Globalization in Asia (2024)

REPORT FROM THECONFERENCE ON
GLOBALIZATION AND REGIONAL SECURITY: ASIANPERSPECTIVES
FEBRUARY 23-25, 1999 HONOLULU, HAWAII

Globalization in Asia:
Getting the Breeze Without the Bugs

Executive Summary: Nearly two years since Asias economic crisis began, the region has begun to express doubts about the impact of globalization on regional societies. Although the term defies simple definition, participants agreed that globalization has several core characteristics:

Unprecedented economic interdependence

, driven by cross-border capital movements, rapid technology transfer, and "real time" communication and information flows.

Rise of new actors that challenge state authority

, particularly non-governmental organizations and civic groups, global firms and production networks, and even financial markets.

Growing pressure on states to conform to new international standards of governance

, particularly in the areas of transparency and accountability.

The emergence of an increasingly Western-dominated international culture

, a trend which in many countries has sparked concern about the erosion of national identity and traditional values.

The rise of severe transnational problems

that require multilateral cooperation to resolve.

Globalization and Regional Security The impact of globalization on Asias security is complex. In some ways the impact has been positive: economic integration has reduced the potential for conflict, particularly in Southeast Asia. Nevertheless, globalization may give rise to new security concerns, and aggravate existing tensions.

New transnational threats

Globalization has contributed to the rise of energy and environmental issues, food and water access, migration, and organized crime and terrorism as major security concerns. To be effective, responses to these problems must be multilateral in nature.

Weakening regional institutions

The financial crisis has weakened Asias two major regional organizations, APEC and ASEAN. APEC was helpless during the crisis, and ASEAN appears increasingly divided.

Shifts in the balance of power

Because globalization can fuel rapid economic growth, shifts in the balance of power can occur more quickly than in the past. Rapid Chinese growth and Japanese economic stagnation may change the strategic equation in Asia in a relatively brief period of time.

Expanding roles for the military

The combination of new threats and lingering concerns will place unprecedented demands on regional military organizations. Militaries will have to take on new roles, even as resources decline and recruitment falls.

Globalization and Sovereignty  Although globalization is often viewed as a challenge to national sovereignty, states in Asia have chosen to embrace the global economy. During Asias boom years, globalization was viewed as a tool for strengthening national power, rather than as a potential threat. This view was reinforced by the belief in Asia that governments could participate in the global economy without altering domestic political structures and practices. Across the region growing wealth often coexisted with authoritarianism.

Events in Indonesia, however, suggest that globalization can force political, as well as economic, change. Globalization can exacerbate divisions within society, with some groups profiting more from globalization than others Indonesias ethnic Chinese, for example. In the face of globalization, ethnic divisions and separatist movements could worsen, and social cohesion could suffer as well.

Authoritarian regimes may have more to fear from globalization than democratic states. Governments that embrace norms such as transparency, accountability, and the rule of law concepts that form the backbone of democratic societies appear to have suffered less from the financial crisis than their authoritarian counterparts.

For now, few Asian governments appear likely to reject globalization entirely. Nevertheless, the possibility of an Asian backlash primarily against the United States remains real. A new "grand bargain" between the West and Asia is essential. The West must recognize that Asian concern over eroding values and social cohesion is legitimate; Asia must cease demonizing the West for its role in spurring globalization, because no nation is immune to the challenges and opportunities it presents.

Introduction

As the effects of an unprecedented economic crisis continue toripple across Asia, a fundamental issue has moved to the forefront of policy discussionsin the region: the long-term impact of globalization on Asian societies. Even during theyears of Asias economic boom, scholars and government officials across the regionengaged in a lively dialogue about the influence of global forces on the region. Thedebate over alleged differences between Asian and Western "values" that emergedin the early 1990s was at least partly an expression of Asian concerns aboutglobalizing forces.

