Shorenstein Reports on Contemporary East Asia
Number 4
March 1995
Scholars from around the United States and Asia gathered in early March on the University of California Berkeley campus to share insights on the link between economic and political development in East Asia. The central questions, as posed by Associate Director of the Institute of East Asian Studies Joyce Kallgren in her introduction to the symposium, are first, how have the development strategies adopted by certain East Asian countries affected their political systems; and second, what major issues will influence regional stability in the Asia Pacific in the forseeable future, and how should the United States confront them? General responses to that question are reported here in the order that they were presented.
Lowell Dittmer, Chair
Robert Brown, Legal Reform in Vietnam
Joseph Fewsmith, Institutions, Informal Politics, and Regime Transformation in China
Chong Sik Lee, Political Leadership and the Economy of North Korea
Satoshi Ohoka, The New Dynamics of the Japanese Economy
Ying-mao Kau, Political Transformation in Taiwan
Dwight Perkins, Comment
Thomas Gold, Comment
Joyce K. Kallgren, Chair
Kenneth Jowitt, Development Strategies and International Conflict (Summary unavailable)
Brandy Womack, The Basic Parameters of China's World Posture
Andrew Mack, The Political Economy of the Korean Nuclear Crisis
Muthiah Alagappa, Economic Dynamics and International Conflict in East Asia
Jonathan Pollack, Designing a New American Security Strategy for Asia
Paul Evans, Comment
Robert A. Scalapino, Summary
Robert Brown
General Counsel, Brown & Gutterman
Visiting Professor Boalt Law School
University of California Berkeley
Legal reform in Vietnam is part of the widespread evolution of changing relations between Asia and the West. The progression of the relationship between Asia and the West over the past three centuries can be compared to the development of a child. Its "infant" phase, the eighteenth century, was marked by discovery and curiosity. This was followed, in the nineteenth century, by a phase marked by acquisition, like a "toddler" who begins to identify the objects around him as "mine." The rebellious "teenage years" correspond to the period of the early twentieth century into the post-World War II era when Asia separated itself from Western colonization and became independent. We may be seen now as in a fourth, "mature," stage in the West's relationship with Asia-a period of mutual exchange. No longer is discovery, acquisition, or separation the goal; instead we have reached a point where we are trying to understand each other better.
In this fourth phase, legal reform projects have had a great effect on Asian countries, including Vietnam, and are playing a major role in heightening understanding between East and West. There are currently fifteen to twenty legal reform projects in progress throughout the world, conducted by a variety of sponsors including the World Bank, the United Nations Development Program (UNDP), United States Agency for International Development (USAID), Harvard, and the University of San Francisco.
This interest in formalized legal systems stems from the shift in international trade from raw materials to finished goods. Increasingly, countries are no longer in a position to control the supply of goods traded in the international market. (Only those in control of the raw materials can sell them, while nearly anyone can sell finished goods.) The development of a formalized legal system is a crucial step for emerging economies that want to enter this competitive international market, for such a system can serve as a "common language" between Asia and its Western partners.
Alexander Gerschenkron, a Russian-born economist, noted that what attracts money for building infrastructure is a stable government, good relations between business and government, an educated workforce, and capital for infrastructure. The latter comes from domestic savings, as with Japan, or from foreign investment. If emerging economies like Vietnam are going to be able to grow economically and politically, foreign investment is essential. According to all the indicators, foreign investment depends crucially on legal reforms that reflect international standards. Investors are looking for transparency. Transparency means that rules are easily ascertainable and equally applicable to everyone. Those countries that can provide this type of transparency will be able to attract more in the way of foreign investment.
The existing legal framework in Vietnam is a fragmented and conflicting collection of legal norms and institutions that have been adopted ad hoc since 1987 rather than according to any legislative strategy. During the last two years, the Ministry of Justice has decided what laws were necessary by simply circulating a questionnaire to the various ministries and agencies and asking their priorities.
The UNDP is putting in $2 million for the legal reform process. The project will assist the Vietnamese government in establishing a legal framework to support a market-driven economy. Currently, the project is set for two years; it is run by one resident legal adviser who will focus on necessary legal codes, such as corporations, partnerships, contracts, and bankruptcy, and will work with the Ministry of Justice and the Law Department of the National Assembly (both of which were recently established) to see that these laws are enacted and implemented.
This legal reform process in Vietnam does have its detractors. The economic renovations (doi moi) in general are disfavored by the Communist hard-liners and others who are opposed to the legal reforms. The legal reform process is also subject to infighting among foreign governments about the relative merits or drawbacks of the French legal system (on which Vietnamese law was based) and other systems.
In my mind, the most discouraging prospect about the legal reform project in Vietnam is that it is established for only two years and there is only one foreign legal adviser. In contrast, Indonesia's project has been given five years and three advisers. The relevant questions to ask about the Vietnamese project are How much can be done? Will there be consensus in Vietnam after only two years? Ultimately, economic growth in Vietnam depends crucially on legal reform with the goal of transparent laws that will reassure foreign investors.
Joseph Fewsmith
Director, East Asian Interdisciplinary Program
Boston University
Informal politics have generally been linked to some of the least savory aspects of Chinese politics, including personal corruption and the struggle for power. Nevertheless, informal politics have also provided a flexibility and vitality to the Chinese political system that have allowed the country to meet and deal with a variety of social and economic issues. In particular, informal politics have provided an important means by which issues have entered Chinese politics, thereby allowing the political system to adjust to the issues of the day.
As we think about the political succession that China is about to undergo, it is useful to look back on the only other political transition in the history of the PRC, namely, that from the death of Mao Zedong to the emergence of Deng Xiaoping. It is evident that Deng was able to skillfully weave together informal politics, formal position, and a variety of issues in order to secure his own position as China's number one leader. In particular, Deng was able to rally concern about rural issues, industry, and ideology.
For instance, with regard to rural issues, Deng was able to use his relationship with Wan Li, then the party secretary of Anhui Province, to challenge the Dazhai model of agriculture. At the same time, informal groups such as the so-called four gentlemen and the Rural Development group came into being and lobbied for changes in rural policy. Such groups, which had personal connections to high-level policy makers, were critical in protecting the early rural reforms, gathering data, and lobbying for policy change.
Such lobbying was effective in part because the issue of rural poverty had become salient. During the 1973 drought in Anhui, a Xinhua film crew took graphic footage of the poverty and human suffering. When photographs were shown to a meeting of the Politburo, tears apparently came to the eyes of the viewers. The juxtaposition of the continued privation of peasants and the youthful ideals of the aging Politburo member, made rural poverty a salient political issue and helped rural reformers make the case that change was necessary.
Second, with regard to industrial reform, Deng turned to Hu Qiaomu, who headed the Political Study Office in the State Council. This office, which had undertaken the drafting of the notorious "three poisonous weeds" in 1975, had never been dismantled after Deng was purged the following year. It was therefore able to come back to life following the arrest of the Gang of Four. In 1978 Hu oversaw the drafting of an important economic cum ideological statement that ostensibly criticized the Gang of Four but implicitly undermined Hua Guofeng.
