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Asia and Globalization

How are smaller Asian countries dealing with the effects of globalization?

August 9, 2005

How are smaller Asian countries dealing with the effects of globalization?

The rise of Asia, often dubbed the “Pacific Century,” continues to make headlines. But most of the coverage tends to focus on Asia’s big three — China, Japan and India — while neglecting the achievements and struggles of smaller countries in the region. Our Read My Lips feature takes a closer look at countries such as South Korea, Indonesia, Thailand and the Philippines.

In a broad sense, is globalization bringing positive change to Asia?

“In the light of globalization and regional economic integration, some political convergence will have to take place in Southeast Asia — and it will likely be in the direction of greater openness, freedom and pluralism.”
(Rodolfo C. Severino, ASEAN Secretary General, September 2000)

How has Malaysia adapted to the retirement of its strongman President Mahathir?

“In contrast to Indonesia, where real democracy took root after the ousting of Suharto, post-Mahathir Malaysia has kept a system of authoritarian rule cloaked in democratic trappings and reliant for its legitimacy on perpetual economic growth.”
(Victor Mallet, Financial Times columnist, April 2005)

What problem plagues Indonesia?

“Indonesia often has trouble diverting official U.S. attention from places like Iraq — but it is too important to ignore.”
(Robert Keatley, former editor of the Asian Wall Street Journal, July 2003)

What is the situation in the Philippines?

“Feudalism is still deeply entrenched in the Philippines. This may also help to explain why it is struggling to develop even through it is the only country to have been colonized by America for 50 years.”
(Kishore Mahbubani, author of "Beyond the Age of Innocence," March 2005)

How can the Philippines overcome its ongoing fiscal crisis?

“The government cannot do this alone. This is our last chance — and we must swim together or sink together.”
(Philippine President Gloria Macapagal Arroyo, October 2004)

Is South Korea too dependent on borrowing money to sustain economic growth?

“South Korea is probably the most leveraged economy in the world. They haven’t worked off any debt. They’re just piling it up.”
(Felix Zulauf, president of Zulauf Asset Management, January 2004)

Has Vietnam managed to become an attractive destination for foreign investment?

“Vietnam is continuing to grow in popularity because it’s perceived to be a safe haven and a safe place to do business.”
(Sean Hunt, general manager of construction of the Sheraton Saigon Hotel and Towers in Vietnam, January 2003)

Just how many dollar-denominated assets have Asian countries stockpiled?

“Asian investors are into the dollar so deep, they would have trouble bailing out even if they wanted to.”
(Henry Sender, columnist for the Wall Street Journal, June 2003)

What is the official rationale for this dollar hoarding?

“Foreign reserves are needed to absorb any unexpected external shock. There is no such thing as too much foreign reserves.”
(Rhee Yeung Kyun, director-general of the international department at South Korea’s central bank, February 2004)

What has been one consequence of having to compete with China and India?

“Cheap labor is no longer a good long-term weapon.”
(Sung Ki Kwan, planning and administration manager at the Korea Institute of Footwear and Leather Technology, February 2003)

Do the smaller Asian countries have any choice but to cooperate more closely?

“If you look at the rest of the world, it’s obvious that size matters. If this region remains divided, we will be marginalized.”
(Chalongphob Sussangkarn, President of the Thailand Development Research Institute, March 2002)

What about the threat of terrorism in the region and beyond?

“Terrorism is now no longer the duty of only one country. We all need to cooperate.”
(Thailand’s Prime Minister Thaksin Shinawatra, August 2003)

How have diseases like avian flu and SARS affected the region?

“With globalization, a disease occurring anywhere in the world becomes a concern everywhere.”
(Stephen S. Morse, Columbia University infectious disease expert, March 2003)

Was the 1997-1998 Asian financial crisis a setback for globalization in the region?

“The Asian crisis confirmed what many suspected: Globalization was a rich country’s game — and the rules were rigged to favor the most competitive.”
(New York Times columnist David Sanger, December 2000)

How did the U.S. government perceive Asia's boom-and-bust cycle?

“In no part of the world had globalization been put to the test as much as in Asia. We have felt both its great benefits and its temporary — but brutal — sting.”
(Former U.S. President Bill Clinton, November 2000)

Is the United States an Asian power?

“Because of three major wars — the Pacific War, the Korean war and the Vietnam War — the United States has become an organic part of East Asia in a way which Europe can never be.”
(George Yeo, Singapore minister for foreign affairs, March 2001)

Yet, how do many Asians feel about the United States?

“Asians still love their Big Macs, their Levis, their Harvard MBAs. Nevertheless, anti-American sentiment in Asia is brewing far stronger than a Starbucks espresso.”
(Hannah Beech, Asia Times Shanghai correspondent, March 2003)

And finally, has this anti-Americanism stopped Asians from embracing American ideals?

“The reality is that the American dream has become the Asian dream — many Asians do not admit this out of a sense of national pride.”
(George Yeo, Singapore minister for foreign affairs, March 2001)