The Asian financial crisis has provided new fuel for this debate. Prominent, mainstreamAsian thinkers from India, to Malaysia, to Japan are now pointing to globalization as apossible threat to internal cohesion and economic health. Commentators in the West havegenerally assumed that the crisis would precipitate disillusionment with so-called Asianapproaches to governance and economic management, spurring further "convergence"with Western practices. Although there is evidence that some Asian countries have moved inthis direction, others are drawing alternative conclusions: namely, that adherence toWestern methods leaves Asian societies more vulnerable to the ravages of globalcapitalism, and more exposed to forces that corrode long-standing cultural and socialnorms. The outcome of this debate will have profound implications for the regionssecurity environment, and for the United States which is seen in much of Asia asthe ultimate driving force behind globalization.

To explore Asian perspectives on globalization, and to examine how the phenomenon isreshaping the regions security environment, the Asia-Pacific Center invited a groupof distinguished government officials and scholars for three days of intensivediscussions. Although thinking about the influence of globalization is still very much inits infancy, the meeting served to sharpen thinking about how relations in the region may or may not be transformed in the years ahead.

Globalization: What Is It? To examine the impact of globalization on Asia, the term must first be defined.The task is not simple. Several conference participants noted that groups within societiesdefine the term differently, often to suit narrow, parochial interests. In South Korea,for example, labor unions make use of the term in demanding the "universal"right to assemble; business interests, in contrast, employ it to spur deregulation. OneAmerican observer noted that "globalization" is often used to describe so manydifferent things that the term is essentially meaningless; globalization has become, henoted wryly, the "el Nino of the social sciences" a force that can beblamed for almost anything.

Other participants questioned whether globalization was truly a new phenomenon. AnAmerican historian noted that the entire course of human history can be seen as thegradual expansion of transportation and communication networks; in that context,globalization may be little more than an extension of past patterns of human interaction.At the very least, as a South Korean participant noted, "globalization" must bedistinguished from terms like "interdependence" and "integration" vocabulary which have been part of the social science lexicon for decades ifthe concept is to have meaning.

Despite the doubts expressed about the utility of the term, however, conferenceparticipants generally agreed that globalization is a new phenomenon with a number of corecharacteristics:

Unprecedented economic interdependence,

driven by cross-border capital movements, rapid technology transfer, and "real time" communication and information flows;

Rise of new actors that challenge state authority
, particularly non-governmental organizations (NGOs) and civic groups, truly global firms and production networks, and even financial markets;
Growing pressure on states to conform to new international standards of governance,
particularly in the areas of transparency, accountability, and the rule of law;

The emergence of an increasingly Western-dominated international culture

, a trend which has sparked concern about the erosion of national identity and traditional values in many Asian countries; and

The rise of increasingly severe transnational problems such as energy and environmental concerns, large-scale migration flows, and organized crime networks that require multilateral cooperation to resolve.

The forces of globalization will not totallytransform Asias regional security order, but they will produce a new set ofchallenges and opportunities for policymakers in the next century.

Globalization and Regional Security

The impact of globalization on Asias securityenvironment is complex. In addition to affecting political and economic conditions withinstates, globalization may be transforming relations among states. This impact is notnecessarily negative. A number of participants argued that in some ways the forces ofglobalization have brought about greater stability in the region. Deeper economicintegration, and the emergence of regional "growth triangles" such as theJohor-Riau-Singapore triangle in Southeast Asia have reduced the potential forconflict; the unprecedented interdependence spurred by globalization gives states anincentive to cooperate. Indeed, in the words of an Indonesian participant, the"absence of war" in Southeast Asia in recent years must be attributed at leastin part to the forces of globalization.

