REPORT FROM THE BIENNIAL CONFERENCE 
OF THE ASIA-PACIFIC CENTER
AUGUST 30 - SEPTEMBER 2, 1999  HONOLULU, HAWAII

Asia-Pacific Security in a Time of Economic Recovery

Introduction

In an effort to stay at the forefront of debate on regional security issues, the Asia-Pacific Center for Security Studies held a four-day conference featuring presentations and discussions among the region’s top government officials and analysts of international affairs. The biennial event was divided into two broad sessions: a day of subregional panels centered on presentations from officials representing the major countries of Asia; and a day of concurrent working group sessions that addressed themes and issues relevant to all countries in the region. Representatives from more than 30 countries in the Asia-Pacific and beyond were in attendance. With the exception of formal presentations, discussions were conducted on a non-attribution basis to encourage frank discussion.

Part I: Regional Panels

Northeast Asia 

While all panelists agreed that the Northeast Asia subregion is relatively stable at present, there are concerns that this stability could be shattered by a number of prominent security issues. In general, traditional security issues (e.g., strategic miscalculation by the recalcitrant North Korea, arms proliferation, escalating territorial disputes, changing bilateral relations and military alliances, etc.) continue to dominate the concerns of this subregion. A number of areas where conflict could potentially erupt in the region were identified: tensions on the Korean Peninsula, the issue of Taiwan, and increasing competition for resources in the South China Sea. Panelists also expressed a growing recognition that globalization, recent technological advances, and “new threats” to security (e.g., environmental degradation, organized crime, maritime piracy, illegal migration, etc.) have and will continue to fundamentally reshape the strategic balance in Northeast Asia. As such, these ascending security threats will warrant more attention in the near future. 

Virtually all panelists pointed to developments on the Korean Peninsula as the region’s primary “hot spot.” Worries over North Korea’s intentions have been renewed by indications that the Democratic People’s Republic of Korea (DPRK) is preparing another test launch of its Taepodong missile. Although tensions have abated somewhat in recent weeks, panelists noted that a missile launch would be especially troubling considering the lingering suspicion of a North Korean nuclear program. Concern was also expressed about North Korea’s possible implosion and the strategic implications of such an event. Although they differed on policy specifics, members of the panel were unanimous in their assertion that tensions on the peninsula should be resolved through dialogue and cooperation.

Some participants cited the possible deployment of a Theatre Missile Defense (TMD) system in the region as cause for concern. These panelists drew attention to the potentially destabilizing effects that a TMD program could have on Northeast Asia. Detractors of the program were unified in their fear that a TMD system would create tension and shift the existing balance of power by eroding China and Russia’s strategic deterrent, and thus spark a new round of arms proliferation and military build-up in the region.

Members of the panel also cited escalating territorial disputes as a common concern. Some panelists highlighted the recent armed conflict on the South Asian subcontinent as particularly unsettling given the confirmed nuclear capabilities of the combatants. Other panelists underscored the potential for conflict between the major powers in the Taiwan Strait as more alarming for the region. Participants differed in their suggestions for solving the situations—some emphasized “deterrent” policies while others favored a “dialogue” approach. Despite the divergences, however, members of the panel agreed that long-term management of these disputes and preservation of peace in the Asia-Pacific depended on maintaining constructive bilateral relations between countries of the region, formulating an effective partnership framework among regional powers, and continuing development of multilateral fora.

Southeast Asia

Panel members conveyed their opinions on many regional concerns, focusing on the following specific issues:  1) the lingering effects of the 1997 economic crisis, 2) violence in East Timor, 3) the continuing territorial disputes and claims of sovereignty in the South China Sea, 4) ongoing differences between China and Taiwan, and 5) the potential for nuclear escalation in the region.

The currency crisis that began in 1997 produced the two worst years for the regional economy in recent memory.  Countries accustomed to seeing a steady 6- to- 8- percent annual growth are now unevenly recovering from two years of little or no growth.  The subsequent decline in the standard of living has similarly impacted both national defense and regional security.  Most ASEAN states were forced to cut defense budgets, suspend arms procurement programs, and reduce allocation for defense research and development.  Unchecked, this trend could undermine overall defense capabilities and disrupt military programs designed to carry out surveillance of exclusive economic zones and the ability to combat piracy, illegal immigration, and drug trafficking.  Panel members were firm in their belief that ASEAN should maintain its economic leadership in the region to facilitate full economic recovery, thereby allowing much needed improvements in regional security.  

Over the past two years, Southeast Asia has experienced a time of relative peace and stability.  However, recent sovereignty disputes in Indonesia and between China and Taiwan sound the clarion call of concern over potential flash points that could jeopardize regional stability. 

