October 9, 2003

A GROWING PEACE DIVIDEND: UNITY IN PROSPERITY?

By Tom Plate

Despite problems, Asia moves forward in absence of major war

LOS ANGELES -- Could Asia ever evolve into something like a European Union?

There are signs -- preliminary and tentative -- simmering across Asia of an emerging regionalism that is tamping down age-old backbiting. This trend, should it continue, could propel Asia into the forefront of the 21st century as the world’s dominant continent.

At the annual East Asia Economic Summit, run by the Geneva-based World Economic Forum, that starts this Sunday (Oct. 12) in Singapore, a panel on tensions between China and Taiwan is advertised this way: ‘‘Exchanges across the Straits of Taiwan, just a few years ago dominated by missiles and gunfire, are today primarily exchanges of investment, know-how and business. How did this transformation occur?’’

The answer is that Asia is increasingly focusing on economics, perhaps as never before; political disputes are being handled by diplomacy or quiet deferment for resolution at a later date. Wars disrupt economies, trade and overall wealth aggregation. They are to be avoided like, well, SARS.

It’s an emerging regional philosophy.

Take Tokyo’s effort to negotiate a free trade agreement with Seoul. In the bad old days, Koreans and Japanese barely talked to each other; now, much of the time, they talk turkey. Next month in Bangkok, South Korean President Roh Moo-hyun and Japanese Prime Minister Junichiro Koizumi will map out a timetable for a new tariff-lowering, quota-eliminating bilateral economic relationship.

Economic relations between mainly anti-Communist South Korea and still Communist China are also cooking. Meeting recently, Roh and Chinese President Hu Jintao talked about economic cooperation as if it were the cure for nuclear proliferation, trade imbalances and acne. They evoked images of an Asian economic union. Explained the relatively young South Korean president: “Commodity trade, a low level of economic cooperation, is not enough to help resolve trade imbalances. Thus closer cooperation will be needed.... The Northeast Asian countries will have to develop their relations into a EU-type economic bloc in the long term.’’

In Bali this week, Southeast Asian nations are also talking about economic integration, in part to provide a large, unified playing field for Western investors who increasingly ignore the region for China.

Such vision presupposes the continuation of peace. That’s by no means a given. The boiling-over of nationalist emotions is a constant worry for Beijing, especially if Taiwan formally declares itself the independent nation that in daily life it happens to be. The brilliant South Korean economic recovery -- so improved from the dog days of the regional currency crisis -- would end overnight were North Korea to attack. In South Asia, all investment bets would be off were nuclear-armed Pakistan and nuclear-armed India to go at it.

But note that the Indian stock market broke a three-year high last week. After the 1998 hydrogen-bomb tests that shocked the world and fueled tit-for-tat tests from Pakistan, India could hardly even give away government bonds to foreign investors. Last week its central bank was flush enough to buy back $5 billion of those bonds. Just five years ago, investors wouldn’t have bought them at all had the government not put up such enticingly high interest rates.

Economists are fond of asserting that foreign investors prefer countries where fundamentals are in order (economic factors ranging from currency stability to the technological level of the work force). But fundamental to any country’s prosperity, surely, is domestic tranquility and regional peace. Investors currently so bullish on India would bolt from South Asia like stampeding bears if a Kashmir crisis boiled over into all- out war.

Even Thailand, where the vile Asian currency crisis originated in 1998, is looking upbeat. Indonesia still has problems, as does Singapore, Taiwan and others. Indonesia’s is political: It’s a baby democracy. Singapore and Taiwan have smart leaders who will brainstorm their way out of the downturns, but make no mistake: A prosperous Indonesia helps Singapore, and a peaceful mainland China helps Taiwan.

Another thing: When Japan’s economy looks to be reviving -- its stock market just hit a 15-month high, after a decade of torpor -- you know something serious is happening in Asia.

But perhaps most important is what’s not happening: war, the absence of which is the most critical economic (not to mention humanitarian) fundamental of all. As a Chinese sage wrote in a book on the art of war around 700 B.C., it would be an irony to suggest that Asia has also mastered the art of non-war.

On any continent, the enemy of rising prosperity is war. But precisely because these days there’s so much to lose in Asia, the region’s leaders are prioritizing peace.

The above weekly column has just appeared in the Honolulu Advertiser, The South China Morning Post and The Straits Times of Singapore. The author, Tom Plate, is a regular columnist at these three papers. The column also appears in other world newspapers, including The San Francisco Chronicle, The Seattle Times, The Japan Times and The Korea Times. Email him at: tplate@ucla.edu.

For publication and reprint rights, contact the author directly or John Simpson (john.simpson@latsi.com) of the Los Angeles Times Syndicate International.


Bio Remarks: Tom Plate is a professor of Policy and Communication Studies at UCLA where he founded the AsiaMedia. He is a regular columnist for the Los Angeles Times Syndicate International, the South China Morning Post, The Straits Times and the Honolulu Advertiser. He is a member of the World Economic Forum, the Pacific Council on International policy and the author of five books. He has worked at TIME, the Los Angeles Times and the Daily Mail of London.

Previous Columns:

Asian Images of America and Australia (October 6, 2003)

From Axis of Evil to Twin Dominoes (October 2, 2003)

The Kind of Cuts That Only Hurt China (September 29, 2003)

Blame Game Asia Named (September 25, 2003)