Although it emerged after the collapse of communism as the world's only superpower, the United States has been widely viewed as a nation in relative decline. The ongoing economic crisis in East Asia drastically alters that perception.Clearly the dominant military power, the US is increasing its lead over rivals because of its technological prowess. More important in the post-Cold War era is its economic preponderance.
U.S. leadership has proved absolutely essential since Thailand's currency nose-dived last July and triggered region-wide turmoil. Despite domestic opposition, the U.S. has mobilized the Washington-based International Monetary Fund, the only institution capable of addressing the problem.
With other economic centers, notably Japan and the European Union, unable or unwilling to help, the U.S. has driven home the centrality of its position. American influence is rising.
Even when they complain about the nature of U.S. intervention, East Asians indirectly acknowledge one fact of life: Littleof consequence happens these days without the U.S.
Americans have every reason to be pleased with the strategic turn of events. At the same time, some of them engage in triumphalism that is entirely misplaced.
For instance, talk of U.S. capitalism becoming the worldwide model, with not only a reborn Asia but the rest of the globe looking much more like America, ignores reality. And projections of a new financial Pax Americana, which could extend U.S. leverage over China and Russia as well as the rest of Asia, are premature, to say the least.
In fact, some East Asian countries feel that the U.S. promoted system of free trade and investment and capital flows should be re-examined to assess its benefits. They think they are opening too fast, before their people and institutions are ready.
Further, the U.S. is under attack in parts of Asia, sometimes for being too slow to aid ailing economies, but also for allegedly applying the wrong remedy when it finally acts.
The IMF is criticized for insisting, ineffect, an recession, unemployment and bankruptcies as the price of assistance. Comments by former U.S.commerce secretary Mickey Kantor, urging the U.S. and Europe to use the IMF as a "battering ram" to open Asian markets, confirms the suspicion in some quarters that Washington has ulterior motives.
Still, the U.S. has grown used to leading and, for all the speculation about a coming multipolar world, Washington finds itself almost alone in dealing with the economic upheaval. That is no less than what almost everyone has come to expect.
The EU, which has significant two-way trade with East Asia and large bank-loan exposure in the region, might have stepped forward. It didn't, presumably because it is preoccupied with plans to introduce a single European currency.
Japan, the largest creditor nation, whose banks also have loaned recklessly in Southeast Asia, continues to fumble the reform of its domestic economic, financial and political systems. Tokyo's only gesture was to float the idea of an Asian fundto prevent the failure of regional economies, but it dropped the proposal under U.S. pressure.
China, a rising power with long-term ambitions that remains relatively untouched by the economic chaos, might have seen an opportunity in being able to help its neighbors. But apparently worried that it may also get hit, Beijing contended itself with a pledge not to make matters worse by devaluing.
"We all just think of America, America, America," says one Malaysian think tanker, "We should look into all these other possibilities as well."
It was to the U.S. that Thailand and Indonesia automatically looked when they were forced to go to the IMF last year. The absence of the U.S. from the IMF bailout package of Bangkok, with only a modest, age, is the source of lingering resentment.
Although U.S. officials have explained that they didn't want to risk confrontation with the U.S. Congress by seeking approval for the funds for Thailand,s many analysts agree that Washington blundered by not directly supporting atreaty ally.The cavalier treatment of Thailand and Indonesia got the rest of the Southeast Asia wondering if the U.S. cares about the subregion, especially when Washington later joined the IMF rescue of South Korea.
President Bill Clinton has since tried to make amends by personally phoning Indonesian President Suharto and dispatching a treasury team to talk to Jakarta and Bangkok. It hasn't been enough to either stabilize the Indonesian currency or mollify the critics.
The Bangkok-based Nation newspaper noted recently that Thailand was once the "darling of the Americans," who showered it with aid to stem the communist threat. Now that economic and trade issues are paramount, the daily said, "Thailand amounts to but a pittance" in overall U.S. strategy. Conspiracy theories circulate. According to one, the U.S. only stepped in when it realised Indonesia faced a real and mounting political crisis. Washington might have delayed its move to signal its unhappiness over the government's human-rights record, thetheory goes.
"The U.S. has seen an advantage to do something for Korea, where it has got troops," says a Singaporean think tanker. "It would be good if the U.S. did more, in substance, in Southeast Asia."
But the U.S. must also tread carefully, lest it provoke a nationalist backlash. Voices in some countries, though muted as yet, are warning that foreign influences, among them the forces of globalisation, should be resisted.
Malaysian Prime Minister Mahathir Mohamad has equated IMF conditions with a return to colonialism. Even thoughtful policy makers wonder if they have lost control on their destiny.
One big fear is that financial-sector reform, a key element in the IMF packages, will marginalize local banks. "As a matter of policy, countries may desire the existence of a strong domestic presence in the banking system," says a discussion paper prepared for the nine-member Association of Southeast Asian Nations. Why? "They would be more amenable to national aspirations and would stand by the countrythrough good and bad times."
Put bluntly, a giant U.S. bank that dominates the local market may cut services when profits fall. And would the government be able to ask that foreign bank to lend to the poor, for instance, in the interests of social stability?
Martin Khor, director of the Penang-based Third World Network, a research and policy organisation, says Asians are losing confidence in IMF programs. "The rich countries should view Asian nations as partners to be helped in times of trouble," he has written, "and not as....golden opportunities for taking over market share when their assets are greatly undervalued."
But much of this concern will be set aside for the time being. East Asian governments, watching hard-won economic gains evaporate, accept that they need support-and that only the U.S. can provide it.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
