[This article appeared in International Herald Tribune, 29 March 2000]
Tokyo – Like a man who has suffered a heart attack, post-crisis East Asia has had intimations of mortality. It has learned that while development is possible, it is not inevitable.
Spurred by this lesson, the devastated economies of the region are bouncing back, although resumption of the kind of galloping growth they enjoyed before financial turmoil struck in mid-1997 is still some distance away.
The crisis is forcing these economies to become more efficient, productive and competitive. It is also making national politics more transparent, accountable and democratic.
Making democracy really work will be Asia’s biggest challenge over the next 20 years. The future of the region’s economies, while bright with promise, is still fraught with uncertainties. Foremost of these is the political resolve of leaders to implement unpopular reforms.
Sustained recovery will entail a long and sometimes tortuous process. Brave leadership, the perseverance to pursue reforms and strong political will are the most important factors in recapturing East Asia’s economic dynamism.
Partly as a result of the pain caused by the crisis in terms of job and income losses, neither democratization nor globalization hold the attraction they once did.
Today’s East Asians are more aware than they were of the downside of globalization – of the havoc it can bring to traditional ways of doing things. They are also more conscious of the social injustice that free-ranging capitalism can impose on poor people.
They have come to realize that globalization will not bring about general progress automatically. Indeed, at least initially, it may sharpen inequalities within less-developed countries and between them and mature economies.
Replacing authoritarian regimes with representative system – as East Asians have done in the past decade or so in South Korea, Taiwan, the Philippines, Thailand and Indonesia – may turn out to have been the relatively easy part. While democracy’s trappings are easy to assemble, making democracy work properly for ordinary people requires a long learning process, for which leaders often have little patience.
Uncontrolled political mobilization in ethnically diverse and multi-religious societies still burdened by mass poverty generates no-holds-barred struggles for power that can overwhelm weak and emerging economies.
Then there is the even more basic problem of truly democratizing political systems where authority rests on the personal power exercised by dominant personalities, such as we still have in the Philippines.
Fortunately, democracy has become part of the spirit of the age. Even authoritarian regimes are now forced to claim that they are acting on behalf of their captive peoples. And there are outside forces to shore up Asian democracy when it falters.
Foremost among them is the market system, which has changed East Asia dramatically over the last generation. Free markets have brought faster and more sustained growth, and they have been a liberating political force. Just as early capitalism subverted feudalism in Western Europe, so has the open market eroded authoritarian regimes in East Asia.
Where the command economy results only in stagnation, the market stimulates individual enterprise, invention and creativity.
As a result, the economic growth that is generated undermines the authoritarian regime. As people become richer and more secure, they begin to demand political participation and seek recognition of their civil rights from those who rule.
So far, the East Asian crisis has disrupted economic growth, destabilized national politics and damaged people’s lives. But over the longer term, its effects – on balance – might be beneficial.
I am hopeful that the crisis will, in the end, result not only in more transparent financial institutions, but also in more participatory political systems that help empower people throughout the region.
Adapted by the International Herald Tribune from the author’s speech made last week to a conference in Tokyo.