Finally, the well-known discussion on practice as the sole criterion of truth depended on Hu Yaobang and his supporters at the Central Party School People's Daily, and elsewhere.
In each of these instances, personal politics was used to mobilize an informal small group that opposed Hua Guofeng's approach and espoused an alternative policy. This process was central to Deng's efforts to oust Hua and emerge as the "core" of the party.
Several parts of this process are of interest. First, there was a campaign aspect. That is to say, there was an articulation of issues, alternative policies, and mobilization of support. Deng did not win political power through backroom deals and then articulate a policy agenda; the policy agenda was articulated through the struggle for power. Second, the struggle for power appears to have accelerated pressures for change. The pressures to articulate different policies tended to broaden, not narrow, the scope of change. Third, there was no effort to compromise with Hua Guofeng. The struggle for power was one to dominate, not to share power.
This brief look at informal politics and regime transformation a decade and a half ago suggests that periods of political transition in China are inherently periods of uncertainty and flux. A wide range of possibility can enter the political system quickly via personal politics, and the resulting degree of change can be much greater than outside observers anticipate.
At the present time a wide range of issues appear ripe for political manipulation: corruption, crime, social order, the influx of peasants into the cities, the decline of state-owned enterprises, decentralization, the growing gap between coastal and inland provinces, and the emergence of a nouveau riche that is perceived to have become wealthy by means other than hard work, as well as broad questions about China's relations with the outside world.
If the imminent political succession follows the pattern of the preceding one, then it seems logical to assume that one or more political aspirants will seek to mobilize support around some of these -- or yet other -- issues in order to assume power. This, in turn, suggests that the succession will be messier and that the possibility of change is greater than generally assumed.
Chong-Sik Lee
Professor of Political Science
University of Pennsylvania
Kim Jong Il is about to be officially installed as the North Korean leader. He may assume either the post of the Party's general secretary, the presidency of the republic, or both. Either way, there is little doubt that Kim Jong Il will remain North Korea's ruler for the foreseeable future.
I wish to address the following questions: Why didn't the North Korean communist system fall with the other communist systems such as the Soviet Union and Rumania? Why will there be a smooth transfer of power in North Korea? What are the principal economic problems Kim Jong Il must address? Finally, what kind of man is Kim Jong Il?
The first two questions can be answered together. I have little doubt about Kim Jong Il's ability to rule North Korea: He has been in power for at least two decades; his father prepared him for the transfer of power; and Kim Jong Il himself has actively consolidated his position in the polity by having taken charge since the early 1970s of the Party's ideology and propaganda. Kim Jong Il has advanced a "theory of political life" that has become the new doctrine in North Korea. The idea, in brief, is that physical life is ephemeral, but a political life is eternal. Political life is given by the Great Leader. Therefore, the continuation of political life requires a successor to the Great Leader.
Furthermore, North Korea will experience a smooth transition of power and political stability for the following reasons:
1. Kim Jong Il has taken control of the army. He has been the supreme commander of the People's Armed Forces since July 1991, and this has given him ample time to fill all key posts with confidants.
2. North Korea's elites are monolithic. Most were educated at the Mangyongdae Institute, the school for the heirs of revolutionaries. They have no other god but Kim Il Sung, and he told them that his son must assume leadership after him.
3. North Korean elites have no viable alternative to Kim Jong Il. They have seen the chaos in the Soviet Union and China after Stalin and Mao. The chaos in effect destroyed the Communist systems. For the elites, a smooth transition of power is a matter of survival.
4. Finally, the Party's control of the people is absolute. No other task has received more attention in North Korea than security-both internal and external-since the Party collapse four decades ago during the early period of the Korean War. The party cannot tolerate any organized opposition.
Kim Jong Il will have to confront the fundamental economic problems facing North Korea. North Korea pursued an autarkic economic policy that has left the country with a behemoth that is inefficient, wasteful, and in large part useless. As O Won-ch'ol pointed out in his analysis, North Korea inherited this policy -- together with the infrastructure and personnel -- from the Japanese colonial government, which had to depend on its own resources after the start of World War II. Although the strategy enabled North Korea to rebuild itself and provide for the people's livelihood in the post-Korean War years, the basic structure of the plan contained within it the seed of its own destruction.
Most significantly, the system was built on an inefficient use of coal and electricity. Almost every sector of the North Korean economy, from the production of fertilizer to vinylon to steel, relies on coal and electricity. Furthermore, North Korea's railroad and buses run on coal and electricity. What made matters even worse was Kim Il Sung's decision, based on security concerns, to bury electric transmission lines. The underground transmission posed problems, namely, additional inefficiency resulting from the need to transmit in relatively low voltage, and leakage at a rate of over 50 percent. The transmission system North Korea installed in the late 1950s and 1960s must therefore be completely replaced. Oil must replace coal as the mainstay of North Korea's economy, but North Korea does not have the hard currency to import oil. The Soviet Union provided 20 percent of North Korea's oil needs, 500,000 metric tons a year, until 1989, but Moscow stopped supplying oil to North Korea under Gorbachev. North Korea's attempt to "go nuclear" and its current negotiations with the United States and South Korea must be seen in this light.
The energy shortage, while the most serious problem facing the North Korean economy, is not the sole problem. North Korea's industrial facilities are dated, parts are scarce, labor is in short supply, agriculture has suffered, and the collapse of the Soviet Union has caused havoc to North Korea's economy. Clearly, Kim Jong Il has his work cut out for him.
What kind of man is Kim Jong Il? An account presented by Ch'oe Un-hui, the famous South Korean actress, and Shin Sang-ok, her husband and a renowned movie director, tells us much about Kim Jong Il. The North Korean government had kidnapped both of them in 1978 and gave them opportunities to produce high-quality movies for the regime. Kim Jong Il, according to the two, is well-informed about foreign countries -- if nothing else, from the many foreign movies he has seen. (He has a vast collection of foreign movies stored in a huge archive with high-tech viewing equipment.) He is aware of the need for new approaches, as evidenced by his relationship with the two South Koreans. He gave them full support and much latitude in their work. Kim is also a man who can laugh at himself, and he is aware that not all the adulation heaped on him is genuine. At the same time, Kim Jong Il's commitment to his father's ideology cannot be minimized. I believe Kim Jong Il will opt for incremental changes, both in foreign and economic policy, while upholding the national ideology.
Satoshi Ohoka
Managing Director & Senior Economist, Japan Development Bank, Tokyo
Research Fellow, Berkeley Roundtable on the International Economy
University of California Berkeley
Since the bursting of the "economic bubble," the Japanese economy has remained in the grip of severe recession. As the Japanese economic performance recovers, a number of structural changes have begun to emerge. Two aspects I wish to examine are the recent economic recovery in the context of structural change and the international industrial networks focusing on East Asia.
