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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: Stitch who wrote (3199)	4/19/1998 5:46:00 AM
From: Stitch	Read Replies (2) \| Respond to of 9980

Thread, The following is an editorial that appeared in the Japanese paper, The Mainichi Daily News , an English daily in Tokyo, while I was there last week. It is one of the more coherent comments I have read on the subject of Asian Values. The writer is a professor of sociology at the University of the Philippines. I copy it here for personal use only. Currency Woes symptomatic of a greater ill By Randolf S. David Special to Mainishi Shimbum Dailey News Manila - It is now commonplace to say that the Asia-Europe Meeting (ASEM), whose second summit was held in London on April 3, may have been invented as Europe's answer to APEC. Likewise APEC (Asia-Pacific Economic Cooperation Forum), born during the hey day of the Asian economic miracle, might itself have been intended as the American response to the clout promised by a united Europe. Today, neither APEC nor ASEM seems to be worth anything to Asia when viewed from the perspective of the crisis that is battering its economies. APEC stood helplessly by and could do nothing to restore confidence in the region at the height of the crisis. None of its sunshine scenarios had foreseen the Asian turmoil. It is miserably without any mechanism that can be used to respond quickly to the financial conflagration that has been engulfing the region since July 1997. ASEM's luck, in contrast, is that it is new. Born in Bangkok in 1996, just a year before the crisis exploded right in the heart of Bangkok, ASEM has not been around long enough to commit itself to anything extravagant. Therefore, nothing much is expected from it insofar as the crisis is concerned. A small trust fund of 45 million dollars set up by the European Union to assist the Asian financial sector looks more like a ritual gesture of goodwill than a meaningful response to the crisis. It is a drop in the bucket compared to the 100 billion dollar package that the IMF has recently put together just for Korea and Indonesia. But even so, as gestures go in Asia, it will be long remembered. Before ASEM, Europe had been accustomed to letting Japan and the United States solve Asia's problems. Since the end of the colonial era, Europe has paid but the scantiest attention to Asia. While cashing in on the region's emerging markets, Europe has been quite content with watching the United States lead the way through Asia, politically, economically and culturally. ASEM was launched with the thought that Europe could play a more active role in the region beyond trade matters. What this role might consist of has been the subject of numerous pre-summit conferences. But the equation has dramatically changed since ASEM I in Bangkok. In that first meeting, Europeans had no choice but to allow the Asian Tigers to bask in the glory of their fast-growing economies. Behind that display of confidence was an unstated belief in the Asian way of doing things, a creative mix of modernity and tradition, a nice brew of economic liberalism and political authoritarianism. That combination was best summed up in the ambiguous phrase "Asian values". ASEM II took place against the backdrop of the Asian crisis. Its subtext, however, was the general crisis of so-called Asian values. When Europeans look at Asian economies today, they will not be able to resist sneering at Asian values, which, to their mind, lie at the center of the brittleness of Asian financial systems. Asian values have been used to justify cronyism in business and authoritarianism government. They form the core of culture that emphasizes "know-who" rather "know-how." There is a subtle Western triumphant spirit wanting to express itself here, of course. Even so, no one was expected to raise Asian values as an item for discussion in London. It is an issue as touchy as human rights. But certainly, no one could mistake what is being said when the question of transparency of financial systems is brought up for deliberation. Perhaps at no other time has the linkage between political systems and economic models been closer. One cannot sensibly remark upon, for example, Indonesia's financial troubles today without touching upon the most pernicious aspects of the Suharto dictatorship. Asians, in turn, will persist in keeping the economic and political compartments separate. While conceding the need to strengthen controls in their financial systems, they will not agree to any suggestion that crony accommodation has anything to do with the vulnerability of their banking systems. They will explain the situation instead as the function of a lag - that is, of institutions unable to keep up with the demands of rapid globalization. The consequence of this is that all over Asia today, there is a widespread rethinking of the perils of accelerated globalization. Europe is concerned that the crisis might induce Asia to reverse the liberalization of its economies. At the opening of the 25-nation London summit, host Tony Blair assured Asians that Europe's market will remain open to Asia's exports. It was both a restatement of the concept of open European regionalism, as well as a strong hint to Asia to base its recovery on keeping its economies open. Interestingly, Japan is the only developed country that is a member of both APEC and ASEM. Yet its own internal troubles and systemic weaknesses prevent Japan from playing a lead role in putting developing Asia back on track. Notwithstanding its large contributions to the major bailout plans for the region, Japan is ironically being seen as example number one of the failure of Asian values. Where lies the problem then: Asian values or premature globalization? The answer most likely is a combination of both. By creating consensual societies, Asian values have made possible the most dramatic economic achievements of the 20th century. But globalization is testing the limits of Asian social harmony imposed from above and secured by tradition. Its disruptive effects may sometimes open vital spaces for democracy, but in the short term at least, globalization will inevitably upset the social and economic balance of Asian societies. The current turmoil of the last nine months is clearly only one aspect of a more general crisis.

To: Stitch who wrote (3199)	4/19/1998 4:19:00 PM
From: Worswick	Read Replies (1) \| Respond to of 9980

Welcome back to the shadows of the Petronas Towers! A very good and interesting report. I wonder Stitch if the people you spoke to about investing in assets outside of Japan - what percentage of those peoplke were "affluent" vs. the "little people"? The reason I ask is that I've heard from my Japanese friends that the sophisticated Japanese knowledgeable about the world will invest "outside" yet the bulk of the people will retain their more traditional investments. On another topic did people in Japan have a sense of what Malaya was going through? Or, say Korea? Are your people there going full speed ahead less 17% or more moderately ahead, less 17%. My best, as always,