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

To: Keith Fauci who wrote (5071)	7/6/1998 5:20:00 PM
From: Lee	Read Replies (1) \| Respond to of 9980

Keith, Thread, I went to stratfor and found this interesting write-up on their 1998 outlook. stratfor.com A few quotes: "Consequently, nations are seeking to discover levers with which to manipulate the United States--or at the very least, to get its undivided attention. The fact is that, sooner or later, virtually every nation in the world must deal with the United States on matters that are of fundamental interest to it, but about which the United States is indifferent. This asymmetry of interest is at the heart of a global discontent. It has bred a deep and increasing sense of powerlessness among other nations. From the Organization of Islamic Countries, to the Asian Pacific Economic Conference, to NATO and the CIS, this has become the perpetual sub-text of discourse: what does the United States want and what does the United States plan to do? The answer, usually, is nothing much and nothing lasting. From Paris to Tokyo, the search is on for the means to rivet America's attention and, failing that, for the means to act without the United States. The United States remains serenely indifferent, so indifferent that it is not altogether aware of that very indifference. " ____ "Throughout Asia we have seen the rise of regimes whose primary claim to legitimacy has been their claim to have increased the prosperity of the nation. Throughout the region, ideology, religion and nationalism have been supplanted in favor of doctrines of prosperity. What is to become of regimes whose claim to authority is prosperity when they can no longer deliver? More precisely, what is to become of regimes whose primary mission was the politically expedient distribution of increasing wealth in an era when their new task must be to distribute the burdens of austerity? It appears to us that the logical consequence facing Asia is a massive delegitimation of regimes. In some countries where hardship might be mitigated and social discipline is high, delegitimation might well be avoided--we have Singapore and Taiwan in mind. In other countries, like Malaysia, where a degree of nationalism continues to serve as a social glue, nationalism may forestall disintegration. And in relatively democratic states like South Korea and Japan, the instability might be contained in the political system, if all goes well. But in the best conceivable scenario, two nations in Asia are extraordinarily vulnerable in 1998: China and Indonesia. In 1997, we predicted both economic decline and political unrest in China. We were clearly wrong in our expectation that the absorption of Hong Kong would pose immediate and severe indigestion to China. We remain convinced, however, that China's political stability is in severe doubt. The Chinese Communist Party is morally and ideologically bankrupt. By this we mean that the revolutionary doctrines that made the CCP a charismatic and unifying force have been replaced by a utilitarian justification: China's rulers have increased Chinese prosperity. That increased prosperity has allowed Party officials to create networks of patronage that have become the infrastructure of the country. Networks of patronage are useful in distributing increasing wealth. Those same networks become competing factions in times of decreasing well-being. The leaders of a booming coastal city have an interest in close coordination with Beijing in boom times. When Beijing must transfer wealth from the coastal city to the interior in order to stabilize the political situation there, the natural response is to resist. The allocation of a decreasing pie will inevitably create a system of competition where previously there was a network of cooperation. Where the People's Liberation Army was previously the bulwark of Beijing, it has become an integral part of the network of patronage--a competitor rather than the guarantor of the regime. We therefore expect China to be increasingly torn by factional disputes driven by economic decline. The coastal region will seek to defend its relative economic advantage while Beijing, facing unemployment, regional depression and growing unrest, will attempt to use the remaining surplus to buy time and stabilize the regime. An inevitable divergence of interests between regions will create both regional and class instability. The Chinese situation will become paradigmatic for other countries in the region, particularly Indonesia. " Regards, Lee