Nevertheless, the impact of globalization on the regional security environment is notentirely positive. Though globalization may mitigate the potential for conflict in someparts of the region, other traditional security concerns appear immune to its effects;indeed, globalization may actually serve to aggravate long-standing tensions. The forcesof globalization are also giving rise to new challenges that will test the ability ofregional governments to cooperate. Participants linked the following set of concerns withglobalization:

New Threats A number ofparticipants linked the rise of new "transnational" concerns to the impact ofglobalization. Many of these challenges represent long-term threats that havetraditionally fallen outside the realm of foreign policy. The cross-boundary nature ofthese threats also poses a dilemma for Asian governments. Developing the institutionalcapacity at both the domestic and international level to address theseconcerns will be a major challenge for the region in the next century. These new threatsinclude:

Energy and environmental concerns

. Rapid economic growth in Asia has led to growing reliance on energy imports, increasing the importance of sea lanes and transportation routes. The regions increased use of energy has also exacerbated environmental degradation, which several participants linked to social unrest.

Food and water security.
The growing problem of environmental degradation, coupled with growing populations in the region have increased pressure on food and water supplies. Although improvements in agricultural technology appear likely to mitigate food security issues, water availability was cited by several participants as a likely source of conflict in the future.
Migration.
The combination of rapidly growing populations in much of the developing world, increasingly porous national borders, and disparities in economic growth rates, have sparked a dramatic increase in international migration. Migration has already emerged as a source of tension in Southeast Asia; Malaysia deployed troops and naval vessels to limit the arrival of Indonesian migrants during the financial crisis.
Organized crime and threats from other "non-state" actors.
Through the increasing ease of communication and transportation flows, and the growing permeability of national borders, organized crime networks, terrorists, drugs and weapons traffickers, and even human smugglers face fewer constraints on their activity. Some participants suggested that these threats may prove to be some of the most pernicious of the 21^st century.

Weakening Regional Institutions? Asiasfinancial crisis, and the forces of globalization more broadly, may have a corrosiveeffect on the regions multilateral institutions. The Asia Pacific EconomicCooperation (APEC) forums inability to forge a response to the financial crisis hasled many to question the institutions future relevance. Participants also noted thatthe future of the Association of Southeast Asian Nations (ASEAN) appears increasinglyuncertain, given the current turmoil in Indonesia, although the organization will continueto be Southeast Asias core institution for the foreseeable future.

Rifts also appear to be emerging betweenASEANs democratic and more authoritarian members. Thailand and the Philippines, forexample, have advocated a policy of "flexible engagement", which would allowASEAN members to comment on each others internal policy matters; these countrieshave similarly supported proposals for a new ASEAN surveillance system, in which memberswould cooperate in monitoring economic indicators for signs of impending crisis. Theseinitiatives would represent a departure from ASEANs traditional stance ofnon-interference in domestic affairs and could spark opposition from within theorganization. Globalization may ultimately bring about new concepts of sovereignty andregional security interaction. Shifts in the Balanceof Power  The capacity of globalization to fuel rapid economic growth and to ravage economies almost overnight implies that regional and globalbalances of power can change more quickly than in the past. The combination of rapidChinese economic growth and extended stagnation in Japan, for example, could significantlyalter the balance of political, economic, and military power in Asia in a relatively shortperiod of time.

Participants noted that globalization could also give rise to new sources of rivalry.Deepening economic integration, for example, could contribute to the emergence of regionaleconomic blocks that compete for power and influence. Some participants suggested that theEuropean Unions rise as a possible challenge to American economic dominance can beseen as a political consequence of globalization.

Expanding Roles for the Military  Thecombination of lingering traditional threats, the prospect of increased internal tensionsin Asian countries, and the emergence of new security challenges will place unprecedenteddemands on regional militaries. Military organizations will have to take on new roles, atrend that may spark resistance within the ranks of uniformed personnel. At the same time,other demands in Asian societies will compete for financial resources, and growingeconomic opportunities elsewhere will likely reduce recruitment levels. Increasing demandson the military, in other words, will likely coincide with a period of declining resources stretching the armed forces in many countries very thin.

How Important is Globalization? Conferenceparticipants agreed that globalization undoubtedly is introducing new complexity into theAsia-Pacific security environment. Whether the forces of globalization will fundamentallytransform the regional order is another question, however.