When the Japanese economy entered a severe recession in April 1991, the slump spread to almost every sector, from manufacturing to private consumption. At the end of 1993 the recession bottomed out, and with the start of 1994 it began to recover gradually. This was the most critical slump the Japanese economy had experienced in more than fifty years.
The recovery is attributable to three principal factors. First, there was a recovery in personal consumption. A large-scale income tax refund and a lowering of retail prices boosted real incomes. During the summer in particular, unusual heat waves brought significant growth in sales of seasonal goods such as beverages, summer clothing, and air conditioners. A consumption-led recovery is very rare in Japanese postwar economic history. The second factor was a buoyant housing construction market. In spite of the prolonged stagnation in rent levels, sales of detached houses and condominiums have remained firm since 1993, helped by historically low interest rates, among other factors. The third factor was a recovery in exports. Although the yen remains at its strongest level ever, export volume has been recovering gradually since the end of 1993.
Although the Japanese economy has already moved into a recovery phase, the economy will not simply return to its pre-recession state, for the pattern of recovery differs from that of past upturns. First, it is taking place against a background of rigid price stability; and second, economic growth is occurring against a background of structural change in the economy. If anything, the present recovery is driven by mechanisms that did not exist in the past, such as a rise in real incomes brought by falling prices and increased demand generated by the creation of new industries and businesses. In this sense, it may be proper to define the present recovery as a phase in the creation of a new economy.
The present decline in prices is characterized by an inversion of the usual rate of change in consumer and wholesale prices. An analysis of past trends in consumer goods prices on the basis of consumer and wholesale price indexes reveals that the increase rate in the consumer price index has tended to be 1 to 2 percent higher than that in the wholesale price index, primarily because the consumer price has conventionally been set by adding costs, such as personnel expenses and fixed markups, onto the wholesale price. There are two factors behind the present decline in prices. One is the rise in the price competitiveness of imports, reflecting the continued strength of the yen, and the other is stronger consumer lobbying for lower prices.
One of the triggering factors for the present structural change of the Japanese economic system is its increasingly high cost structure. If the gap between domestic and overseas prices is taken as equivalent to the gap between exchange rates and purchasing power parity, then, according to the Organization for Economic Cooperation and Development (OECD) figures for purchasing power parity, Japanese prices were 68 percent higher than the OECD average in 1993, and they were 84 percent higher in 1994. The gap is due largely to the continued existence of sectors not exposed to market principles.
Since the early 1990s, there have been three major changes in Japanese production strategies. One is the upgrading of East Asian product items. Production is moving generally in the direction of specializing in up-scale products and technological research. Another change is the sophistication of the production processes. In the past, components were fabricated in Japan, and production bases in the Association of Southeast Asian Nations (ASEAN) countries were used only to assemble finished components procured from Japan. Japanese-affiliated makers are now introducing fabrication into their production processes in ASEAN countries. As a result, labor-intensive production, once common to this region, is now, to some extent, giving way to capital-intensive production. The last major change is a production shift within the region. Japanese manufacturers, at an earlier time, shifted production to Singapore and Malaysia because among ASEAN countries the infrastructure was relatively well established in these two countries. In recent years, however, labor shortages have surfaced in Singapore and Malaysia, making Thailand, Indonesia, and China increasingly attractive.
Japan has also been building optimum production networks with the emergence of East Asia as a production base and the establishment of global industrial networks by Japanese companies. Since the late 1980s the overseas business strategy of Japanese industries with production bases in the Western and Asian markets has been to build global networks founded on the consolidation of production, sales, and development bases in Japan, the United States, Europe, and Asia. The construction of such networks enables higher efficiency in production and sales on a global scale.
How will the rise in the rate of overseas production affect domestic production and exports? Either there will be an increase in domestic production or the volume of domestic production will be slashed and employment reduced.
If structural changes are to be accomplished smoothly, new industries and businesses must be created. The Japanese economy will achieve new growth if deregulation leads to growth in real incomes and in the creation of new industries.
In the half century since the war, Japan has become a high-cost economy. If new flexibility is to be brought to the economic system, market principles must penetrate the economy.
Ying-Mao Kau
Professor of Political Science
Brown University
Nineteen ninety-five is an ominous year in Taiwan's political history. The year commemorates the centennial of the Manchu dynasty's cession of Taiwan to Japan and the fiftieth anniversary of the Kuomintang's (KMT's) one-party rule in Taiwan. At the same time it will also mark the first direct popular election of a president of Taiwan.
The "economic miracle" of Taiwan has been widely recognized around the world. In the last several years, Taiwan has, under Lee Teng-hui, also emerged dramatically as a dynamic working democracy. Gone are the days of political repression, martial law, and white terror. More than seventy political parties have officially registered in Taiwan in the short eight years since the lifting of martial law in 1987. Since the relaxation of press controls in 1988, the mass media have also become among the most energetic and dynamic in the world.
What is the link between economic development and political liberalization? In Taiwan the link evolved through several stages:
1. The 1950s in Taiwan were a period of "predatory authoritarianism." The KMT was preoccupied with regaining control of the mainland and treated Taiwan simply as a stepping-stone for recuperating its strength for this ultimate goal. The welfare and development of Taiwan for its own sake was not the primary concern of the party's long-term political strategy. But the Quemoy crisis of 1958 forced the KMT to become more realistic about the improbability of retaking the mainland, and the concept of economic development in Taiwan began to carry increasing weight. Such a trend ultimately strengthened the hand of the professionals and technocrats and eroded the monopolistic command of the power holders and party functionaries.
2. "Developmental authoritarianism" eroded into competitive democracy by the 1980s. Several landmark events are worth noting. In September 1986, opposition forces formally established the Democratic People's Party (DPP) in explicit defiance of existing law and KMT policy. In the summer of 1987, the government formally lifted martial law, control of the press, and the ban on contacts and trade with the mainland. In January 1988, Chiang Ching-kuo died of a heart attack, symbolically ending an era of KMT political monopoly. A native-born Taiwanese, Lee Teng-hui, succeeded Chiang Ching-kuo as president of the republic and chairman of the party. The gates of political reform had been swung open.
3. The dramatic rise of an opposition party signaled the structural erosion of the KMT corporatist party state. Before the 1980s, the KMT was able to maintain a highly efficient political machine based on a massive Leninist organizational network in the political arena and skillful management of patron-client politics in the economic sphere. After four decades of continuous rule, however, the party also accumulated problems and baggage: self-complacency, corruption, abuse of power, and arrogance. The liberation of social and economic forces through Lee Tenghui's constitutional reform exposed the factionalism and money politics operating within the KMT.
One of the most shocking cases of political violence was revealed by government prosecutors last December. According to official charges, Cheng Tai-chi, speaker of Pingtung County Council, accompanied by eight gang "brothers," shot a political enemy in a Mafia-style execution at the victim's home. The politics of money and power seems to be equally rampant at the national level. Legislator Oung Da-ming, a business tycoon of the well-connected Hualon Group, was charged last October with stock market manipulation resulting in a $120 million default. When the police showed up at his penthouse office to search for evidence, eighteen lawmakers rushed to his aid, trying to physically block the police from entering. It was widely reported that the eighteen legislators had received political contributions from him or had entrusted money to him in stock manipulation.