Indonesia remains torn by simmering ethnic and religious tensions as provinces and territories clamor for greater autonomy or independence.  Violence in East Timor erupted between pro- and anti-independence groups after the August 30 referendum produced a clear call for secession.  The United Nation's sponsored vote was seen as a success for self-determination, but procedures to contain post-election violence, if in place, had no effect.  The Indonesian military, which is currently attempting to reinvent its place in Indonesian society, may hold the key to the successful resolution of this and subsequent issues of national sovereignty.

Little has been done to resolve the worsening territorial disputes concerning overlapping claims in the Spratly Archipelago.  Its economic promise in fishing, petroleum, gas, and mineral resources, in addition to the islands’ proximity to strategic sea lines of communication, have prompted several countries to build and man permanent structures on various reefs and atolls claimed by other nations.  In addition to unresolved questions of sovereignty, panel members feared the increased military presence in the area could lead to militarization of the islands, and in turn, further escalation of regional tensions. 

Panel members expressed some concern over the rhetoric exchanged between Taiwan and the People's Republic of China.  Taiwan's decision to abandon the one-China doctrine and declare it would regard ties with Beijing as "one Nation, two States" infuriated China and diminished the prospects of a peaceful reunification in the near future.  Panel members view with dismay China's refusal to discount the possibility of using armed force to achieve its goal of recovering full control of Taiwan.  This position has been a catalyst for both sides to pursue a destabilizing arms build-up, with Taiwan buying 150 F-16 fighters, and China's construction of an aircraft carrier.

Southeast Asian nations are concerned about the nuclear build-up in Asia.  Recent nuclear tests by India and Pakistan, combined with North Korea's nuclear research and long-range missile development are unsettling.  These events may have the effect of encouraging other regional members to pursue nuclear technology as a security safeguard.

Other potential flash points alluded to by panel members included the danger of increased international terrorism, environmental degradation, drug trafficking, and piracy on the high seas. 

South Asia

As South Asia grapples with evolving external security concerns, internal security has become a major dilemma.  Nearly all the countries in the region have serious internal security threats that have forced the commitment of major economic resources to control. 

In Sri Lanka, internal security problems threaten the stability of the country.  Sri Lanka is still struggling economically as it slowly progresses towards solution of the Tamil insurgency.  The economy has been crippled, as the country has had to deploy forces throughout the island to battle terrorism.  The economic cost alone of combating terrorism threatens internal stability.   

India has had to commit significant resources to containing the terrorist activities of Kashmiri dissidents.  This deployment to control terrorism has serious economic impacts on the rest of the country.  Nepal also is struggling to cope with increased internal terrorist activity that forces the government to commit scant economic resources to control.  

India and Pakistan's nuclear testing in May of 1998 has resulted in increased uncertainty between the two powers.  In their recent border escalation in Kashmir, both countries limited their military activity to the Kashmir border area alone.  While tension escalated, neither side used or threatened to use their newly tested nuclear capabilities.  In fact, deployment of troops was contained in the affected region.  India and Pakistan will continue to struggle with border differences and have continued to remain at odds in the matter of an overall solution to Kashmir.  Pakistan still feels that a bilateral approach with India will not produce viable results.  This distrust will continue to be a major impediment to future bilateral solutions.

All countries in the region feel uneasy about the possibility of a hegemonic India.  With little U.S. presence and Chinese influence dwindling as India works to resolve differences with her northern neighbor, border disputes and economic differences loom as even more important.  India's quest for superpower status has also led to some mistrust by other countries in the region.  Smaller countries rely on multilateralism for survival.

Poverty throughout the region remains an extremely significant security concern.  All the countries in South Asia have difficulty providing for basic human requirements.  Nutrition, education, health care, and employment trends have not shown significant improvement. South Asia's concentration of population intensifies these problems.  One-fifth of the world's population is concentrated on 2 percent of the landmass.  

Another acute and interrelated problem facing the region is the environment.  As these nations confront internal and external security threats, environmental degradation has emerged as an essential concern.  Due to the concentration of population, poor education, and necessary use of resources to sustain those living on the land, the environment suffers greatly. 

South Asia's security challenges for the future center around peaceful coexistence and handling internal strife.  Economic development, resources and population management, and protection of the environment are critical, interrelated concerns.  

South Pacific/Oceania

Security issues in the South Pacific include traditional worries about flash points in the wider region—such as Taiwan and the Korean Peninsula—as well as less traditional security concerns such as environmental degradation and global warming, transnational crime (including illegal drug and human smuggling) and natural disasters.

From a regional perspective, several country presenters from the South Pacific expressed concern about the continued effects of the Asian economic crisis and its impact on regional organizations and institutions.    Among other things, there is concern that the economic crisis has resulted in reduced military spending that potentially could cause military imbalances between countries that could be destabilizing.   Also of concern is the usual litany of flash points that dominate the region, including tension in the Taiwan Strait, instability in North Korea, potential conflict in the South China Sea, etc.   One participant stressed that the stability of the China–Japan–United States relationship was key to regional stability.

