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TO OUR READERS: Power in the Making (of a Special Issue)
THE GENERALS OF REFORM: The reformers call the shots

NO. 1: Two leading the charge for change
RANKING: Our annual listing of Asia's power players

KINGS: Above it all, the monarchs of Thailand and Cambodia
DOWN AND OUT: Who was taken off the list and why
CLOUT: The best and worst power movers in 1999
UP-AND-COMERS: The ones to watch in coming years
A DYNAMIC PAIR OF ACES
By Alejandro Reyes



When budding stars début, they inevitably attract close scrutiny from the gallery. So it was in London in April last year at the Asia-Europe Meeting when two freshly minted leading men stepped on to the international stage cast for the first time in their new roles. Zhu Rongji had only weeks earlier been named China's premier, succeeding the decidedly dull Li Peng. Zhu was no young dynamo himself, but a 69-year-old with a permanent scowl and scathing temper. In Britain, he disarmed the critics, laughing his way through the soggy weather and striding confidently past demonstrators with a smile. He charmed everyone within earshot of his sharp wit. Even his British counterpart, Tony Blair, professed through a spokesman to be "fascinated by [him] and in no doubt he was in the company of a fellow modernizer." Zhu had stolen the show.

By contrast, Kim Dae Jung's arrival on the exclusive dais of world leaders was low-key, even lackluster. Though a dogged dissident for most of his career until South Korea's democratic flowering turned him late in life into a more sober oppositionist, Kim's age and stiff demeanor meant the 73-year-old president was not regarded as somebody who could or would turn the system on its head. Zhu, at least, already had enough years on the frontlines of economic management to earn the perception that he was something of a revolutionary by the standards of China's conservative leadership.

Two men, one vision: reform. More than a year since their London coming out, both share the top rank in this year's Power 50. They are Asia's toughest bosses, the region's pluckiest leaders. At first, they may appear an odd couple - how can a leader of a vast nation like China be at par with the head of a Crisis-battered middling economy? Yet the pair are a neat match. Both men know that power no longer means just might, but right too. By competent governance, a leader can successfully accumulate the influence and clout to deserve to stay in power. Not only that: the power becomes greater than the man. Reform movements are like that. They snowball. Make no mistake, however, this is no linear process. To implement reforms successfully, a leader must know when to press hard and when to let off. Particularly when economic times are tough - as they are across the region - sensitive power play is essential.

Both Kim and Zhu have the touch - and the daring to gamble their personal popularity to get results. International Monetary Fund Managing Director Michel Camdessus, who topped last year's Power 50 ranking, says of Zhu: "I see the steadfastness, the clear vision and analysis of the problems that he has. I see him pursuing this steady effort through the Crisis. Whatever the developments, he goes on - so far, with remarkable success." Camdessus is similarly impressed by Kim. Weeks before his inauguration last year, the Frenchman recalls, "he told me: You can be sure I will stick with your program, not only 100%, but 120%. I believe in it, and I have fought for it all my life. You are absolutely right in asking us to dismantle all these systems of protection for the chaebol [as we go for] true liberalization of capital accounts and other reforms. I have seen him go that way, and the present success of South Korea is related to the strength of his leadership in implementing this program of reform."

South Korea's recovery is undeniable. Seoul stock prices have more than doubled since last September. After last year's painful 5.8% contraction, the economy is expected to grow by at least 2% in 1999. In the first quarter of this year, industrial production jumped 12.3%, while inflation has subsided to below 1%. These numbers have made South Korea the toast of investors in Asia. China too has held its own amid the Crisis. Growth last year came in at 7.8% and is expected to moderate to 7%. Beijing, with Zhu at the economic helm, has stayed put on the renminbi despite the pain, contributing immensely to regional stability.

Between the two, it is Zhu who faces heavier domestic pressures. Take the aftermath of the U.S. bombing of Beijing's embassy in Belgrade. The attack, which Washington said had been an error, came as Zhu's efforts to conclude a deal with America on China's entry into the World Trade Organization were meeting some vigorous domestic opposition. Even as Chinese leaders including Zhu were condemning what they claimed had been a deliberate military action and dolefully consoling the wounded and grieving relatives of the dead from the incident, the government was insisting that the WTO negotiations with the U.S. proceed. Said State Councilor Wu Yi on May 17: "[China's] attitude toward joining the WTO is active and has not changed."

