IHT: East and West are drifting apart

	East and West are drifting apart
	Philip Bowring IHT	Tuesday, February 4, 2003

Nuts to Davos and Porto Alegre

LONDON East and West are drifting apart politically and economically. Globalization may still be a word that people love or hate, but the lesson from the latest Davos and Porto Alegre meetings, or from comparing the priorities of New York, Paris or São Paolo with those of Beijing, Hong Kong or Seoul, is of divergence.

History holds several examples of contacts between East Asia and the West being interrupted, sometimes for long periods, by war or chaos cutting the Silk Road. Are we seeing another as the lands of Islam between the Indus and the Black Sea face both turmoil within and confrontation with the West?

The threat of war in Iraq may be temporary, but it is helping to underline how Asian and Western perceptions of interest are growing apart.

It is occurring, too, at a time when there is a kernel of confidence in East Asia that its economy has a momentum of its own and can continue to prosper even if its current main trading partners, the United States and Europe, no longer provide the stimulus to which Asia has become accustomed.

From the standpoint of the East, America and Europe have both, in their different ways, become so obsessed with Iraq and Islam that they exacerbate deep-seated problems and so endanger a broader global stability.

Asians resent what they mostly see as a latter-day outburst of Western imperialist instincts, with potential for damage to the global economy.

They note, too, that the views of Asia are given scant attention in Europe or the United States, which both assume that the international configurations of 1945 should and will remain intact.

But due to their interest in maintaining good relations with America, the Asians mostly keep their opinions to themselves.

The bottom line is that they want to stay as far away from the issue of Iraq and the Middle East as a partially globalized world permits. They suspect that the era when pan-Pacific developments were on the global cutting edge is over, as America's concerns with Europe and the Middle East, with homeland defense and with its increasingly important Hispanic population and Western Hemisphere connections overshadow the links to East Asia. Given U.S. budgetary problems, there is a likelihood before long of a reduction of the American military presence in Asia, which has been such a major factor in regional stability. This is undesirable but probably inevitable. Asia will have to do more to help itself.

Meanwhile, there is growing Asian resentment at under-representation in international institutions. This does not apply just to the composition of the Security Council and the policies of the World Bank and the International Monetary Fund. It is also apparent in UN agencies and at forums such as Davos and Porto Alegre, where debates on economic policy are framed by the ideological divides of the West, including Latin America, largely to the exclusion of the experiences and practices of an East Asia which has long been at the forefront of development. South Korea, China, Malaysia and others are admired from a distance, but their views and experts are largely excluded from key institutions.

The reality of Asian growth is reinforcing the self-confidence of the region.

The mainstream Western economists who appear at Davos and elsewhere continue to claim that Asia and most of the rest of the world are hostage to U.S. economic performance. Porto Alegre emphasizes the evils of Western multinationals and the "Washington consensus" in stifling development and increasing inequity. Both views often seem myopic and paternalistic to an Asia which has recovered and learned lessons from its crisis.

Asian economies - excluding Japan but including India - have performed well in the past two years despite weakness in the West. They should continue to do relatively very well. All have large reserves and current account surpluses and are in a position to continue to spur domestic demand if Western demand, held back by debt and demography, contin- ues to falter.

Intra-regional trade is moving gradually from dependence on the West as the ultimate consumer to consumption within the region. While Western nongovernmental organizations and once rich Latin Americans blame others for their own failures, Asians mostly welcome old multinationals, and are too busy creating their own new ones to bother about Davos or Porto Alegre.

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