Information and Communication For Global Governance - An Asian Perspective
IPS Regional Editor for Asia
Because I come from Asia I would like to go into some of the economic and social changes ongoing in the region right now and hopefully that should be a good vantage point from which to look out and study what is the region's worst crisis since the Second World War and see what implications this has for global governance, the lack of it and the role of media.
So since the crisis first struck in July 1997 or so weve heard all sorts of diagnosis of how the miracle became a debacle. Some said economies opened their financial markets too fast and to wide, others said the opposite, that they were not open enough and still others blame the corruption of the free market models what is called Asian values or chronic capitalism as if this were an Asian invention.
Ten months after the contagion began and spread some of Asia's powering successes are under siege from a mix of financial, economic, social and in some cases increasingly political crisis. There are two points I think illustrate the depths of the crisis - one on the macro level of the economy and other on the human society individual level. I just like to say two things quickly: First that never has a region experienced such a massive pull-out of capital. The point is illustrated by figures that came across recently from the Institute of International Finance which show that the five worst affected Asian economies suffered net private capital outflows of twelve billion U.S. dollars in 1997 compared to net inflows of 93 billion Dollars in 1996.
These are for South Korea, Indonesia, Thailand, the Philippines and Malaysia. And then the outflow of portfolio investments grew to twelve billion dollars in 1997 and that is the same amount that went into the same economies just the year before. Economists estimate that the capital that left the region in what amounted to a run on Asian economies, amounted to something like 10 to 12 percent of GDP. The second point is just that this region has been plunged into mass unemployment in just a space of a few months. Unemployment in Indonesia hit 10 per cent - that is in a country of 200 million people. In South Korea, the figure is 6.5 per cent, that was in March, from only 3 percent in December.
And there is no sign that these figures have reached the peak. Of course these percentages are far below European levels of 12 per cent or so, but this is happening in a region that has little tradition of formal insurance or welfare systems as in the West.
So that brings us to how we look at the whole issue. As readers and communicators do we see the emergence of new ideas to help prevent an occurrence of a crisis or are we missing out on what matters in what we read every day? So perhaps the question is, are we asking the right questions? That is something we might ask of ourselves as people who work in the media and also a question we can ask both economic experts and perhaps our political leaders.
So I just like to tick off some sets of questions, well, that seem to have risen out of the Asian crisis. First, has East Asian crisis - and this is the second major economic shock since the 1994/1995 crisis in Latin America - led to a radical examination of the brand of globalization and free market model? Some people are asking: Is there a lack of ideas about what the rules of the international order should be? As it is now, there are very few rules and even lesser debate since the end of the World War about what some of these rules should be.
There is recently talk now for a new economic architecture and its a language that we hear from G-7 governments as well. One could argue that it is progress in the sense that questions about the risks of open capital accounts are being raised not just by activists and long time critics for example of the International Monetary Fund but even the so-called mainstream activists.
But does this go beyond tinkering with the system? Many talk about transparency, more open accounting systems, the need for early warning devices, but what about the system itself? Then what are the implications of the fact that Asian countries increasingly are starting to identify terms like globalization, free trade and IMF reforms with Western or American interests? And what is the voice if any of the developing countries hit hardest by the crisis? So I think the differences in political weight are obvious.
Then there are some experiments to watch if you want to call them experiments like I would say Malaysia's attempts to tighten its belt and to undertake reforms without going to IMF so far. The other major point, I think is that the IMF in the last few months has required a key role in Asian economies. In essence it is back to the Third World for many of them. What are the implications of these even at the national levels for national governance?
© Friedrich Ebert Stiftung | technical support | net edition fes-library | Dezember 1998