In conclusion, Taiwan's future poses many challenges. The breakdown of a corporatist state ushered in a dynamic, pluralistic civil society. At the same time the pernicious assaults on the weakened KMT party machine by aggressive political factions, business conglomerates, and black gangs are creating significant problems for Taiwan's orderly process of democratization.
Dwight Perkins
Director, Harvard Institute for International Development
Harvard University
From what we have heard thus far in this symposium, there appears to be a common pattern to political and economic development in Asia; in other words, the stories, starting with Japan and spreading to China and Southeast Asia -- with the notable exceptions of North Korea and Myanmar (formerly Burma) -- share some similar features.
The transformations we have seen in these countries are driven by economic change, and that economic change effects political change. Furthermore, in most cases, the initial impetus for the economic change is a political event, such as the death of a political leader like Mao Zedong. We have witnessed a cycle of political and economic interaction.
Two fundamental features characterize the shared pattern of political and economic development of these countries:
1. The growth strategy employed by the respective governments was outward looking in that it involved the export of manufactures, not just unprocessed resources. Exporting manufactures, as opposed to oil or wheat, requires an understanding of the concerns of the outside world about, for instance, style, quality, and the like. Understanding the outside world involves the flow of information on all kinds of topics, not just those dealing with trade, and this information flow has profound political implications.
2. The development has been dominated by market forces. In other words, development was not driven by a central plan or the largesse of state government. The development was often funded by state subsidies, but never exclusively. This greatly contrasts with the past, particularly China before 1979, and the pattern in North Korea. A market system fosters decentralization of decision making which in turn loosens the political controls of the authoritarian state. One indication that this is the case is what has happened with those Chinese involved in the Tiananmen uprising in 1989. Many of those disenchanted with the system in 1989 are now making money on their own on Hainan Island or other parts of the country. This is in great contrast to their counterparts of the Cultural Revolution, who had no outlet, economic or otherwise, and just went without alternatives to what the centralized state demanded.
As I have mentioned, the two countries that have rejected this approach to development are North Korea and Burma. What their practices remind us is that Asia's general pattern of development is not inevitable. To see this, you just have to compare the economic and political strategies of Latin America or Africa.
The political implications of this East Asian development pattern are profound. What is to be the American or Western role? The East Asian pattern, we remind ourselves, is driven by internal processes over which we have limited influence. Supplying energy capacity to North Korea isn't necessarily good for opening up North Korea. Cutting off most-favored-nation status (MFN) for China, a country that currently is very open, would probably have the opposite political effect from the one intended.
What we can do is reinforce the process of information exchange. Given the openness and outward-looking nature of East Asian development, our ultimate role should be as a model, parts of which these countries will want to emulate.
Thomas Gold
Professor of Sociology
University of California Berkeley
The surge of fundamental economic and political transitions in countries around the world will be viewed as the distinguishing event of the last decade of the twentieth century. We have been experiencing not just a new world order, but new orders within societies and popular expectations of further change. S. P. Huntington writes of a "third wave of democracy" sweeping the globe. Philippe Schmitter talks of the new proto-sciences of democratization which he facetiously labels "transitology" (from one structure to another) and "consolidology" (consolidation of new structures).
We're all familiar at this point with the East Asian model of economic development. What may be said about the East Asian model of democratization?
1. Political democratization has grown out of, but not preceded, economic liberalization. East Asian societies are characterized by an omnipresent state that to some extent descends from the authoritarian Confucian tradition but that has been bolstered by modern techniques of organization, management, communication, and coercion, all of which have enabled the state to penetrate and dominate all fields of social life, including economy, politics, education, and the media.
The first sphere to experience relaxation of this control is the economy. Relaxation began in Taiwan in the 1950s, gathering steam in the 1960s. In China, relaxation began in the late 1970s and early 1980s. In Vietnam it came a decade later. In North Korea there are tentative signs that relaxation in the economic sphere may now be getting under way. In all these cases, political leaders retained confidence that their ushering in economic reforms wouldn't sabotage their political power. Indeed, these reforms appear to have had a logic of their own. In all East Asian cases, economic relaxation has been extraordinarily, if not miraculously, successful, especially given the odds against success based on overpopulation, lack of natural resources, small domestic markets, etc.
2. Societies have become not only increasingly complex structurally, but also increasingly internationalized. International business transactions, scholarly exchanges, organizations such as the Asia Foundation, United States Information Agency (USIA), Agency for International Development (AID), the media, travel, and other forces have made the sharing of ideas-about democracy among other topics-unstoppable. An inherent element in the East Asian economic model has been bringing foreign businesspeople into these societies and exporting indigenous businesspeople outside. In both cases, there is an exposure to new ideas-about management, autonomy, interpersonal relations, and the necessary role of law and predictability in economic success.
3. The emergence of a civil society and public sphere in East Asia has brought about new forms of social organization wherein individuals need autonomy to conduct business and manage affairs. Political entrepreneurs are emerging. They aren't businesspeople per se; they contribute behind the scenes by advocating for consumer protection, social welfare, and the environment. The public nature of these activities draws the attention of the citizenry, primarily in the cities, but with the potential to spread into rural areas as well.
4. Change within the state, such as the rise of new technocratic forces, is also leading to new openness. The technocrat agenda is not intentionally oriented toward bringing about democratization, but concern that continued economic growth requires state retrenchment from control has a felicitous effect. The legal infrastructure that is arguably needed to attract foreign investors has other benefits as well.
Laws may deal in the first instance with egregious cases of corruption, breach of contract, or environmental pollution, but the longer-term effect is to introduce ideas of individual rights. Witness the efforts of dissidents in China this spring to present petitions to the National People's Congress as guaranteed in the Chinese constitution, something that was tried in 1989 as well. In these cases, as in Taiwan and increasingly in Hong Kong, political entrepreneurs use moribund or neglected legal and political institutions to unintended ends.
At one level this seems to prove that economic modernization brings about social and political changes, but it would be naive not to recognize the human struggle involved in pushing for such changes. The costs have been a great deal of bloodshed, prison, torture, and violation of what we in the West consider fundamental human rights.
Still, economic liberalization has contributed to changes necessary for political liberalization and consolidation or transition. But is there a negative effect back on the economy? After all, democracy is messy. Taiwan and the Philippines have shown this. Foreign investors don't have iron stomachs; they've been scared away. Perhaps the communist party in the PRC provides necessary stability and unity. Lee Kwan Yew, Prime Minister Datuk Seri Mahatir Muhammad, and others have argued that Western-style democracy is unsuitable for Asians, who have a different historical legacy and a culture that bears a stronger affinity with benevolent authoritarianism.
I prefer to see the glass half full and think changes will continue in the direction we in America would cherish and support.