Like other parts of the Asia-Pacific region, the South Pacific region has its own share of flashpoints.   Instability in Papua New Guinea—especially Bougainville—was listed by several presenters as a major concern.   Concern was also expressed about instability in the Solomon Islands, sparked when Guadalcanal militants drove thousands of Malaitans back to their own island because of  conflict over land and jobs.  This conflict has had a very negative impact on the Solomon Islands’ economy and has resulted in severe unemployment.

Alongside traditional security concerns, many presenters noted the importance of rising nontraditional security issues.   Transnational crime—including drug trafficking and people smuggling—was cited as a major worry by many presenters.   In the South Pacific, concern about global warming-and its potential impact on sea-level rise-was described as being a major security issue for Pacific Island states.  Moreover, one presenter from an island state noted that illegal fishing constitutes a major security concern.

Part II: Working Group Discussions

Arms Proliferation in the Asia-Pacific

The specter of arms proliferation looms in the Asia-Pacific region.  But just how serious a problem is it?  This issue served as the backdrop for discussion in this working group.  In embarking upon a thematic tour of the region, the participants addressed the issue of weapons of mass destruction, the ability of various nations to deliver such weapons, and the industry and technology that are connected with these issues.  The panel’s remarks encouraged many probing questions and insightful comments from the floor.

The first of the working group’s three presenters was a senior defense analyst from Japan, who focused on weapons of mass destruction and their delivery systems— particularly ballistic and cruise missiles.  He made a comparative assessment of the capabilities of the region’s most powerful countries—noting, with particular interest, developments in North Korea, China, Russia, South Korea, Taiwan, and Japan.   

He argued that a three-way combination of export control, deterrence, and missile defense systems may be helpful in stopping proliferation and the use of ballistic and cruise missiles.  He was guarded in his optimism about the potential for success owing to the need, arguably not yet realized, of the international community to strengthen various nonproliferation efforts in a coordinated manner.  

An Australian scholar addressed the issue of conventional arms control.  He noted that, in the 1980s and into the 1990s, Asia doubled its share of world military expenditure. He went on to argue that these acquisitions were strategically justified. While the Asian economic crisis has led to a lull in this growth, he did not foresee a long-term slowdown.

Efforts to respond to weapons proliferation seem far more symbolic than real, and there is little prospect over the next decade for effective arms control or multilateral security dialogue.  The commitment of the region to self-reliance and modernization remains strong. He did think it is nevertheless useful to consider several sorts of arms control measures:  transparency (Regional Arms Register); avoidance of inadvertent escalation through reciprocal acquisition and modernization; prevention of long-range, land-attack cruise missile proliferation; and tightened control of information warfare technology.  

An American space technology expert explored the increasingly complex area of technology transfers and export controls.  She noted that Americans (particularly those in Washington, D.C.) have been enthralled recently with Chinese space activities, primarily in connection with the Cox Report, which came out last spring.  The report alleged that the Chinese had been spying at laboratories in the United States, and their advancements in missile technology were attributable to Chinese scientists’ work with American companies launching U.S.-built satellites.  Both of these findings are sources of significant controversy: They are also extremely important developments in their own right. 

Equally important is the manner in which the United States responded. She concluded that the American response may ultimately be counterproductive in several areas critical to national security.

Three key themes emerged from the session:  prospects for conventional arms control in Asia are not good; the impact of the Asian economic crisis on arms control is only temporary; and partisanship and regulation are having an impact on the aerospace and related industries.

·         Prospects for conventional arms control in Asia are not good.

While North Korea’s development of nuclear warheads is stalled, it is acquiring missile capability—particularly missiles able to deliver chemical weapons—and this capability is being exported.  China’s willingness only to curb surface-to-surface missiles is representative of its lukewarm commitment to promoting arms control—due in part to its view that the United States is leaking missile technology into East Asia.  Russia’s economic difficulties continue to undercut efforts to limit the exportation of this technology. 

South Korea and Taiwan have been effectively pressured into accepting limits pressed by the United States but still enjoy significant short-range capabilities.  Japan— not possessing such weaponry—cautiously monitors the situation.  Export controls, mutual deterrence, and deployment of defense systems have been viewed by some as possible means of limiting the threats of missile technology proliferation.  Nevertheless, more and more countries are acquiring WMDs; thus, there is an ever-increasing invitation to war, not peace.  Control, to a large extent, depends on political stability.

 ·         The economic crisis’ significant but temporary impact on arms purchases will not prevent another cycle of increased procurement, which can be expected around 2010. 

To date, arms control efforts in the region have been virtually nonexistent.  While significant disparity among nations has contributed to acquisition programs, self-reliance has taken on a new dimension—but not necessarily a bad one.  In the meantime, there are possibilities for progress.  These include the development of transparency measures, fewer examples of action-reaction dynamics, limitations on cruise missiles and related technology, and serious attention to control of information warfare. 