The picture is mixed. There is some evidence that globalizations integratingforce has contributed to an environment of greater peace and stability in Southeast Asia.In other parts of the region, however, the case is much less clear. In Northeast Asia, forexample, traditional, state-centered patterns of interaction still appear to prevail,despite increasing trade and investment ties. Relations between the sub-regionsmajor powers China, Japan, Russia, and by extension, the United States arestill best understood through the framework of realism: the balance of power, relativegains, deterrence and the centrality of military force. South Asia, too, remainsrelatively untouched by the global economy, and therefore traditional patterns ofinteraction remain dominant. Globalization, in other words, appears to have had arelatively minor impact on political relationships in Northeast and South Asia atleast until now. Whether the forces of globalization will serve to remold theinternational system and create fundamentally new forms of interaction, remains to beseen.

Globalization and the State in Asia

Globalization is often viewed as a threat to the authority andsovereignty of the state. The Asian financial crisis demonstrates that governments areincreasingly hard-pressed to insulate their populations from the pressures of the worldeconomy. Nevertheless, the state remains the central actor in Asia, and its centrality isunlikely to change in a fundamental way even with the rise of globalization.

Embracing Globalization - Several participants arguedthat Asian states have played a key role in promoting globalization in the region. Oneparticipant from Singapore argued that until the financial crisis, regional governmentsperceived globalization as a tool for enhancing national power. Singaporesdecision to embrace the world economy helped it to become the financial center ofSoutheast Asia, and bolstered its strategic position in the region as well. China andVietnam have undertaken substantial economic reforms to break out of isolation andstrengthen the positions of those in power.

For these and other countries, participation in the global economy has certainlyentailed costs. Greater openness to trade, foreign investors and visitors, and informationfrom the outside world all have contributed to the erosion of sovereignty in Asia. Butwith few exceptions Burma and North Korea, for example Asian states chose toaccept these costs in order to reap the benefits of globalization.

Behind the Asian embrace of globalization was the assumption that economics could beseparated from politics. In other words, Asian governments sought to liberalize theireconomies even as they worked to protect existing political systems, institutions, andpractices an effort that proved remarkably successful during the boom years.Globalization helped to give legitimacy to ruling regimes across Asia. In particular,rising living standards resulted in populations willing to tolerate governments that wereoften authoritarian a phenomenon sometimes described as"performance-based" legitimacy. In countries like Indonesia, Malaysia, and evenSouth Korea, growing prosperity and authoritarianism walked hand-in-hand.

New Doubts - In essence, as a Singaporean participantnoted, Asia saw itself as a "winner" in the new global contest, although evenduring the years of the Asian miracle regional governments worried that global forceswould corrode national identity. In the wake of the financial crisis, however, in thewords of a participant from Singapore, doubts about the benefits of globalization havebeen "redoubled." The region is now deeply aware of the costs of being aglobalization "loser."

More importantly, the crisis may indicate that Asias traditionaleconomics-without-politics approach toward globalization may no longer be possible as events in Indonesia so starkly suggest. Governments that previously embracedglobalization as a tool for strengthening domestic legitimacy have come to see thephenomenon as a possible threat to their power. Malaysian Prime Minister MohamadMahathirs denunciations of foreign speculators, and of Western capitalism moregenerally, represent one somewhat extreme example.

Growing Internal Divisions Asiasreconsideration of globalization is in part driven by the realization that the unevenimpact of globalization on Asian societies may exacerbate internal divisions nosmall concern in the regions many multiethnic states. With some groups withinsociety benefiting more from globalization than others ethnic Chinese in Indonesiaand Malaysia, for example the risk of worsening ethnic divisions and separatistmovements is high. Further, to the extent that globalization weakens governments anderodes notions of national identity, a concern several participants cited, social cohesionin Asia could suffer.

