southeast Asian Nations (ASEAN) to create the world's biggest free trade area that will embrace 1.7 billion people and two-way trade worth US$1.2 trillion.

The free trade area should be completed between 2010 and 2015 and sparked Japanese and Indian moves to strike up similar deals with ASEAN.

Chinese Prime Minister Zhu Rongji said as he signed the deal at the ASEAN summit in Cambodia in October that it would bring huge benefits to the global economy and lift China's relations with ASEAN to "unprecedented heights".

The signing was a powerful symbol of China's economic and political embracing of the international community, a move highlighted by President Jiang Zemin's week-long visit to the United States where he held a summit with his American counterpart, George W. Bush.

"Jiang Zemin's visit to the United States marks the beginning of a second 'normalization' between China and the United States following (former president Richard) Nixon's visit 30 years ago," Yuan Peng, of the China Modern International Relations Research Institute, said after the October trip.

There were also momentous developments inside the secretive world of China's political system, with Hu Jintao replacing Jiang as the Communist Party's general secretary in preparation for taking over the presidency.

One of Hu's biggest tasks will be to help the world community tackle North Korea, which dominated the last three months of the year after revelations it had restarted its nuclear program.

The developments reignited the nuclear crisis on the Korean peninsula and ended a deal struck in 1994 between a U.S.-led alliance and the Stalinist state in which it agreed to put its nuclear program in mothballs in return for oil and other energy concessions.

It also overshadowed a concerted push by North Korea to rebuild broken ties with neighbors South Korea and Japan, as well as other nations.

In South Asia, India and Pakistan moved to the brink of nuclear war and massed about one million troops on their common border, before a heavy international diplomatic push persuaded them to pull back.

India, incensed at an attack on its parliament in December 2001 blamed on Pakistan-backed militants, raised the stakes to the point that Western governments began pulling their people out of the countries in fear of a fourth war between the nuclear rivals.

In neighboring Afghanistan, Hamid Karzai was installed as president and oversaw a rocky 12 months that was marred by the assassination of Vice President Haji Abdul Qadir in July amid continued violent resistance by Taliban and al-Qaeda forces.

The United States continued to play the dominant role in an international force trying to keep the peace in Afghanistan.

But their failure to capture or kill global terrorist mastermind Osama bin Laden, rumored to be still in Afghanistan or Pakistan, contributed to the growing terrorist threat throughout Asia.