Despite the impact of the financial crisis in the region, the long-term prospects for conventional arms control are not good. Emphasis is likely to be on offensive versus defensive weapons—while the advantage of ballistic missiles is transitory.  Still, it is difficult to say whether current trends are actually fueling a true arms race in the region. 

·            Impact of partisanship and regulation on the aerospace and related industries is significant.

Projections of the potential monetary bonanza from commercial satellites are becoming increasingly tenuous.  The Asian financial crisis, a string of rocket failures, the prospects of rising insurance costs, and increasingly restrictive U.S. export policies are combining to threaten the vitality of the industry.  This will lead to funding problems for satellite programs.  Export policy and technology issues due, in large part, to reactionary legislation and regulations arising out of a knee-jerk response to the Cox Report are at the heart of the problem.  If the United States wishes to continue to walk the line between management of proliferation and encouragement of capitalism in the aerospace industry, it must move quickly to update both the rules and processes for doing so.

Military Roles in Transnational Security

This working group looked at recent military trends in the Asia-Pacific region in light of three major developments: the growing importance of transnational security threats to security planners, the impact of the recent financial crisis, and the implications for the Revolution in Military Affairs (RMA).

A German scholar focused on the impact of the Asian economic crisis on military modernization efforts in the East Asian region. Up until 1997, many Asian countries were actively engaged in modernizing their military forces. Although global defense expenditures declined in the 1990s, the share of major conventional weapons deliveries in Asia increased from 31 to 41 percent during the period from 1988 to1997. This modernization has been especially pronounced in Northeast Asia, where five states—China, Japan, Taiwan, North Korea, and South Korea—accounted for 70 percent of all military expenditures in East Asia. 

The economic crisis that began in 1997 reversed that trend in most cases.  First, the economic crisis led to a dramatic currency depreciation that has resulted in reduced arms imports.  Simultaneously, many governments in the region have had fewer funds for military training and exercises.   This has had a major impact on long-term modernization efforts. 

Reduced defense spending in the Asian region has had a number of short and long-term implications.  Most immediately, the crisis has resulted in fewer arms imports to the region.  Moreover, funding limits have, in many cases, reduced operational readiness. For the longer term, reduced defense spending in the region has thwarted American efforts to get Asia to carry a greater defense load.  It has also challenged U.S. efforts to forge—or maintain—strategic alliances in the region, as regional partners are unable to carry their weight in military matters.

A senior Thai military officer focused on the increasing role of military forces in addressing transnational security issues. In the post–Cold War world, transnational threats have emerged as major security concerns for many nations.  Unlike traditional security threats (such as a military invasion or missile attack), transnational threats thrive despite the existence of national borders.  They are often protracted threats that are driven by non-state actors.  Examples include narcotics trafficking, illegal migration, terrorism, arms trafficking, and transboundary pollution.

Military forces are often ideally suited to deal with these challenges because of their training, equipment, and expertise. Some governments are more eager to deploy military forces against transnational threats than others.  However, in other countries, political or legal barriers make such deployments impracticable. As countries increasingly deploy military forces against transnational issues, they must also consider the impact that such deployments might have on readiness against more traditional security threats.

An American military officer focused on the impact of the Revolution in Military Affairs (RMA).  Essentially the RMA uses technology to enhance war- fighting capabilities. Although many military planners are placing much expectation and faith in the RMA, the reality is that it may not be a cure-all. Among other things, the RMA may result in a reduced size for military forces, may cause pressure for reduced deployment, and may prompt other countries to pursue technological advances. 

The RMA may also have negative consequences for America’s allies in Asia.  Because RMA advances are costly to implement, allies may not be able to make the investments necessary for smooth interoperability.  Moreover, as military budgets are forced to fund RMA advancements, less money will be available for preventive defense mechanisms.

Asia’s Economic Future

This working group explored the extent of Asia’s recovery from the financial crisis, and the impact of the economic turmoil on regional security. Discussions also considered the possibility of the Asian economy going into remission, as well as the institutions that are posed to shape the future of the region’s political economy. Impetus for the decisions and dialogue came from the three presentations: the first addressed India’s approach to globalization and economic liberalization; the second examined Asia’s economies after the crisis; and the third explored Asia’s economic institutions and the international economic order.

In his presentation, an American authority on South Asia argued, “the fundamental problem with India’s low rate of economic growth is the policy choices adopted by its political leaders and managed by its bureaucrats had become counterproductive.  This is not to say that every aspect of India’s economic policies has been completely flawed.  In fact, they produced greater growth rates than before independence”. 

He went on to assert: “while India’s economic policies persisted beyond their usefulness, they may yet prove to have laid the basis for more rapid growth in the future.”  The problem today is that although India is moving beyond the policies of the past, it is doing so very slowly. He noted that due to the lack of intricate ties to the global economy, India’s economy has been surprisingly resilient, despite the Asian financial crisis and post-nuclear sanctions.  He concluded, “There are real signs that a slow, but inexorable shift toward greater GDP growth, integration with the global economy and liberalization has begun.”