That's good news for Zhu, who has risked much on WTO membership. After he failed to secure a deal during his tour of the U.S. in April, the embassy attack has further clouded prospects. Yet even before the bombing, there were signs that China was retreating on market-opening commitments which the U.S. claimed it had already delivered. If that were so, it would not be the first time Beijing had lowered its reform sights. In March 1998, Zhu announced an ambitious program to turn around failing state enterprises within three years and privatize urban housing by the end of the year. But as the Crisis began to bite, China's economic czar had to retract his reformist horns and instead put stimulating domestic demand and maintaining high growth at the top of his priorities.

"Zhu certainly wants to push ahead with reforms as soon as possible, but the key words may be the last two - as possible," says Canadian ambassador to China Howard Balloch. "In light of the international environment, a slowdown in reform doesn't imply weakness of Zhu's influence or of his commitment to reform." Gerald Segal of the London-based International Institute for Strategic Studies disagrees. Asked to react to the selection of Zhu and Kim as Asiaweek's joint top powers, he replies: "Frankly, that's an insult to Kim, not because Zhu isn't a serious reformer, but because this is a difficult and dangerous year for [China]. Chinese leaders are not pretending reforms are powering ahead."

Yet Segal credits Zhu with staying power. "He sees reform as a long-term strategy and understands that he doesn't have to do it all in 1999," says the Canadian academic. "If he can husband his resources, he can hang on for a time when the Asian economy is growing again and he might be in a better position. He is clever and will play this long." Yes, Zhu is no morning glory destined to sputter out by afternoon. He has already accomplished too many changes to receive such an underserved fate. But he must tread carefully. Says envoy Balloch: "He's China's first real economic leader; he didn't make the Long March; he did not rise through backroom politics."

Kim and Zhu share many attributes. They are, for example, tough on their subordinates. Zhu has little time for small talk. Focused and determined, he doesn't like to cover up problems, expecting them instead to be fixed right away. When inspecting a collapsed dyke in Jiangxi Province in August last year, Zhu berated local cadres for their "beancurd engineering," peppering a vice mayor with criticism.

Like Zhu, "D.J." has a penchant for lecturing his minions, rebuking those who resist reform and punishing those proven to be corrupt. He can play hardball even with South Korea's restive labor unions. In April, he attacked the nation's top five chaebol for the lack of progress in restructuring, threatening to cut off the flow of bank loans to them. He once cut off his budget and planning chief with a curt "not enough" to sound his displeasure at what he regarded as insufficient streamlining measures. Conferences with "The Boss" are always tense. Though food is served, few officials have the nerves to eat anything.

Kim's hard edge and plain speaking have spurred his critics to blast him as a tyrant no better than the generals who jailed him for years. "He is like a lion out of a cage," complains former government official Kim Hye Ja. "He reminds me of military dictator Chun Doo Hwan and the reign of terror he brought on the bureaucracy in the early 1980s." For most South Koreans, however, Kim's toughness is a mark of distinction. They don't mind the strong arm so long as he is perceived to be fighting for their interests. His anti-corruption drive has boosted his popularity, as has his "sunshine policy" of engagement with North Korea, which has lowered the temperature between the two long-time adversaries. Still, it is Kim's success at turning around a collapsed economy for which he will be remembered. The recovery remains fragile, but if it gains momentum and solidifies, Kim's legacy will be sealed. "We need stronger reform," Kim told Asiaweek in a written reply to submitted questions. "It is the only way to survive."

Asked about Zhu, the president wrote: "Premier Zhu is an excellent leader and also a friend I respect. I am all the happier for being selected [as Asia's most powerful figure] together with him." After London, both men met in Beijing in November last year when Kim traveled to the Chinese capital. Zhu is expected to visit Seoul later this year. Asia's two toughest bosses will doubtless exchange war stories from their respective reform campaigns. Whatever their personal fortunes in the next 12 months, the effects of their work will be felt well into the next millennium. That's the power of reform.

With reporting by Laxmi Nakarmi/Seoul and Paul Mooney/Beijing

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