Brantly Womack
Director East Asia Center
University of Virginia, Charlottesville
The impending death of Deng Xiaoping has unleashed a torrent of speculation about the identity of China's next generation of leaders. I will leave this speculation to the journalists. Instead, I will sketch out five parameters that will condition both the capacities and concerns of Chinese leaders in the near future, whoever they may be.
The first of these parameters is the perhaps most important and yet often overlooked fact about China -- its size. Discussing relations between China and its neighbors as if we were talking about relations between equally sovereign entities is patently absurd. Structurally, China's enormity gives it both a potential market of unparalleled scale and the capacity to impose the uniformity necessary for economic development and increased government revenues over an unmatched range of transactions. At the same time, China's size also makes political control exceedingly complex. It's size virtually excludes the possibility of rapidly transforming state and political institutions in response to emerging opportunities -- quite simply, China cannot be nimble.
China's size makes it slow not only internally, but also with respect to its neighbors. China's size will also affect the context of any wars in which it may become involved. Given the size of China's military forces, its neighbors are unlikely to take offensive action against it. Thus, any wars in which the Chinese are involved will in all likelihood be started by the Chinese themselves and fought on the territory of a smaller neighbor.
A second parameter that will structure the context of decision making by future Chinese leaders is the country's centricity. Externally, China is surrounded on all sides by smaller nations that are not military threats for the Chinese. Internally, the concentration of Han ethnic Chinese at the territorial center of the country provides a buffer that strengthens central government action against peripheral territories. This centricity has two consequences. First, given the absence of any pressing foreign challenge and the demographic strength of the Han, the Chinese are able to think first and foremost about the internal consequences of any decision that might be contemplated. Second, when the Chinese do think about bilateral relations with their neighbors, they do so with the assumption of an asymmetry in those relations that favors China. This asymmetry encourages belligerence and uncompromising stands by the Chinese on bilateral issues.
Another parameter that will shape Chinese leaders' behavior in the years to come is resource sufficiency. In terms of natural resources, the Chinese are relatively self-sufficient and thus do not consider carefully the effect of policy decisions on their access to raw materials. On the other hand, China is far from self-sufficient in terms of capital and technology resources. It is on these fronts that the future leadership will need to take the opinions of foreign governments and world markets -- particularly financial markets -- into account.
Separate from the question of resource sufficiency is the issue of resource renewability. The Chinese have long struggled with the challenges of over-population. As economic development proceeds, the stress on renewable resources like water, air, and soil will increase exponentially. This is one of the most difficult issues facing China's leaders; any future leaders who ignore such issues will do so at great peril to the country and to their own political futures.
Finally, the next generation of Chinese leaders will inherit a complex historical legacy that will substantially shape the premises of their decisions. The first of these legacies is the recent period of policy and institutional inertia that will have to be overcome to achieve future goals. The second legacy is the public memory of the leadership and elites throughout Chinese society. This public memory has two central components: the painful memories of the disunity created by the Cultural Revolution and the post-Cultural Revolution recognition of the centrality of economic modernization. The scars of the Cultural Revolution and fears of economic backwardness will continue to inform debate among the leadership about future policy choices. Policy choices will also reflect two recent historical events that have come to form a crucial learning experience for all the current contenders for political dominance-the collapse of the USSR and the events surrounding the massacre at Tiananmen Square. Together, these events will substantially influence any future discussions about the pace of political reform, regardless of which parties are at the table.
Andrew Mack
Chair International Relations, Research School of Pacific Studies
Australian National University, Canberra
On 21 October 1994, after some five years of controversy and eighteen months of on-again off-again negotiations, an agreement was signed between the United States and North Korea that, in principle, resolves the Korean nuclear crisis. There remains, however, considerable skepticism about this agreement. While the agreement is certainly less than ideal, careful analysis indicates that critics overstate its risks and substantially underestimate its benefits. At the same time, there are a number of less-publicized issues that do not auger well for the future of the agreement.
Consider first the argument that the agreement sets an exceedingly dangerous precedent by rewarding rather than sanctioning a violator of the Nuclear Non-Proliferation Treaty (NPT). This argument ignores the fact that the North Koreans are giving up far more than they are getting. The opportunity costs in terms of foregone trade and investment, Japanese reparations, and access to international financial institutions far exceed the $4 billion over some nine years that the October agreement guarantees. Second, North Korea has agreed to dismantle its gas-graphite reactor and reprocessing facilities, neither of which is prohibited under the NPT. Third, and perhaps most tellingly, it is hard to imagine a case other than North Korea in which a neighboring state would be willing to pay what amounts to a multi-billion dollar bribe to a would-be proliferator. South Korea is prepared to pay largely because it believes that reunification is inevitable and thus views the light water reactor (LWR) project as an investment in its own future.
Another common complaint about the agreement is that the safety of the project is overstated. Again, the critics seem to have not examined the agreement with sufficient care. The gas-graphite reactors that the LWRs will replace were fueled with locally supplied unenriched uranium. By contrast, the North will have to import enriched uranium to power the LWRs. (The North is prohibited from enriching its own uranium by a 1991 agreement with South Korea.) Nonproliferation objectives could easily be ensured by emulating the Soviet/Russian practice of renting fuel rods to Pyongyang. As the North would have to return the spent rods, any attempts to produce weapons-usable plutonium would be immediately detectable, and the North would receive no more nuclear fuel.
Moreover, critics have systematically downplayed the consequences of a failure to secure agreement. Absent any agreement, stiff economic sanctions or military action would almost certainly have followed. Such tactics would at a minimum have led the North to quit the NPT permanently; they would also have created the real possibility of a disastrous war across the entire peninsula.
One element of the agreement that has received a great deal of criticism is the five or so years' delay before the North is required to comply with the most critical of the agreement's inspection provisions. There is also within the framework of the agreement nothing to stop the North from secretly completing the "weaponization" of any plutonium that has already been diverted. On the other hand, it was clear from the earliest stages of negotiations that, given its deep suspicion of U.S. intentions, Pyongyang was unwilling to sign any agreement without retaining for itself some leverage, which the inspection issue and timetable provides.
Despite the overblown rhetoric of the criticisms leveled at the agreement to date, I suspect that the agreement will ultimately fail, but for reasons other than those currently being voiced.
First, there are a number serious implementation obstacles to which solutions do not appear forthcoming. On the one hand, the North Koreans are adamant in their refusal to accept reactors manufactured in South Korea. On the other hand, conservative pressure in the South may scuttle the agreement should the North fail, as seems unlikely, to reverse its stance on this issue. More generally, the North has been equally stubborn in its refusal to negotiate with the South directly, a point that the United States and South Korea seem to have tacked on to the agreement.