In the second presentation, an American economist illustrated the remarkable GDP growth turnaround in Asia, and noted that the cause of the recovery during the first half of 1999 was Keynesian fiscal stimulus, lower interest rates, and capital inflows.  He also pointed out a new volatility in the second half of 1999, and asserted regional reform efforts may be losing momentum, as evidenced by declines in stock and currency markets.  The “unfinished agenda”—corporate restructuring and debt reduction, for example—confronting many Asian economies threatens to return the region to economic recession.

The final paper, presented by a Japanese political scientist, examined the past and future prospects of APEC. He first examined the development of APEC over the last decade, and analyzed the “implementation of conflicting views over the shape of the APEC and its role in the region as well as at the global level.”  He then explored the role of APEC in interregional relationships and the next round of World Trade Organization (WTO) negotiations. He concluded, “Given its combined huge economic power of the member economies, APEC will be the most important economic institution in Asia [and has the] potential to make a significant impact on the future shape of the international political economy.”

In conclusion, globalization was a central theme that emerged from the presentations and discussions. Globalization was viewed as being at Asia’s doorstep and as the catalyst that would fuel more rapid economic development in the region. “Going global” was seen as having negative aspects as well, such as, the potential for rapid capital outflow.  But overall globalization was viewed as essential for economic development, along with other factors such as a level playing field, open markets to investors, and fair competitive practices.

The Future of the Asia-Pacific Community 

This working group explored the status of institution-building efforts in the region after the financial crisis. Participants agreed that although a broader sense of common identity has begun to emerge in the region, an Asia-Pacific “community”—however defined—is still far in the future. Indeed, Asia’s economic crisis has dealt a serious blow to efforts to form a common purpose in the region.

Participants noted that the ASEAN states have been the foundation of Asia’s nascent regionalism. Southeast Asian governments together have been the driving force behind APEC, formed in 1989 to promote trade and investment liberalization in the region, and the ASEAN Regional Forum (ARF), which was created in 1994 as a mechanism to address regional security concerns. Both organizations have come to adopt the principles that guide ASEAN itself: consensus-based decision-making that emphasizes voluntary, rather than negotiated and enforced, commitments; inclusive membership and equality among all participants, as evidenced by the rapid expansion in membership in both APEC and ARF; and respect for sovereignty, particularly the principle of noninterference in domestic affairs.

Although the “ASEAN way” was often criticized in the West before the crisis as too slow and cumbersome, the region’s approach to institution-building, nevertheless, maintained a certain credibility. Southeast Asia’s striking economic dynamism strengthened the region’s collective voice on the world stage, particularly on development matters. ASEAN’s ability to forge and maintain a generally unified face to the world—despite the diversity of its members—similarly increased its credibility. Finally, although many of its achievements were small in scale, the region had developed a solid track record of problem solving among its members—most prominently in addressing Cambodia’s emergence from civil war during the early 1990s. Indeed, the relative peace in a region once fraught with conflict is testament to the success of the “ASEAN way.”

The onset of the financial crisis, however, has undermined each of these elements of ASEAN’s strength. Most obviously, the crisis has damaged the credibility the region cultivated by virtue of its economic prosperity; in short, the Asian “miracle” has lost much of its luster. Similarly, where once ASEAN was united and cohesive, the organization is now beset by internal division. The onset of the financial crisis brought out tensions among member states; relations between Malaysia and Indonesia in particular were shaken by a sudden outflow of illegal Indonesian migrants landing on neighboring shores. The crisis also has shaken ASEAN’s core principle of non-interference in domestic affairs, as some members have argued for a mechanism in which members’ economic policies can be monitored—and perhaps even criticized. When combined with the expansion of ASEAN membership to include Cambodia, Laos, and Myanmar, the organization’s capacity to make swift decisions is even more open to question. And with Indonesia, ASEAN’s core member, troubled with political unrest and still teetering on the brink of economic collapse, the organization’s ability to stay at the forefront of Asian regionalism is in doubt.

Unfortunately, other actors in the Asia-Pacific region appear to be no better placed to lead the community-building effort. The United States is seen by many in the region as an arrogant hegemon. The American response to the financial crisis, regardless of its merits, won few friends in Asia: after first downplaying the significance of the crisis, Washington chose not to provide assistance to Thailand, and then aligned itself closely with the unpopular policies of the International Monetary Fund (IMF). Many Asian participants also argued that the NATO intervention in Kosovo raises questions in the region about American respect for national sovereignty—a subject that remains deeply sensitive in Asia. Although the American role in the region remains central, Washington’s ability to lead is constrained.

