and 500 years to get an adequate understanding of the structure of the political and economic order in Asia. This is something I have not heard nor read in previous discussion about Asia. Unfortunately I am not a historian.
I am a journalist who has no training to look at things in a longer perspective. For a journalist, especially a person like me, whose newspaper was banned by the government, the famous Keynesian dictum is applicable to all things.
The dictum says, in the long run we are all dead. This is especially true today, when you speak of Indonesia.
Indonesia is a large country with a large number of questions. The current economic crisis, the worst in decades, has put Indonesia on a highly uncertain course.
I met an executive who argues convincingly that in Indonesia one can no longer afford to adopt the one year plan. Nobody knows, he says, whether we will still be in business next month. (I believe that the only person who has a very long perspective is President Suharto. He believes that he will reign Indonesia forever.) We must deal with and be open to new players in the global arena, which is the fast-paced if not volatile financial market, as Dr. Pakkasem has mentioned earlier. To paraphrase Lawrence Summers, the U.S. Under-Secretary of Trade, the man behind the IMF who plans to bail out our Asian economy, the financial market is no longer a kind of oil to lubricate the wheel of growth. It is the wheel of growth. Increasingly it seems that it is the financial market that decides losers and survivors. Of course there is strong American bias in this statement, since American capitalism is more dependent on the role of the financial market, as compared to the Japanese, with its closer link to the banking industry. Still the current crisis tends to press Asian countries to recognize that there are limits in the ways they manage their economy. They will have to be adopted to this new game and its players. An American publication calls these players "Digitocrats". These are people mostly in their thirties who are highly skillful at using the fastest information technology to manage large sums of funds in a global market, and therefore, become a kind of invisible constituency which no Asian country can have control of. I am not sure whether these people, this new constituency, will generate a more democratic society, but it may press for the demise of political patronage of business practices in the region. These "Digitocrats", together with the multinationals, have succeeded in replacing the so-called U.S. position, the only super power left.
It is interesting to know how much leverage the IMF has, to influence President Suharto with his determination to install a currency board system despite the IMF's objection to it. It is also interesting to monitor how much impact the financial market responds to Suharto's plan, The situation is certainly also a special kind of anarchy that even makes George Soros concerned. The problem is that it's not entirely dependent on a region-based political decision to create economic stability, whatever that means. We can have a system to monitor potential economic and financial problems among ASEAN countries, as mentioned by Dr. Pakkasem. This is a good idea.
However, to monitor, is one thing. To set the course to the lines preferred by the Asian governments is another thing. Because ASEAN regional ties are not yet a full-blown reality. Mr. Mahatir wants ASEAN countries to reduce the use of the U.S. dollar and have local currency for regional trade. But the intra-ASEAN trade is only 23% of the total $170 billion traded by ASEAN states in 1996. But allow me to emphasize here that despite the role of the global capital market, proximity does matter. The way Indonesians deal with the crisis and ensuing racial tension or violence, will have significant impact on the future of the regional cooperation. Let me quote one Brazilian writer. He said, "History is also a history of a few metaphors". Following him, we could say that, geography is a history of a few encounters. If Asia is both history and geography, we may imagine that it's a bit of imagination and a bit of real physical communication. We will never erase this fact. In a sense, the longer perspective suggested by Dr. Shiraishi is very helpful. In the long run we will all be dead. But many problems will be solved.
｡?PAKKASEM
I think Indonesian case will be a test case for the entire G7 meeting. It's going to be a real challenge, not only for Japan, not only for Asia, but for the rest of the world. I think Indonesia poses as a good time bomb for all of us.
The next time bomb bigger than Indonesia, I think, is China. So globalization, liberalization, Americanization, Anglo-Saxon rule still implement practices strictly. The whole world becomes insolvent, except Wall Street. They have everything. They have money, they have the rating companies and they are behind the IMF. Now the decision making center is not Washington. It's Wall Street. Next, Professor Lee.