Even if these implementation issues are overcome in the medium term, a much more profound problem remains. The North's ultimate willingness to bargain seems to have coincided with a realization that the economic costs of remaining outside of compliance with the NPT were too high to bear. Unfortunately for the North Koreans, the agreement is unlikely to halt the rapid collapse of their economy. Gross domestic product (GDP) has fallen about 5 percent a year for each of the past four years. While political restrictions on investment in North Korea have now been lifted, there is little reason to expect a flood of foreign investment to ensue. Absent an unexpected economic recovery, the North is likely to conclude within a few years that continued compliance with the agreement is not worth foregoing the nuclear option.
Of course, this last scenario also opens the door to another possibility. If the North's leaders cannot stabilize the economy, their regime is likely to become increasingly unstable. As the possibility of a regime collapse in the North increases, the nuclear issue on the Korean Peninsula would be radically transformed. Unfortunately, the nature of such transformations is all but impossible to predict.
Muthiah Alagappa
Senior Fellow, Program on International Economics and Politics
East-West Center Honolulu
Five key features mark the economically dynamic Asia-Pacific region:
1. rapid but uneven growth of national economies, with the East Asian economies growing the fastest
2. deepening interdependence in the areas of trade, investment, labor, education, and tourism, with interdependence asymmetric in many cases
3. multilateralization of economic relations, as shown in the gradual but clear shift away from a U.S.-centered to a more diversified pattern of trade and investment
4. persistent structural imbalances that give rise to frequent economic disputes, generating political tensions
5. increasing desire among states to institutionalize their growing interdependence through international organizations
The security implications of the economic modernization occurring in this area can be conceived on at least three levels: first, their effect upon conflicts at the domestic level; second, their effect upon the identity and interest of states; and finally, their effect upon the structure of the international system and what this means for international security and stability. I will confine my remarks to the second and third points.
Mitigation of the Security Dilemma
The elevation of economic development in national priorities, the adoption of outward-oriented strategies, and success in this endeavor have mitigated the international security dilemma in the Asia-Pacific region in several ways.
First, the pursuit of economic modernization through outward-oriented strategies places a high premium on a stable and healthy international environment. All countries acknowledge the need for a secure international environment and have a vested interest in preventing the outbreak of violent conflict.
Second, deepening interdependence in East and Southeast Asia has increased the cost and raised the threshold for using force. The economic cost of withdrawal or exclusion from the system, which will inevitably accompany a massive use of force, will be high. The associated political and diplomatic cost will be high as well, especially for countries like China and Vietnam, which are trying to establish their credentials in the international community. Further, as countries have become more developed, the physical damage likely to be suffered as a consequence of war has increased.
Third, growing economic power has enhanced the viability and deterrence capabilities of medium and small states, thereby reducing their insecurity. Specifically, increase in the power of Taiwan vis-�-vis China, South Korea vis-à-vis North Korea, and Singapore vis-à-vis Indonesia and Malaysia has enhanced their survival prospects. Not only will the cost of military action against them be enormous, but there is also no guarantee of success. Taiwan, South Korea, and Singapore have, with some success, also used their economic power in strategic ways to enhance their security and standing vis-à-vis their rivals.
Fourth, convergence in economic identities, goals, and strategies provides common bases for discourse and interaction among states in the region. It further erodes the international relevance of the remaining differences in political systems and provides a mutually valued means to engage and integrate previously excluded countries into the regional system. Through such engagement these countries will begin to develop a stake in the status quo. The adoption of market economic principles, commitment to economic modernization, and its pursuit through outward-oriented strategies may be viewed as a basis for the development of a normative order in the region.
Fifth, institution building in the economic domain can spill over into the security realm. The Asia Pacific Economic Cooperation (APEC) summit meetings and declarations (Seattle, Bogor) may be viewed as indicative of interest in and commitment at the highest political level to sustaining economic dynamism and peace in the Pacific. Over time such and other contacts may contribute to the building of trust and confidence and to the gradual emergence of a common identity and interest. These may stimulate comparable efforts in the security domain. As APEC and the ASEAN Regional Forum (ARF) forge ahead with specific work programs, the prospects for one feeding into the other are likely to improve. But economic institution building is still embryonic, and there is no guarantee that it will prosper at this level.
Finally, concern with economic modernization and deepening interdependence has helped or is helping to ameliorate, in varying degrees, traditional antagonisms (Japan-Southeast Asia, China-Japan, Japan-Korea Singapore-Malaysia) and stabilize some disputes (China-Taiwan; China-Japan over Senkaku). Economic considerations, however, have not transformed or resolved any specific dispute or conflict. In fact, some political disputes have prevented the development of potentially beneficial economic ties, for example, between North and South Korea, Russia and Japan, and Pakistan and India.
Destabilizing Consequences
This limitation of economic imperatives in resolving political disputes leads to the discussion of several other consequences of economic development, some of which may be destabilizing.
First, and not necessarily negative, the economic dynamics of the region are not always in harmony with the existing security arrangements. Shift in the configuration of economic relations has generally had the effect of diluting the U.S.-centered security network in East and Southeast Asia. Doubts have been raised about the reliability of U.S. security commitments. Further, though U.S. military presence and security commitments are still valued, the East and Southeast Asian countries have begun to explore other ways-multilateralism, self-reliance, constructive engagement of other powers-to diversify arrangements for peace and security in the region. Though this process will be characterized by some uncertainty, it will be gradual and not necessarily destabilizing. It should be noted here that although economic tensions may at times be high (as between the United States and Japan, and more recently between the United States and China) and over time erode the vitality of security arrangements, on their own such tensions are unlikely to lead to military conflict.
Second, the rising power of Japan and more significantly that of China have generated security concerns in the region. Security concerns in relation to China are on the rise and have been further fueled by Chinese behavior in the Spratlys. But such concerns have yet to find concrete expression in terms of either threat perceptions or policies. The rise of Japan and China may, to a degree, revitalize the U.S. security network in the region, counteracting the dilution induced by economic disputes.
Finally, sustained high growth rates and the need for greater self-reliance (in conjunction with several other factors) increased in absolute terms the resources allocated to the defense sector in most East and Southeast Asian countries. As their economies expand and if the need arises, these countries are well-placed to spend even more on defense. As of now there is no arms race in the region, although some observers have characterized the recent acquisitions as such. But clearly the resource potential is there.
Predominance of Security-Promoting Effects
Three conclusions may be drawn from the above discussion. First, although the consequences of economic modernization are mixed, on balance it is possible to argue that the stabilizing effects outweigh the destabilizing ones. In the short to medium term, there is a common interest in preserving a peaceful environment to facilitate economic development. A longer-term stabilizing effect of economic modernization is the appreciable rise in the cost and hence the threshold for using force. By enhancing the viability of small states, strengthening state capabilities, and promoting regionalism, economic modernization also facilitates the development of a society of states in the region. Taken together, these developments can be said to have had a stabilizing effect. Their effectiveness, however, is greater in preventing the outbreak of violent conflict than in resolving disputes.
Second, the foregoing does not imply that countries in the region have become trading states or that military power has ceased to be relevant. On the contrary, the East Asian countries, including Japan, display a acute sensitivity to the distribution of power and changes in it. They are also building up their individual military capabilities.
