Sunday, October 3, 2010

Asia Alone: The Dangerous Post-Crisis Divide from America

Birds of a feather, flock together no more....

Asia Alone: The Dangerous Post-Crisis Divide from America
by Simon SC Tay

More than ever, it appears the 21st century will belong to Asia. More specifically, it will belong to China, with the rest of Asia scrambling to find a secure orbit within the giant's enormous gravitational pull. For author Simon Tay, it's crucial that the United States remains part of the Asian geopolitical solar system.

A self-described public intellectual, Tay is a card-carrying member of Singapore's great and good. He's a former member of parliament, chairman of the Singapore Institute of International Affairs, and double professor at the National University, with global street cred as a darling of the Asia Society and (the World Economic Forum at Davos), plus a book cover quote from world
heavyweight champion public intellectual, Fareed Zakaria (Newsweek, Time et al).

Despite his pretensions of globalism and pan-Asianism, in the end, Tay's prescriptions and conclusions in Asia Alone reveal him as just another Singa-parrot, a well-educated, well-traveled one for sure (if you forget, he'll remind you). Tay is a bird of a feather with Lee Kuan Yew and a blatant proponent of Singapore's national interests while pretending (or assuming) they represent what's best for all of Asia. Singa-parrots function as an echo chamber for the only voice in Singapore that matters, repeating Lee's ideas so it appears that scores of other great minds have reached the same conclusions independently.

Tale of two crises
Asia Alone gets off to a great start, presenting a tale of two crises. When Asian economies tanked starting in 1997, the US and Western-led institutions such as the International Monetary Fund (IMF) prescribed austerity. The IMF insisted on government
budget cuts and market reform measures, such as reducing aid to and even ownership stakes in government-owned enterprises, slashing subsidies to consumers on essentials such as food, fuel and electricity, and raising interest rates.

Those prescriptions from the so-called Washington Consensus seemingly made the situation worse, adding social and political unrest to the economic woes across Asia. Tightened lending policies forced
bankruptcies, further raising unemployment. "IMF means I M Fired" proclaimed protest signs on the streets of Seoul. Price hikes on staples such as rice and petrol led to mass demonstrations in Jakarta and other capitals.

Eleven years later, the US faced its own version of the Asian meltdown. After taking a tough line reminiscent of 1997 to force the shotgun marriage of Bear Stearns and JPMorgan Chase and then the
bankruptcy of Lehman Brothers, policymakers reversed course. The US government bailed out banks and even took ownership of fallen industrial giant General Motors. The US and other Western governments cut interests rates and went on an unprecedented spending spree, doling out trillions in stimulus funds to consumers and public works.

Many Asians, still resentful over the Washington Consensus directives of 1997, saw a glaring double standard in the US response to its own crisis, Tay explains. It's a useful point for Westerners to understand, even though the comparison is inexact.
Currency exchange rates
were a key element of the Asian crisis; government austerity and high interest rates were believed necessary to support currencies. But even if the premise is flawed, Asian indignation is real.

Breaking up is hard to do
That sentiment, along with the weakened economic position of the US and the relative strength of Asian
economies, fuels calls for Asia to turn away from engagement with the US. On the other side of the Pacific, the economic crisis has increased support for protectionism and isolationism in the US. Tay makes the case that the two sides need each other, and he is undoubtedly correct.

The global recession of 2008 proved that Asia and the US remain economically interdependent. Asian economies - or those in other regions - can't muster the buying power of the American consumer to absorb Asian exports, and the US can't do without goods from Asia to keep domestic inflation in check. That's what globalization is all about.

The geopolitical argument is simple, too: the US needs to be engaged in Asia to be a great power, and no matter how you try to say it nicely, Asia needs the US as a counterweight to China. Since the end of World War II, much of Asia has been a US sphere of influence, and some Asians see little difference in becoming a Chinese sphere of influence. Tay correctly notes that the US has no territorial ambitions in Asia, while China might. He doesn't mention another key difference, wealthy and influential ethnic Chinese communities in many Asian countries that, in its role as the big motherland, China can try to exploit, not unlike Israel's appeals to overseas Jews.

Tay correctly suggests that the US and China don't have to compete openly, and that cooperation rather than confrontation will serve both powers and Asia far better. He suggests a "constructive tone" to US-China relations that includes both sides working to stabilize the global financial system; freer trade including more latitude to invest and operate in each others markets; and accepting that unilateralism has no place in a globalized, interdependent world. Between these twin suns, the rest of Asia can benefit from closer engagement and integration within its own ranks and with the great powers.

Wild about Harry... or Hilary Clinton, representing the most utterly corrupt government on planet earth.... ?
No prizes for realizing the above sounds remarkably similar to Singapore's world view as formulated by Lee Kuan Yew (in colonial days, Lee Kuan Yew was known as Harry Lee). Rehashing a Singapore Foreign Ministry background briefing is hardly sufficient to justify a magazine article, let alone a book supported by a cushy fellowship at the Asia Society in New York. So Tay tries a number of devices to add value, to little avail.

He stirs the alphabet soup of Asian diplomacy, from the Asia-Pacific Economic Forum to the Group of 20 to the United Nations. Singapore is among the strongest advocates of these cooperative groupings (when it's a member), particularly those that give small states equal weight, as a way to increase influence on the regional and global stages beyond what they can achieve individually.

US legislator Tip O'Neill famously declared, "All politics are local". Tay inadvertently undercuts the case for group diplomacy by repeatedly demonstrating that all foreign relations are bilateral. For example, Tay contends that the 10-member Association of Southeast Asian Nations remains important because it facilitates cooperation between (non-members) Japan and China. Multilateralist Singapore's strategic plan for the 21st century, according to Tay, is to position itself as the southernmost province of China and the 51st US state, based on its strong bilateral relationship with each power.

Tay spins clever phrases to bring some spark to his unoriginal thoughts. Singapore's relationship with China and the US is described as "equi-proximate". Rather than American-led globalization, Tay suggests the region adopt a more syncretic "Global-as-Asian".

Sometimes, Tay's wordcraft descends to outright foolishness. He coins "the Power of &" to describe deploying an array of what might seem to be competing or even contradictory initiatives, banking on benefiting from the divergence of thinking and battle of ideas to create favorable outcomes.

It's an appealing proposition that becomes laughable when Tay states, "Singapore is a city based on the Power of &." Only a true believer could fail to see the irony of thinking Singapore welcomes a diversity of opinions, rather than a flock of Singa-parrots.

Asia Alone: The Dangerous Post-Crisis Divide from America by Simon SC Tay. Singapore, John Wiley & Sons (Asia), 2010. ISBN: 978-0-470-82582-2.

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