Democracy Is Taking a Beating

WASHINGTON — Among the many foreign-policy challenges facing the Bush administration, few loom larger, or are more consequential for global peace and prosperity, than the political and economic troubles dotting the Asian landscape. Simply put, this is not your father’s Asia.

When President George Bush left office in early 1993, the region was brimming with new democracies. Today, nascent democracies in Indonesia, the Philippines, Taiwan, Thailand and Malaysia are engulfed in turmoil. In 1993, the Asian “economic miracle” was the envy of the world. But the 1997-98 financial crisis zapped the region’s confidence and revealed its lingering flaws, which are likely to resurface in 2001 as the U.S. economic engine sputters.

During the 1990s, Asians generally regarded the United States as imperious and overbearing--when not negligent. Nationalism and moves toward pan-Asian trade and economic groupings have been their response. A politicized Islamic movement has taken root in Southeast Asia. Tensions in the region’s potential flash points--the Taiwan Strait, the India-Pakistan border and the Korean peninsula--persist.

Some of these trends feed on each other. It is no accident that the stock markets in Manila, Jakarta and Taipei are tanking as the countries’ political leaders come under attack. In the Philippines, an impeached President Joseph Estrada is on trial on corruption charges. Outside the Senate chamber where he is being tried, demonstrations reminiscent of the “people power” during the last days of the Ferdinand E. Marcos regime take place almost daily. After the first democratic change of power in Taiwan, President Chen Shui-bian is weathering efforts by the opposition to recall him after a series of mishaps and controversial decisions. As Thailand gears up for elections next month, the first under a new constitution, the presidential front-runner, Thaksin Shinawatra, may be prevented from serving, if elected, because of accusations that he filed false financial statements.

But the biggest mess by far is Indonesia. The fledgling democratic administration of Abdurrahman Wahid, faced with continuing economic and financial problems, has been unable to control regional secessionist violence and new Islamic militancy. Led by the Aceh and Irian Jaya regions, many resource-rich provinces are threatening to secede, following the independence of East Timor. Wahid barely survived a no-confidence vote, and a year after taking office, he appears overwhelmed by the challenges. This has added up to a general erosion of authority--including a loss of control over the military--that suggests things will get worse before they get better.

What’s more, some forecasts see economic turbulence fueling the political turmoil in Asia. Much of the Asian recovery has resulted from exports to the U.S. market. If the U.S. economy slows down dramatically, the engines of Asian economic growth--semiconductors, flat-panel displays, cell phones--will slow as well. Neither Japan nor South Korea have come to grips with their banking crises, and, like most Asian stock markets, the Nikkei-225 index has hit new lows recently. Bankruptcies are on the rise in Japan, as some $600 billion of bad loans remain on the books of Japanese banks, with only about 20% of them covered by reserves.

In South Korea, three years after the Asian financial crisis, analysts think some $50 billion will still be needed to clean up its banking system. Reform efforts have been stymied by government pressure to keep some indebted corporations afloat. South Korea’s 8% to 9% growth rate this year is misleading, since it is largely based on exports and consumer spending, both likely to shrink if recession hits.

Economic malaise in Seoul complicates efforts to manage the always dangerous North Korea. The North-South summit in June, which offered hope of a new era of reconciliation, was based, in part, on the political and economic generosity of Nobel Peace Prize-winning South Korean President Kim Dae Jung. A faltering South Korean economy, coupled with Pyongyang’s failure to reciprocate, will constrain Seoul’s ability to help a famine-plagued North. This may lead to a rise in tensions on the peninsula, particularly if, as expected, President Bill Clinton does not make an 11th-hour visit to North Korea to negotiate a deal on its long-range missiles.

At the same time, whatever else the Clinton legacy may be, easing tensions between China and Taiwan is not part of it. Since the victory of Chen Shui-bian and his pro-independence Democratic Progressive Party, Beijing has spurned his overtures and sought to cultivate other political forces in Taiwan. This has contributed to political instability and fear in Taipei, as China modernizes its military and deploys more ballistic missiles on the other side of the strait.

Elsewhere, Indo-Pakistani hostility still simmers despite an encouraging cease-fire in Kashmir. South Asia is a leading candidate for a large-scale war, one that could easily go nuclear. The Bush administration will walk into the middle of this hornet’s nest with little leverage. Pakistan is only a few steps away from entering the “failed state” category, but one with nukes.

President-elect George W. Bush’s comments during the campaign about “humility” and not demanding that all nations “do it our way,” may be a welcome tonic if they become part of U.S. policy toward Asia. Bush wants to bolster ties with America’s friends and allies, a goal well-received in Tokyo, Seoul and Manila. But it will require a rethinking of many aspects of U.S. policy. Multilateral forums like Asia-Pacific Economic Cooperation seem devoid of purpose. Adjusting the U.S. military presence in Asia to meet current and emerging conditions might also be a useful topic for policy review. Not least, the new administration would be well advised to consider more effective means of consulting with Asian nations. Finally, the calendar dictates that Bush will go to China in November for an Asian summit, and an opportunity to put his stamp on U.S. policy toward the region. *