Japan’s position is similarly weak. Tokyo was harshly criticized as indecisive and slow to respond during the crisis. Although Japan did provide some $80 billion in assistance to the region, many observers saw the aid as only a reluctant response to outside pressure. The long-term struggles of the Japanese economy have also eroded Tokyo’s stature as a regional leader; much of Japan’s influence in the region has been predicated on its economic strength. Finally, one participant noted that the nature of Japanese identity and nationalism—centering on a view of the nation as unique and separate from both the West and Asia—limits Japan’s ability to lead in Asia.  

China’s role in the region is more complex. On the surface, Beijing appears to have capitalized on the financial crisis to strengthen its leadership profile. China has steadfastly maintained the value of the renminbi, for example, despite immense pressure to devalue the currency; it also contributed aid under the IMF packages for Thailand and Indonesia, and offered important political support to ASEAN at a time when the organization’s leadership of ARF was facing criticism. Indeed, in the words of one panelist, China was ASEAN’s “Man of the Hour” during the crisis. At the same time, however, lingering doubts about Beijing’s long-term intentions in the region—and in particular doubts about its commitment to multilateralism in Asia—undercut its ability to exert effective leadership.

In light of Asia’s lingering economic difficulties, and the diminished stature of several key powers in the region, participants agreed that the effort to strengthen institutions and build a regional community has been damaged considerably. Nevertheless, one panelist suggested that the way forward lay in adopting “new principles” to guide policy and diplomacy in the region. In particular, Asian countries should embrace a cooperative approach to security, not founded on traditional “zero-sum” approaches to state interaction. The “enlightened” use of power, and restraint in the development and use of military force, are at the core of this approach. With the emergence of strong, viable multilateral institutions in Asia still in the future, the practice of “enriched bilateralism” recommended by a senior American military official—which emphasizes greater sensitivity to local views and needs—may be the best way forward.

Governance and the Financial Crisis

Discussions in this working group centered on a number of key questions including.  For example, 1) What is meant by governance? (e.g., By whom? For what purpose?) and 2) What is meant by diminished expectations? (e.g., Whose expectations? About what? Why have expectations diminished? What baselines should we use for comparison?)  From the outset, participants felt it important to address the conceptual ambiguities related to this issue.  More specifically, the distinctions between governance and government, and the links between governance and order need to be clearly defined.  In addition, because some languages do not have a word that equates to governance, great sensitivity needs to be given to its usage.

A Thai scholar examined the impact of the 1997 Asian economic crisis on civil society and democratization in Southeast Asia. The presentation focused on the effects wrought by the crisis on the middle class, civil organizations, and the development of civil society in Southeast Asian countries. 

He concluded that the crisis has brought with it more political open space for civil society to expand and strengthen. This, he argued, is because people in countries touched by the crisis are convinced that political openness, transparent and accountable government administration, good corporate governance, and the presence of a strong and vibrant civil society are conditions for preventing a recurrence of the crisis. Finally, he argued that although every country in Southeast Asia has embarked on the process of strengthening civil society, the pace has not been uniform.  On one end of the spectrum is Vietnam and Myanmar, while Thailand and the Philippines are at the other, with Singapore and Malaysia situated in between and Indonesia as uncertain.

A European expert on India turned to the issue of conflict engendered by ethnic and religious pluralism.  During his presentation, he explored 1) the reasons why ethno-nationalist movements vary, and 2) the appropriate policies for their management.  He also argued that although his case studies were drawn mainly from South Asia, the model he was advancing is applicable to other cultural and temporal contexts as well.  In general, the presentation found that order is paramount to managing conflict stemming from ethnic and religious pluralism. That is, the state must be powerful, governance is essential, and both national and municipal policies, practices, and procedures must reflect the aims of the people. 

A senior Indonesian government official presented a paper that dealt with the impact of the Asian financial crisis on selected aspects of democratization and political transition in Asia. In her presentation, she looked at the interplay between the rising expectations of the governed—i.e., for greater freedom and prosperity—and a state’s varying capacity to meet these demands, with an emphasis on the consequences that can occur from reduced provision of public goods.

In sum, she asserted that the financial crisis was positive in some respects for the countries of the region. Namely, the fallout from the crisis accelerated the transition to democracy in many countries. This is especially true for Indonesia, where reform of the political system, which was estimated by some observers to require 15 years to complete, took place within less than a year.  However, she was quick to add that the crisis posed political and social problems that have made more difficult the struggle to consolidate the democratic process—i.e., to resolve ethnic conflict, crimes, and regional rebellions, and to dissolve despair and jealously.      

U.S.–China Relations

Two working groups discussed recent developments in Sino-American relations. The first group focused discussion on the U.S. Security Strategy for the East Asia Pacific Region (EASR) document published by the U.S. Department of Defense on November 23, 1998.  This was the fourth such report since the first one published in 1990.  A panel of three representatives from the United States used different approaches in discussing the report.  A member of the Chinese delegation present at the conference offered commentary. 

