The darker side of 'Asian values'
See
also: 'Asian values'
may not be so particularly Asian
BY David E. Sanger The New York Times
AS Asia's economic ascendancy in the 1980s and early 1990s moved
from the astounding to the mildly terrifying, the world began to look for
the magic formula that built such prosperity from poverty. Asian leaders
themselves were the first to give the recipe a label, writing about "the
Pacific way" and lecturing about "Asian values". Even those
who doubted there was an answer to the miracle conceded that there was
something different about the way Asians were organising themselves for
the next century. It struck anyone watching Thai workers singing a Japanese
company song after calisthenics in the Toyota factory near Bangkok.
Or anyone who watched young mothers in Seoul quiz their children with mathematical problems as they waited for the school bus.
Economists pointed to Asia's phenomenal savings rates, sociologists to its low divorce rates. Business schools offered case studies of firms that guaranteed life-time employment and built low-cost housing for workers. One of Singapore's top diplomats gushed only two years ago that modern Asia had "emerged as the most dynamic region of the world" because it fused "the best practices and values from many rich civilisations, Asian and Western".
Underneath all that fusion, though, was a good deal of fraud. While the world was enthralled with the best of Asian values, phenomenal growth rates obscured the worst: crony capitalism, corruption and secrecy eating away at the region's accomplishments like termites in a forest of fast-growing bamboo. In the name of "cooperation" between governments and the businesses that supplied them with ready cash, no one would be forced to disclose embarrassing financial information, give shareholders real power, or expose powerful friends to true global competition.
Now, as the International Monetary Fund races in to clean up the wreckage and put together bailout packages -- South Korea became the latest erstwhile juggernaut to plead for its help -- it is clear that the darker side of Asian values helped turn the Asian miracle into the Asian mess. As Mr Daniel Tarullo, President Bill Clinton's international economic adviser, noted last weekend, "the Asian miracle did not repeal the laws of economics". South Korea now knows this only too well. It is still a world-class producer of steel, semi-conductors and cars, and its economy is still growing impressively.
But it is suffering an acute cash crisis because its banks lent billions mindlessly -- often at government insistence -- to projects and companies that are now collapsing left and right. The banks, in turn, were depending on a river of foreign cash.
And they are failing because that river has been abruptly rerouted as investors have begun to steer clear of Korea -- and the IMF's other wards, Indonesia and Thailand.
In South Korea, as in Indonesia and Thailand, the darker Asian values encouraged politicians to use national banking systems as their personal kitties. They ordered up loans for projects that enriched their friends. They dotted the skyline with ego-gratifying symbols of modernity: the world's tallest buildings, highways through rice paddies, the next Silicon Valley.
Until disaster loomed on the horizon, governments and corporate titans together managed to cover up bad news that might warn investors that some of that dynamism was really a lighted bundle of dynamite.
The fear of criminal libel suits kept a tight rein on what the press said about politicians. While it was hardly a secret that the family of President Suharto had swept up most of the nation's lucrative businesses into its own government-protected monopolies, it was unhealthy to explore in public how corruption could undermine Indonesia's future.
Fraud, deception and influence-peddling are hardly uniquely Asian; it was less than a decade ago that all three contributed to America's savings and loan crisis. In fact, there may be no such thing as "Asian values", good or bad: even at the height of Asia's boom it seemed improbable that a salaryman trudging off the train in Yokohama shared much of a world view with an ethnic Chinese executive in Indonesia. Think what it would take to get a German and a Frenchman to agree on "European values". But in Asia the talk about common values contributed to arguments that there was something unique, perhaps even innate, about the region's material success. And that bred an overbearing arrogance in the business world.
Business leaders boasted in the early l990s that Asia would soon generate enough wealth to become the world's banker. The Americans could staff the global granary. And Europeans would run a series of national boutiques, so that the rest of the world had somewhere to drink wine, buy art and go skiing before returning to the important business of making a fortune. "There was a great deal of myth- making throughout Asia about the real sources of prosperity," said historian John Dower at the Massachusetts Institute of Technology. "They believed their own spin, and we believed it too, because who could argue with success?"
One question now is whether Asia's present and no doubt temporary humbling will lead to any fundamental reassessment of the link between its authoritarian ways and its success. Until now, Asia's need to keep building prosperity -- putting "economic rights" first, in the lingo of the "Asian values" argument -- has been used as a justification to keep a lid on individual freedom. Chinese President Jiang Zemin used a muted version of that argument when he visited the US last month.
That argument has been the constant sub-text as the founder of Singapore, Mr Lee Kuan Yew, has jousted with the West over the relationship between economic progress and the "Asian value" of "respect for authority". The roots of Asia's economic troubles make a pretty convincing case that authoritarians can mess up the operations of fast-growing economies as skillfully as anyone can. They did so chiefly by trying to manipulate markets to help themselves and their friends. The toughest job facing the IMF may be changing that culture -- convincing countries that they have to reveal financial figures that could expose the dealings of the politically well-connected. The IMF will undoubtedly insist on austerity, which means cancelling big dams and family-owned car projects.
No doubt many in Asia will declare that the IMF is acting as a proxy for the Americans. Malaysian Prime Minister Mahathir Mohamad has already warned against "re-colonisation". What is really happening, though, is the true "fusion" of Asian and Western values. And it may not make for a very pacific time.