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Web-only Exclusives
November 30, 2000

From Our Correspondent: Hirohito and the War
A conversation with biographer Herbert Bix

From Our Correspondent: A Rough Road Ahead
Bad news for the Philippines - and some others

From Our Correspondent: Making Enemies
Indonesia needs friends. So why is it picking fights?

Asiaweek Time Asia Now Asiaweek story

THE NEW REALITY

The economic shock waves are changing the nature of government

By Stuart Whitmore


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EVERY CRASH HAS ITS CASUALTIES. When Indonesian president Suharto resigned on May 21, Asia lost more than just its most durable leader. Suharto and his family and friends typified the cozy nexus of government and business - a guided capitalism that built an economic miracle on the "Asian values" of the state before the individual, stability before freedoms. For three decades, the model performed admirably, lifting millions out of poverty and placing them on the road to prosperity. Then came the Crisis - and with it the certainty that things in Asia will never be the same again.

But if the old ways are gone for good, what will replace them? Many look to the Philippines for an answer. In those halcyon days of growth, growth, growth, the Philippines' attachment to its own freewheeling style of democracy since 1986 must have amused some of its ASEAN partners. They are not laughing now. The Philippines graduated from IMF tutelage just as others were beginning to feel its sting. And in a rambunctious election, Joseph Ejercito Estrada succeeded Fidel Valdez Ramos as president. True, the Philippines has a long way to go in its own development program, but it already offers evidence that the authoritarian way to prosperity is not the only one.

A change of government in Thailand proved crucial in tackling the excesses and faults of the past. Bangkok was already moving to combat money politics and corruption when the fall of the baht a year ago intensified popular desire for change. The deficiencies of the old system were personified in prime minister Chavalit Yongchaiyudh, who was viewed as inept, beholden to vested interests and incapable of leading the country out of trouble. His replacement, Chuan Leekpai, represents a new start. "This government is different," says Phimol Phupipidh of Bangkok's University of Ramkhamhaeng. "Chuan is seen as the right man. People accept many things they would not have from other governments because they trust him." The Crisis has at once tempered the fractious political scene while igniting public awareness. With Chuan and through him, Thai democracy is visibly maturing.

The election of oppositionist Kim Dae Jung as president was a coming-of-age of sorts for Korean democracy. But now, as he seeks to rebuild the economy, Kim finds himself hamstrung by a hostile Parliament and an increasingly defiant workforce. "We must put our political house in order to avoid future crises," says Song Ja, president of Myongji University. Kim knows that. But do his enemies know it?

In Japan, where government and business have traditionally been indistinguishable, leaders are being constantly told they have to adapt to new realities. Few seem to be listening. It took intense pressure from world leaders to spur Prime Minister Hashimoto Ryutaro into finally tackling the festering problem of bankrupt financial institutions. But while other economic adjustments will probably follow, there will be no political change. Paradoxically, as the economy weakens and drifts into recession, the government's position grows stronger.

With Suharto toppled, Malaysian Prime Minister Mahathir Mohamad has emerged as ASEAN's senior statesman. But he finds himself in a dilemma. To conform to the disciplines of a global economy means to some extent disavowing the past - and thus threatening his own legacy as the builder of modern Malaysia. But if Mahathir continues to champion the Asian way, he will find it difficult to lure back international investors. They have long since grown leery of what they see as bailouts, cronyism and over-ambitious ideas. Meanwhile, Mahathir's handling of the Crisis has fanned rumors of a challenge from his deputy, Anwar Ibrahim.

Nowhere is the new debate on Asian values more keenly felt than in Singapore, where former premier and now Senior Minister Lee Kuan Yew is their most articulate advocate. Government leadership of the economy under Lee made Singapore a peerless economic success. Now the question is whether his successor, Premier Goh Chok Tong, should gradually cede more control to the private sector in order to foster the innovation and entrepreneurship needed to establish Singapore's place at the forefront of the global marketplace.

Hong Kong seems to be taking the opposite way. After a century and a half of hands-off government, the administration of Chief Executive Tung Chee-hwa is beginning to intervene in the private sector. Attempts to prop up the crumbling property market have drawn sighs of relief from distressed bankers and developers, but Tung has run out of public sympathy. The troubles at the opening of the new airport are seen by many as the final piece of evidence that Hong Kong has lost its way. The retreat from excellence may have begun.

Mainland China faces the dilemma of rebuilding its economic base while being buffeted by the winds from the Crisis. The restructuring of dinosaur-like state-owned enterprises will throw millions out of work. To soften the blow and head off any possible political destabilization, President Jiang Zemin is carefully cultivating a greater degree of openness. Asia is watching anxiously. If Jiang gets the mix wrong, the Crisis could become the Cataclysm.

- With bureau reporting


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TIME:

COVER: President Joseph Estrada gives in to the chanting crowds on the streets of Manila and agrees to make room for his Vice President

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COVER: The DoCoMo generation - Japan's leading mobile phone company goes global

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JAPAN: Japan's ruling party crushes a rebel at a cost

SINGAPORE: Singaporeans need to have more babies. But success breeds selfishness


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