All Quiet on the Eastern Front?
The United States in recent months has been preoccupied with the Middle East and with the near-term crisis posed by North Korea's announcement that it has nuclear weapons. But there are other long- term developments taking place that will change the political landscape of Asia in ways that will ultimately weaken U.S. influence there. Policy makers in Washington seem scarcely to have noticed, much less arrived at a long-term strategy for dealing with these developments.</br></br>Since 1945, East Asia has never had the internal cohesion or organization of Europe, with the latter's strong multilateral institutions like the European Union and NATO. But this is beginning to change. The Association of Southeast Asian Nations (Asean) joined with the three major Northeast Asian powers, China, Japan and South Korea, to form a group called Asean Plus Three in 1998. In addition, the Chiang Mai Initiative links the central banks of 13 East Asian countries and provides swap facilities in case of speculative attacks of the sort that occurred during the financial crisis of 1997-98. At the Asean summit meeting in Vientiane, Laos, last December, the organization decided to hold an East Asian Summit some time next year in Kuala Lumpur that would bring together the leaders of the Asean Plus Three group, but not those of the U.S., Australia, New Zealand, or India.</br></br>There is a great deal of irony in this development. In 1990, former Malaysian Prime Minister Mahathir bin Mohammed proposed the creation of an East Asian Economic Caucus, a multilateral grouping of East Asian powers that would deliberately exclude countries like the U.S. and Australia -- a "caucus without the Caucasians." The U.S. and Australia were vehemently opposed to this. At American behest, the Japanese quietly sought to kill the idea, while the Australians worked hard to promote a more inclusive Asia-Pacific Economic Cooperation (APEC) forum as an alternative. What Asean Plus Three and the proposed East Asian Summit represent is a resurrection of the old Mahathir proposal, but this time with mighty China rather than tiny Malaysia driving the process forward. Japan, which earlier had acted as America's cat's paw in stopping the Mahathir plan, is now on board.</br></br>The roots of these developments lie in the Asian economic crisis, and in a series of highly effective Chinese diplomatic initiatives over the past several years. There has always been a huge gulf in perceptions about the causes and consequences of the Asian crisis between the U.S. and countries in East Asia. Americans tended to see the problem as one of crony capitalism, poor corporate governance, and flawed exchange rate management on the part of Thailand, Indonesia, Korea and other countries. The East Asians, by contrast, interpreted the behavior of the U.S. and U.S.-influenced international financial institutions like the IMF as narrowly self-interested, seeking to open up Asian financial markets to U.S. investment banks. To this day, South Koreans refer to the crisis of late 1997 as the "IMF crisis."</br></br>In the aftermath of the crisis, Washington continued to bat down proposals from the region for new institutions to mitigate future financial shocks, like the Japanese proposal for an Asian IMF. Since the Clinton administration had little to offer the region in terms of new ideas or institutions, countries there took matters into their own hands and established the Chiang Mai Initiative and Asean Plus Three. Things have gotten no better under the Bush administration, which has made the war on terrorism the lens through which it saw regional cooperation.