Third, economic growth in East Asia and the dynamics it gives rise to, in conjunction with other developments like the end of the Cold War and domestic political changes in key countries, have begun a process of reordering the power, prestige, and influence of states in the Asia-Pacific region, as well as making for significant changes in their security interests.
Jonathan D. Pollack
Senior Advisor International Policy, The Rand Corporation
Santa Monica, California
East Asia will be a central location for the events that shape the future of our world in the coming years. Here I focus my attention on the question of what role the United States should strive to play in the region.
This topic, of course, begs the question of why we should care about the U.S. strategy in the region. I think that the case for developing a coherent U.S. strategy toward East Asia is a compelling one. The United States continues to have a unique capacity to influence events in the region. If we do not take measures to make good use of this influence we will have to live with whatever Asia emerges. Such an abdication of our influence would increase the risks that U.S. strategic interests in the region would be undercut by events beyond our control.
What are these interests? I think we can identify at least five: first, to deny any single state a position of dominant influence over events in the region; second, to prevent destabilizing influences in the region from spinning out of control; third, to ensure the continued expansion of free trade across the region and of U.S. access to East Asian markets; fourth, to encourage political openness and economic opportunity for all the region's inhabitants; and fifth, to ensure that incentives to cooperate with the United States are sufficient.
Some Alternative Strategies
What strategy should the United States adopt to pursue these interests? One possible strategy is the position of strategic autonomy. This view assumes that the United States can mobilize sufficient resources within its immediate sphere of influence to avoid dependence on or commitment to any other region of the world. This option is neither credible nor realistic given the set of American interests outlined above.
Liberal internationalism is a second possible strategy for U.S. policy makers. In this view, the United States should pursue its interests through free trade and check the instinct to pursue its interests through coercive institutions. This approach is premised on assumptions about the capacity for collaboration in the region that are, at a minimum, premature. While one can imagine a world in which a united Korea, China, Japan, and Russia maintain collaborative, mutually beneficial ties with the United States and view security cooperation as an essential activity, the bare minimum standards for such a world are hardly approximated in the current state of affairs. Liberal internationalism thus remains more an aspiration than a strategy.
A third possible strategy is the policy of preemptive containment. This strategy is focused squarely on China, given that it is the only state with the requisite ambitions, long-term potential, national autonomy, and prospective military power base to even remotely emerge as a possible strategic challenger to the United States. This view requires that we prepare now for the inevitable day when China has "arrived" militarily.
This strategy has a number of serious flaws. First, it fails to ask whether there is sufficient regional support for such a strategy. Given the increasingly close economic links between China and its neighbors, the depth of such support may well be shallow. Second, preemptive containment may well give the Chinese military more credit than it deserves. Third and most critically, a policy based on the assumption of an inevitably hegemonic and hostile China may encourage its emergence. Given the uncertain outcomes of the looming societal and institutional transformations in China, it makes little sense to base U.S. security policy on the bet that a single outcome is foreordained.
A fourth, and I believe preferable, U.S. security policy choice is a hedging strategy. This strategy does not pretend to predict in advance a world of perpetual peace, a hegemonic China, or an endlessly shifting balance of power. Instead, it takes an agnostic position toward ultimate regional outcomes. Hedgers contend that what the United States does and signals now will shape, perhaps in decisive ways, the prospects for regional stability and security and the disposition of regional states to work closely with the United States over the longer term.
Of course, to posit an uncertain future is not enough: there is a need for all to understand what matters to the United States, and we must he prepared to commit significant resources to realize such ends. This strategy therefore seeks to furnish the United States with the means and incentives to build for the longer term. In essence, the strategy is more of a bridge than a hedge.
Components of a Hedge Strategy
A hedging strategy must meet at least three essential challenges: first, to maintain our capability to address extant threats to stability; second, to redefine current alliance arrangements in a manner appropriate to changing circumstances; third, to establish the means to engage more effectively with emergent actors.
In addressing these challenges, efforts should be focused on managing the following uncertainties, in descending order of importance. First, we must be prepared for a range of emerging possibilities in China's institutional arrangements, strategic orientations, and military capabilities, some of which are genuinely worrisome. To this end, we need to find effective ways to engage the Chinese military leadership, as Secretary of Defense William Perry has begun to do. Second, we need to consider a variety of possibilities on the Korean Peninsula, ranging from the continuation of the status quo to severe instability and unification. It is important for us to consider now the implications of a unified Korea. Third, we have to monitor closely Japan's continuing struggle for internal political definition and its consequent effects on the country's future international strategies. On this score, the United States needs to encourage the Japanese to develop the institutions befitting so powerful a nation. Fourth, we need to take steps to encourage the emergence of a broadly legitimized intraregional security structure, particularly in Northeast Asia, where one is sorely lacking. Finally, we should not ignore that Russia's wrenching transformations will have a major effect on China and other regional powers.
Such a diversified and artful hedge strategy is likely to gain acceptance across the region as a whole, including with the Chinese. It is also far more likely to permit maintenance of a sufficient level of U.S. military activity to make far less likely the possibility that U.S. allies and security partners will opt for autonomous strategies. Absent an appropriate level of U.S. military capabilities and political-military engagement, a hedge strategy will be seen as largely toothless and noncredible, both by our regional allies and by the Chinese.
Paul Evans
Director, Joint Centre for Asia Pacific Studies
University of Toronto-York University
Brantly Womack
Professor Womack has provided us with a sweeping view of the challenges facing China's next generation of leaders. I wholeheartedly agree with the challenges he has enumerated, although I believe he has overlooked one crucial challenge. China's internal economic development, an absolute prerequisite for the country's full integration into the world economy, is going to require an accompanying process of social transformation that will be even more profound than that which occurred in China around the middle of the nineteenth century. Perhaps the most wrenching aspect of this impending social transformation is the challenge of reconstituting village and local political structures. This is a vexing problem to which China's next generation of leaders is going to have to devote considerable attention.
Andrew Mack
I want to stress one point in Professor Mack's presentation that I think perhaps more than any other makes clear the ultimate instability of the recently concluded accord on North Korea's nuclear policy. While the North Koreans were able to obtain some breathing space for themselves through the agreement, the accord itself is premised on the assumption that the only true solution to the nuclear problem is the transformation or collapse of the North Korean regime. Thus the accord has done little more than contain for the moment one of the most troubling security problems in East Asia.
Muthiah Alagappa
I would like to commend Dr. Alagappa on his conceptualization of complex interdependence in East Asia. But a full understanding of what is occurring at the regional level must move beyond economic "interdependence" to look at the dimensions of economic "integration." Trade within East Asia is increasing dramatically. More spectacular is the increase in intraregional investment and the growth of transnational production networks in manufacturing and agro-business. Regional economic integration has been created not through a common currency, bureaucratic structure, treaty system, or regional political identity, but instead through reciprocal policy adjustments that have set the scene for private-sector dynamism. States are important actors in establishing domestic stability and in making reciprocal policy adjustments that promote economic growth. Some of the strategic implications of this kind of economic integration are (a) that national economies are more deeply interconnected than at any time in history; (b) that calculations of costs and benefits of the use of force are substantially altered; and (c) that East Asia currently lacks regional economic and political institutions to manage major regional conflicts.