A former senior American naval officer examined the report in an historical context, highlighting enduring U.S. security interests and the continuity of policy reflected in the report.  He identified six elements of the U.S. security policy embedded in the EASR document: 

·         Securing and invigorating bilateral alliances in the region.

·         Engaging China and having China recognize that the United States has a legitimate security role in the region.

·         Deterring North Korea.  Preventing war on the Korean Peninsula, and preventing nuclear proliferation.

·         Maintaining U.S. security policy with respect to Taiwan.

·         Supporting multilateral dialogue in Asia

·         In Southeast Asia, replacing basing with a network of military access arrangements.

An American officer with extensive experience in China compared the 1998 EASR to the last report published in 1995.  He noted no fundamental differences in U.S. strategy between the two documents.  One change, however, has been the broader definition of security with the inclusion of transnational security issues in the 1998 report.  It was also noted that the 1998 report contains the first official mention of continued U.S. presence after a Korean reunification or reconciliation. 

A senior American observer of China described the report as a "political" document -- "political" in that the report responds to interest groups within the U.S. government as well as responding to concerns of friends and neighbors in the region.  He asserted that as a consequence, inconsistencies and tensions arise in responding to the various and sometimes opposing concerns.  He highlighted four basic inconsistencies: 

·         U.S. power is growing in an absolute and relative sense within the region.  However, downplaying this growth causes a myriad of contradictions.

·         The United States attempts to engage China on the one hand and hedge on the other.

·         Bilateral arrangements are the foundation of the U.S. strategy in the region in contrast to the emphasis on multilateralism in the region.

·         The Taiwan Relations Act strains the one-China policy.

A Chinese delegate acknowledged that the report does seek common ground in its effort to reassure the nations of East Asia and the Pacific.  He observed the "layering" of U.S. bilateral relationships in the region, with the United States giving its relationship with Japan greater importance, followed by its other alliance relationships in the region.  He observed that with the importance placed by the United States on these bilateral relationships, they are not going to be transformed anytime soon into regional or multilateral arrangements.  He also stated this allays earlier fears that the United States was trying to formulate another NATO.  He noted that the United States has roles to play not only as a balancing force in the region, but also as the dominant force in the region. 

The panel presentations and the discussions that followed yielded three broad areas of agreement.  First, the report reflects a continuity of U.S. policy in the region with key elements of that policy being: the criticality of Japan; the need for continued U.S. presence in Korea after reunification or reconciliation; and the continuing role of the United States as a balancing force as well as the dominant force in the region.  Second, the EASR intends to reassure by emphasizing common ground.  The report does serve to allay fears.  An earlier criticism of the report as “anodyne” was also viewed as its greatest strength.  One observer did point out, however, the report missed an opportunity to correct perceptions regarding the controversial figure of "100,000" -- the prescription for the level of forward-deployed U.S. troops in the region.  Finally, there was agreement that bilateral alliances continue to be important since they underpin the move to any multilateral effort in the region.

A panel of Chinese experts similarly presented views of China’s first Defense White Paper, issued in 1998. The group noted that the document describes three key objectives of Chinese security policy:

·         Internal stability and prosperity.

·         Peace and stability in surrounding regions.

·         Dialogue with all countries in the Asia-Pacific region.

According to the panel, Chinese defense policy centers on several tenets. First is the so-called New Security Concept. This approach to regional security insists that formal military alliances represent “Cold War thinking.” Instead, countries in the region should stress the concepts of mutual security and peaceful coexistence, developing relationships that are not threatening to third parties. Also embedded in this framework is the concept of “comprehensive security,” which emphasizes the nonmilitary factors—such as social and economic variables—that influence a nation’s well-being.

Another key tenet of Chinese defense policy as laid out in the white paper is the government’s focus on “economic construction.” According to the Chinese delegation, this focus implies that China will adopt an essentially defensive posture with a limited defense budget. In addition, the white paper states that a civilian government, under the leadership of the Communist Party, will maintain strict control of the military.

The Chinese participants pointed out that a series of recent events have challenged the premises embodied in the white paper. In particular, the panel noted the adoption of the new U.S.–Japan defense guidelines; the bombing of the Chinese embassy in Belgrade; Taiwanese President Lee Teng-hui’s comments about “state to state” relations; and the recent successes in the testing of America’s land-based theater missile defense system.

Despite these developments, however, the delegation insisted that the basic elements of Chinese defense policy remain unchanged. At the same time, however, Beijing will work hard to prevent the involvement of outside powers in cross-straits relations. The panel also suggested that Beijing will continue current levels of growth in the defense budget, while working to improve military technology. At the same time, China will maintain opposition to the deployment of a theater missile defense system in Asia.