Globalization and Democracy - Several participantsargued that authoritarian regimes may have more to fear from globalization than moredemocratic states. No government is immune to the effects of globalization, anddemocracies are no exception; the financial crisis swept aside democratic leaderships inSouth Korea and Thailand, for example. But several participants noted that the forces ofglobalization appear to reward, or at least punish less severely, governments that embracetransparency, accountability, and the rule of law norms that form the backbone ofdemocratic and free-market societies. Indeed, one Malaysian participant argued that theforces of globalization may actually strengthen the institutions that supportdemocracy, by demanding reforms that result in more open political and economic systems.

In authoritarian regimes, the norms and institutions that appear necessary to managethe pressures of globalization are often in short supply. In the face of globalization,the authoritarian state thus suffers from two central weaknesses: the absence ofdemocratic norms and institutions, and reliance on economic performance to sustainpolitical legitimacy. Such states may be most likely to face and least likely toendure "punishment" from the global economy.

Managing Costs and Benefits Despite the financial crisis, no Asian countries appear likely to reversecourse and reject globalization. Few Asians perceive the North Korean and Burmese modelsto be viable alternatives to the global economy, and even Malaysia has moved recently toloosen the capital controls it imposed during the depths of the financial crisis. Somegovernments have even welcomed the opportunity for reform; as a South Korean participantpointed out, President Kim Dae-jung has used the crisis to implement economic restructuring that his predecessor in South Korea alsoconsidered desirable but politically impossible.

See Also

Asia - Trade, Routes, Commodities

Nevertheless, the danger of backlash in Asia against globalization especiallyits social and cultural effects is real. A participant from Singapore noted thatthroughout the region there is growing anxiety over the impact of global forces on"national ways of life." Many Asians have chosen to view events as a new form ofimperialism originating in the United States a sentiment that has been exacerbatedby elements of arrogance in the Wests response to the financial crisis. In the yearsahead, Asian governments will be tested by two related challenges: the task ofcompensating the victims of the world economy, and the need to balance increasingly globalpolitical and cultural norms with traditional values and identities.

Emerging Civil Society - In this context, theemergence of an international civil society in Asia non-governmental groups andorganizations that pressure states on issues of concern, such as human rights, theenvironment, and social welfare may be a critical antidote to the negative forcesof globalization. As a participant from Singapore noted, the rise of an internationalcivil society in some senses represents a challenge to the state; NGOs whichby definition have no national loyalties that pressure governments to provide acleaner environment or to protect human rights often can pose a threat to those in power.

Nevertheless, these forms of "globalization from below" may help to ensurethat regional governments remain adequately sensitive to the costs associated with greaterintegration into the world economy or "globalization from above." It isin the long-term interest of Asian governments to accommodate the emergence of aninternational civil society in the region; these new actors can ultimately assist thestate in managing the harmful elements of globalization.

A New "Grand Bargain" The challengefor Asia of managing the complex forces of globalization could lead to tensions with theUnited States, as the rhetorical backlash against American influence in the regionsuggests. One participant from Singapore argued that to prevent globalization fromemerging as a source of tension in U.S.-Asia relations, a new trans-Pacific "grandbargain" is essential. For its part, the West must abandon triumphalist rhetoric, andrecognize that Asian concern over eroding values and social cohesion is legitimate.Indonesias experience suggests that concern about the possibility of internalfragmentation is justified particularly in the multi-ethnic states thatcharacterize much of the region and should be recognized as such in the West.

Asia, in turn, must cease demonizing the West for its role in spurring globalization.Participants were quick to note that Western countries have also been buffeted byglobalization, and managing its challenges will be a central item on the policy agendas ofWashington, London, Paris, and Bonn long into the 21^st century. Indeed, theresilience of U.S. presidential candidate Pat Buchanans distinctive brand ofpopulist isolationism not to mention the millennial fears spurred by the Y2K bug demonstrate that anxiety over globalization plagues even Americans.

