Paul Krugman, author of "Myth of Asia's Miracle," in Foreign
Affairs (1994), may have been on the money in his analysis of the myth of Asia's
economic miracle, but even he cannot resist acknowledging the influence of fickle global
capital in bringing that "myth" back to life. (See "In Recovery They
Trust," in Asiaweek, April 10, 1998)
And just how much of it is actually mythical? Amazing is it not that despite the continuing economic downturn, the very person who expressed his scepticism of the mythical miracle is now bullish about it, predicting double digit growth rates?
It is time that everyone acknowledges global capital for what it is: a wild-card. In the hands of the "right" people, it can be used to create miracles; or in the "wrong" people, cause horrors and untold hardship.
It is also time that we acknowledge that there are forces at work which are more powerful than governments: forces that create new forms of tyranny readily identifiable today as the media Mogul (as portrayed in the latest Bond movie "Tomorrow Never Dies") and, perhaps less readily identifiable, the fund manager - maybe the next Bond movie should be entitled, "To Kill a Philanthropist."
Acting in concert to maximise profits from the ubiquitous free market, the "evil" media Moguls and fund managers build irrational exuberance about business in Asia only to replace it with irrational pessimism soon after. Never mind what the real economy had really been all about. After all, with the "wild-card", even crony capitalism thrives.
And who needs the WTO, with governments forever bickering about obstacles to free trade and human rights? With careful planning, the very businesses run by undeserving though-hard-working locals in booming Asia can be taken over, beginning with the quick withdrawal of foreign-owned capital.
The strains on the private sector balance sheets caused by depreciating currencies and appreciating costs on credit, forces asset prices to fall making such companies ripe for the picking by foreign investors. And those that are unable to endure the temporary exodus of foreign capital out of East Asia can only leave more room for foreign "competition".
And with a bit of restructuring of government involvement or regulations forced upon by the International "Bailout and Suffer" Fund or better known as the IMF, these fund managers come back in full force. Everything goes back to normal and the Asian miracle becomes even more miraculous, except that it would have very little to do with Asians or Asian value systems. This is because the driving force behind the Asian economies, right down to their politics, would largely be foreign owned private sector corporations.
Is that really good news for the so-called New World Order or liberal political ideology advocates? Unlikely, since the ultimate driving force is still the Almighty bottom- line. Utilising the comparative advantage of Asia with its cheaper currencies, credit or capital costs and labour, Asia truly becomes the growth engine for the global economy in the 21st century.
And in the zero-sum game demanded by the Almighty bottom-line, this means the slow-down of growth in other parts of the world, to the extent that many if not all of the current centres of world power are transformed from the position of dominance to the peripheral.
So forget about democracy and human rights. Forget about transparency or accountability. The only things that matter would be money and crude military power.
Ahmad Faiz bin Abdul Rahman
11 April 1998.
[Currently, he is a Researcher with the Institute of Islamic Understanding, Malaysia (IKIM) and a Pro-temp Committee Member of the International Movement for a Just World (JUST).]