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Top Stories from the Editorial/Opinion pages of the International Herald Tribune,
Wednesday, July 23, 1997

Pacific Asians Really Aren't Working Together


By Gerald Segal International Herald Tribune


HONG KONG - A meeting of officials from the Association of South East Asian Nations and their counterparts from other parts of Asia, North America, Europe and Australasia, in the ASEAN Regional Forum on security this coming Saturday and Sunday in Kuala Lumpur, will stimulate self-congratulation about growing regional coherence in Pacific Asia. But the reality is very different.
As the recent political turmoil in Cambodia shows, and the perils of a more assertive China suggest, regional institutions are at best fragile. Of even greater concern to Asians must be the region's repeated failure to tackle economic issues that will define the rules and character of future commerce.
First there is the failure of Asians to cooperate, as they said they would, to defend currencies that come under speculative attack. Devaluations, especially in Thailand and the Philippines, demonstrate that even the Japanese will not bail out fellow Asians.
Second, the pace of global trade liberalization continues to be set primarily by the United States and the European Union. Negotiations on financial services and information technology reveal that once an EU-U.S. deal (sometimes also involving Canada and Japan) is made, the global system follows.
Asian voices, apart from Japan's, are little more than background noise when the new rules are framed for a service sector that accounts for more than half of output in advanced economies and will increasingly characterize the economies of Pacific Asia. Asians will have no one but themselves to blame if they find that the international rules were written in the Atlantic world.
Progress in agreeing on global accounting standards illustrates how EU and U.S. authorities set the agenda and regulations that will govern the world's stock markets. The process of Atlantic leadership is also evident in the 12-year gap between the Big Bang deregulation in London's financial center and early steps in a similar direction in Tokyo.
Third, Asians are absent from negotiations on setting rules for the Internet. Some of the key talks take place at the International Telecommunications Union, but it is American and European governments and especially companies that call the shots. Rules about electronic money and commerce, encryption and tax systems are being hammered out between the United States and the European Union.
Asia has a real interest, because projections suggest that its market in Internet commerce will grow quickly in the next five years. Don't be surprised if Asians are soon complaining that the rules of the superhighway were set in the Atlantic world.
The recent corporate agreement on digital video disc technology suggests more of the same. Europe and North America each have one standard, but Pacific Asia ended up with five.
There seem to be two major reasons for the failure of the region to get organized. One is that most states have only recently become industrialized. They are still enamored of state power and state sovereignty. Such Victorian powers are psychologically ill-equipped to accept the argument that sovereignty needs to be surrendered and pooled for a common good.
There are also deep-seated reasons for regional division. China, with more than 60 percent of Pacific Asia's population, is an obvious candidate for regional leadership, but precisely because of its potential power it arouses much fear. Japan, with stock market capitalization larger than the rest of the region combined, is unwilling to lead and distrusted because of its past record of military aggression.
ASEAN desperately wishes to punch above its weight but remains burdened by a diplomacy of the lowest common denominator.
It is hard to see how such deep divisions can be bridged. One important experiment comes from the Asia-Europe summit process in which Europeans, who coordinate their position, are for the first time prompting Asians to caucus without Caucasians. There is also evidence of growing economic interdependence within Pacific Asia.
But if, as expected, the Asians continue to prove incapable of effective regional coordination, they will have to learn to be much more committed architects at the global level.
The writer, a senior fellow at the International Institute for Strategic Studies in London and director of Britain's Pacific Asia Program, contributed this comment to the Herald Tribune.