Despite Chinese criticism of Washington’s military alliances in Asia—and Beijing’s general wariness about American influence in the region—the panel also stressed that China recognizes the United States as a legitimate Asia-Pacific power. Indeed, one panelist insisted that China would follow a policy of “three no intentions”: no intention to dominate the Asia-Pacific; no intention to push the United States out of the region; and no intention to replace the U.S. presence in Asia.

Participants in the discussion generally agreed that the Chinese Defense White Paper represented a welcome first step in improving the transparency of Beijing’s defense policy. Further steps are needed, however, to address regional concerns about Chinese intentions.

In particular, participants and panelists agreed that future steps to build confidence might include improved transparency in Chinese force structure, doctrine, and equipment acquisition; more complete information on defense budgets; greater elaboration of Beijing’s approach to resolving maritime territorial disputes; clarification of China’s stance on the forward deployment of U.S. forces in the region; and further elaboration of China’s “new security concept.” American participants stressed this final issue in particular, noting that there was some debate about the significance of the apparently new Chinese approach to regional order.

Demographic Change in Asia

This working group focused on the security implications associated with the general trend towards an aging and mobile population, which increasingly resides in urban areas.  Issues addressed included the prevailing demographic trends within Asia, the dynamics of migration patterns in the context of globalization and the post–Cold War security environment, and the impact of rapid urbanization. 

A Filipino scholar presented a comprehensive situation report on demographic trends, while focusing on the security implications associated with changes occurring within Asian population growth patterns.  Pointing out that changes in population growth rates are primarily a function of the relationship between fertility and mortality rates, she highlighted in both categories the demographic transition to generally lower rates. 

While some countries have transitioned to the point where they have reached zero or negative population growth (e.g., Japan and Western European countries), others are still early in the transition and are experiencing rapid population growth as a result of the mortality rate decreasing at a much faster rate than the fertility rate.  In these cases, it is important to avoid solutions to the short-term problems that can exacerbate the long-term problem, as in the case of China's one-child policy, where the solution may well be the source of an even larger problem 50 to 70 years later. 

As the population pyramid grows increasingly top heavy as a result of decreasing fertility and mortality rates, it will become more difficult for Asian families to sustain family-based care for the elderly.  These changes will certainly impact the basic values within Asian societies and require careful planning to avoid age-based conflict and unsupportable social security policies in the region. 

A representative from a nongovernmental organization presented a paper on the relationship between migration and security.   Political barriers to migration were lowered in many parts of the world with the end of the Cold War while globalization has played an important role in making migration much easier.  As a result, migration has become a more independent variable and politicians now find themselves reacting to the phenomenon, rather than controlling it through administrative measures. 

Recognizing that migration is often cast in negative terms largely due to the potential for conflict associated with large migrant populations, the presentation focused some attention on the positive economic aspects of a migratory labor force.  Specifically, he demonstrated how migrant workers have come to serve as a reserve labor pool for the receiving countries and as outlet for excess labor in sending countries.  

The security dilemma occurs when that reserve labor pool refuses to be repatriated when the demand for their services diminishes. Using examples of both a "melting pot" and a mosaic approach, he then suggested there was a general trend toward a mosaic model of absorption and integration.  As a result, the cultural underpinnings that helped define national security values in the past are no longer rooted as deeply in the state. In this respect, international migration might actually serve to reform the very notion of national security by accelerating the movement away from a state-articulated concept of what constitutes security. 

A senior American scholar presented a paper on the impact of rapid urbanization on security in Asia.  While noting the social benefits associated with industrialization and urbanization, he suggested that the Asian financial crisis highlighted the fragility in Asian cities that have grown so rapidly that governments have great difficulty providing basic services to large portions of the population. 

The human costs include overcrowded slums, traffic gridlock, water shortages, environmental degradation, and informal economic sectors that barely offer subsistence level existence to inhabitants.  These costs are likely to increase unless strategies for sustainable development are developed now.  Areas that require further study to ensure effective strategies are developed include improvement of air and water quality within urban areas, regional exchanges for optimal use of shared water resources, regional strategies for energy conservation, and ways to improve mass transit within urban areas.

Throughout the presentations and subsequent discussions, working group participants agreed that demographic change was a major security concern for all Asian countries.  Although the most immediate short- term problem is providing basic services and minimal quality of life for rapidly urbanizing populations in many of the large South and Southeast Asian cities, the long-term problem of an aging population will create future strains unless careful measures are taken to provide care for the elderly. Finally, migration was viewed as both a source of potential internal instability as well as an effective balancing mechanism in the global economy. 

Conclusion

The conference represented a rare opportunity for government officials, scholars, analysts, and private citizens to exchange views on Asian security matters. The inclusion of a cross section of Asia’s increasingly complex security community is a central theme in the work of the Asia-Pacific Center. Although the discussions during the three days demonstrated that the region confronts a strikingly diverse range of security threats, the opportunity for frank dialogue served to enhance mutual understanding and supported the Pacific Command’s broader goal of engagement with the Asia-Pacific region.