[ppi] [ppiindia] 'Opening up' to raise risks of instability

** ppi-india **
'Opening up' to raise risks of instability

By ERIC TEO CHU CHEOW
Special to The Japan Times

SINGAPORE -- At a Feb. 23 international conference in Tokyo titled "Future
Prospects of the East Asian Economy and Its Geopolitical Risks," which was
organized jointly by the Policy Research Institute, Japan's Finance Ministry
and the Reischauer Center for East Asian Studies at Johns Hopkins
University, I presented a paper on the geopolitical risks in Southeast Asia.
The discussion was held in the context of fast-evolving developments in East
Asia and the implications of the recent recovery and rise of East Asian
economies. Although Northeast Asia is a potential source of conflict and
uncertainty (notably due to the North Korean debacle), Southeast Asia also
contains risks, though less apparent, during this period of political,
economic and social transition.

Southeast Asia's political economy has recently been molded by three waves
of change and transformation -- namely, the liberalization/globalization of
the 1980s and early 1990s, the 1997-98 financial crisis, and the Oct. 12,
2002, Bali bombing followed by the outbreak of severe acute respiratory
syndrome in 2003.

These waves of change have left Southeast Asia with important economic,
social and political traits, including a rise in domestic consumption, the
elevation of civil society and democratic aspirations and, more recently, a
"resurgence" of the state in its fight against terrorism and SARS and in its
support of accountability, transparency and communicative governance.

Fundamental geopolitical and geo-economic shifts, such as the emergence of
China, the relative "decline" of Japan (in the past 13 years) and the
redefinition of future regional roles for the United States and Russia, will
undoubtedly also have important consequences for Southeast Asia and its
economy.

The geopolitical risks, or the potential risks of instability, in Southeast
Asia can best be analyzed according to "internal" and "external" stability.
Internal stability includes four aspects:

* the effects of the 1997-98 financial crisis in parallel with the expansion
of the Association of Southeast Asian Nations to 10 members, and the risks
inherent to transition economies and societies;

* weak and budding ASEAN institutions and systems within the context of
democracy, reforms and social duties;

* profound cultural and social issues, such as history, religion and
ethnicity in Southeast Asia; and

* transborder problems within ASEAN, such as terrorism, "triad" gang
activity, piracy, smuggling, insurgencies, arms and human trafficking,
clandestine labor movements, health epidemics (including avian flu and AIDS)
and environmental scourges (haze and water pollution).

External stability involves:

* the emergence of China and its implications for Southeast Asia, especially
for its ethnic Chinese population, and the potential for anti-Chinese
sentiment;

* post-9/11 repercussions related to Islamic radicalism and the rise of
political Islam in the region;

* a drop in ASEAN's "soft appeal" and Southeast Asian regionalism; and

* "globalization risks" of geo-economics (bloc-building or marginalization)
and geopolitics (democracy or further "opening up") for ASEAN.

It is clear that the geopolitical risks in Southeast Asia are more internal
than external, but these two risk categories are intrinsically and
symbiotically linked. As Southeast Asian economies and societies "open up,"
it is inevitable that external factors and pressure (such as the three waves
of change above) will increase "internal" geopolitical risks.

The emergence of a "two-tier ASEAN" -- the original six members vs. the
transitional economies of Cambodia, Laos, Myanmar and Vietnam -- heralds a
potential "permanent" divide that, if mishandled, could lead to profound
socio-political instability for the region.

Democrasi, reformasi and the many electoral contests in Southeast Asia this
year portend geopolitical risks of instability within ASEAN, especially when
systems and institution-building remain weak or in a state of nascent
consolidation. Indonesia, Philippines, Cambodia and Myanmar are prime
examples of this geopolitical risk.

Moreover, the intricate history of animosity in the region is coupled with
complex religious and ethnic tussles, making this region potentially
unstable.

Lastly, due to the fragility of Southeast Asian institutions and political
systems, as well as the porous nature of the borders, cross-border problems
are manifold. There is the risk that arms smuggling, piracy, triad
activities and insurgencies could mesh with regional and international
terrorism across Southeast Asia, especially as a result of the Bali bombing.
Clandestine labor movements, the trafficking of women and children as well
as health and environmental problems are other potential conflict points.

Both the internal and external dimensions of ASEAN's geopolitical risks have
undoubtedly made Southeast Asia more vulnerable today. Until and unless the
internal as well as the external stability of ASEAN countries is effectively
secured, the geopolitical risks in Southeast Asia will remain high.

Eric Teo Chu Cheow is a Singapore-based business consultant and council
secretary of the Singapore Institute of International Affairs.

The Japan Times: Feb. 29, 2004
(C) All rights reserved




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