About the Conference

Asias economic crisis has had a profound impact on the regions security environment. Through two conferences and a roundtable discussion hosted during 1998, the Asia-Pacific Center has explored in depth the near-term implications of the crisis: the suspension of arms modernization programs and military exercises, diminished solidarity within ASEAN, and the enhanced regional role of the United Statesto name only a few. As the crisis wore on, it became clear that the debate in Asia had shifted to the larger issue of globalization in the region. With financial support from the U.S. Pacific Command, APC organized a three-day meeting to examine the longer-term impact of the financial crisis, and globalization more broadly, on the Asia-Pacific region. This report was written by Christopher B. Johnstone, a Research Fellow at the Asia-Pacific Center. For more information on this and other programs, contact the Research Division at (808) 971-8900, or visit the APC web site at www.apcss.org.

Participants

Dr. Amitav Acharya
Associate Professor
Institute of Defence and Strategic Studies
SingaporeDr. Muthiah Alagappa
Director of Studies
East-West Center
Honolulu, HICapt Mark H. Anthony
Military Education Division
Joint Staff
Washington, DC

Dr. Jerry H. Bentley
Professor of History
University of Hawaii
Honolulu, HI

Dr. Donald L. Berlin
Professor of International Relations
Asia Pacific Center
Honolulu, HI

Dr. Lee Endress
Director
College of Security Studies
Asia Pacific Center
Honolulu, HI

Dr. Dru Gladney
Dean of Academics
Asia Pacific Center
Honolulu, HI

Vadm (Ret.) Mutsuyoshi Gomi
Visiting Fellow
Asia Pacific Center
Honolulu, HI

Dr. Harry Harding
Dean
Elliot School of International Affairs
George Washington University
Washington, DC

Dr. Huang Renwei
Director
American Studies Center
Shanghai Academy of Social Sciences
Shanghai, China

Mr. Christopher B. Johnstone
Research Fellow
Asia Pacific Center
Honolulu, HI

Mr. James A. Kelly
President
Pacific Forum/CSIS
Honolulu, HI

Dr. Byung-kook Kim
Professor of Political Science
Korea University
South Korea

Dr. Satu P. Limaye
Director of Research
Asia Pacific Center
Honolulu, HI

Dr. Michael J. Montesano
Assistant Professor
Asia Pacific Center
Honolulu, HI

Dr. Charles Morrison
President
East-West Center
Honolulu, HI

Dr. K.S. Nathan
Professor of International Relations
University of Malaya
Malaysia

Dr. Stephen E. Noerper
Associate Professor
Asia Pacific Center
Honolulu, HI

Dr. Leif R. Rosenberger
Economic Advisor to the Commander-in-Chief
USCINCPAC
Honolulu, HI

Amb Charles B. Salmon, Jr.
State Department Advisor
Asia Pacific Center
Honolulu, HI

Dr. Johan Saravanamuttu
Professor of Political Science
Universiti Sains Malaysia
Malaysia

Dr. Kusuma Snitwongse
Chair of the Advisory Board
Institute of Security and International Studies
Chulalongkorn University
Thailand

Mr. H. C. Stackpole
President
Asia-Pacific Center
Honolulu, HI

Dr. Rizal Sukma
Deputy Director of Studies
Center for Strategic and International Studies
Indonesia

Mr. Simon S.C. Tay
Faculty of Law
National University of Singapore
Singapore

Dr. Carlyle A. Thayer
Professor
Asia Pacific Center
Honolulu, HI

Dr. Nira Wickramasinghe
Senior Lecturer
University of Colombo
Sri Lanka

ABOUT THE ASIA-PACIFIC CENTER

The Asia-Pacific Center (APC) is a regional study, conference and research center funded by the U.S. Department of Defense. The Centers mission is to foster understanding, cooperation, and study of security-related issues among civilian and military representatives of the United States and other Asia-Pacific nations. The Center provides a focal point where national officials, decision makers, and policy experts can gather to exchange ideas, explore pressing issues and achieve a greater understanding of the challenges that that shape the security environment of the Asia-Pacific region. APC occasionally publishes articles on Asia policy issues written by APC research, staff, and fellows. The views expressed here are those of the author and do not necessarily represent those of the Asia-Pacific Center, the Department of Defense, or the United States government.