Jonathan D. Pollack
I would like to pose three sets of challenges that I believe must be addressed by those seeking to build a coherent hedging strategy for the United States. First, what is the global order that the Chinese leadership would like to see evolve? It is relatively clear that the Chinese accept the logic of interdependence in economic affairs, as evidenced by their positions in recent economic negotiations. In security matters, however, their preferences are much less clear. No hedging strategy will succeed unless it can somehow manage to clarify these preferences or at least conceptualize responses to the feasible range of Chinese security objectives.
Second, a hedging strategy based on a continuing forward deployment of U.S. troops in the region must contain a more clearly articulated justification for such a presence than was presented by Dr. Pollack today. Absent such a justification, the fate of the U.S. forward deployment will remain vulnerable to ever-increasing budget pressures and trade imbalances.
Third, an effective hedging strategy must make clear how the United States can go about encouraging the emergence and consolidation of multilateral institutions in Northeast Asia commensurate with an international relations environment increasingly characterized by multiple centers of power. In other words, the hedging strategists must be able to specify a set of policies that will enable us to build a workable multilateral order that can forestall the inevitable violence that some predict in the coming "Asian century."
Robert A. Scalapino
Robson Research Professor of Government, Emeritus
Director Emeritus, Institute of East Asian Studies
University of California Berkeley
Here I would reiterate the major themes presented and add a few comments of my own regarding the security challenges posed by current and near-term developments in East Asia.
Central Symposium Themes
1. The quest for economic development continues to dominate the regional and global scene. Irrespective of political system, leaders are increasingly committed to pragmatic, results-oriented policies, knowing that they will be judged by performance, not ideological rhetoric. A market orientation is in clear ascendancy, with "socialism" retreating. Yet harmonious coexistence among market economies coming from different cultural traditions, at different states of development, and pursuing different economic policies continues to pose a challenge. In this setting, the roles and relationship of the United States and Japan, two advanced nations now advancing toward further internationalization and service-oriented economies, will be critically important.
2. Development, and especially rapid development, harbors destabilizing as well as stabilizing elements. The increased pace of change challenges values and cultures. Generational differences are accentuated. Moreover, Asia's economic strengths are accompanied by fragile political institutions. Stability depends heavily upon personalities; generally, rule is by men, not law. Thus, the strengthening of political institutions is a prime need in the course of the coming years.
3. Differences among political systems will continue to persist in the region, reflecting both cultural and developmental diversity. In general, three regime types in East Asia can be identified. First, the Leninist system survives, although that system is being forced to undergo modification under economic pressures and the need for greater interaction with others. A second system, that of authoritarian pluralism, is characterized by a political order under some degree of constraint, but a civil society emerging from the state with an element of autonomy and a mixed economy with the market playing an ever more important role. The third system, that of parliamentary democracy, while fragile, now characterizes a growing number of East Asian states, among them Japan, South Korea, Taiwan, the Philippines, and Malaysia. Their current experiments with political openness, beset with many difficulties, are critical to the Asian future.
4. Today, security begins at home. Many of the most serious security issues in East Asia at present relate to internal conditions. Ethnic, religious, regional divisions-in some respects, heightened by the trauma of development with its intensely materialistic concerns-threaten the social fabric of the society. Individuals, their moorings torn loose, search for a more meaningful community. And the widening gap between the affluent and the poor exacerbates the situation.
5. The secular state, under attack both from below and from above (new regional and international institutions), strikes back, seeking to use nationalism as an appeal and a weapon. In various forms, nationalism is rising in East Asia, sometimes taking militant forms. One by-product of relevance to U.S. foreign relations is the demand that partnership replace patron-client relations as the mode of cooperation between the United States and its East Asian allies.
While a number of subregional issues involving territorial disputes exist alongside domestic instabilities to threaten peace, the growth of interdependence among states together with the internal problems confronting all major nations should serve to ease the potential for large-scale conflict in the region for the foreseeable future.
Specific Subregional Security Threats
1. The Kuril Islands. Given the current weakness of both the Russian and Japanese governments, it is difficult to envision a resolution of this dispute, although in theory a compromise should be possible, based on the October 1956 Russian proposal. Yet it also seems highly improbable that the issue will lead to open conflict, given the fact that the stakes are relatively low. For the time being at least, the status quo will hold.
2. The Korean Peninsula. Given the many variables and the current fluidity of the situation, predictions regarding the future of this highly volatile issue would be unwise. Logic, however, would dictate that the North, in the light of its deep economic problems, would both persist in efforts at cautious economic reform and pursue political policies directed to that end. A resort to conflict, given the firmness of the U.S. commitment to the South, would be to elect suicide-a course rarely consciously taken by any political elite. Nevertheless, the path ahead is likely to be tortuous.
3. China-Taiwan. Despite the advent of major economic and cultural relations between these two societies in recent years, the political gap remains wide and, in institutional terms, has deepened. Can the PRC commitment to "one country, two systems," totally unacceptable in its present form to the people of Taiwan, be altered? Can an idea such as commonwealth be advanced? In any case, the two sides appear to be creeping toward widening dialogue, and Beijing is at present inhibited from a resort to force by many factors, despite its reluctance to compromise on key political issues.
4. The Chinese domestic situation. China's strength or weakness, unity or disunity, will seriously effect all of Eurasia. At present, a number of challenges, both economic and political, confront the society. Can the center regain macroeconomic control of an overheated economy? Can a growth rate be maintained such that it will absorb the vast rural unemployed population without unreasonable inflation? Can the ailing state-owned enterprises be reformed, and can corruption-so omnipresent today-be contained? Can a federal system be institutionalized, one allocating power appropriately among center, region, province, and locality? As the third and fourth generation of leaders come to power, can a more collective leadership prevail, or will another power struggle ensue? While the answers to these questions are not clear at present, it seems likely that in the decades ahead China will reach the status of a major power, but a major power with major problems-problems not to be quickly or easily resolved. Perhaps this situation will serve to contain the proclivities of a militant nationalism that is now a prominent feature of the Chinese scene.
In conclusion, I want to side, cautiously, with the optimists among today's speakers. Like other parts of the world, East Asia will continue to experience violence in many forms, domestic and subregional. Given the developmental priorities of every nation, however, the rising interdependence, the growth of new regional and global mechanisms for dialogue and decision making, and, not least, the pressing domestic problems, the risks of global or even all-regional conflict are the lowest in this century. Meanwhile, the continuous advances of the scientific-technological revolution, while not without their destabilizing factors, offer hope of more effective approaches to such overarching problems as population and environmental issues. Let the pessimists take hope!
Rapporteurs: Ken Dubin and Laura Strausfeld
