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.