REPORT FROM THE CONFERENCE ON

GLOBALIZATION AND REGIONAL SECURITY: ASIAN PERSPECTIVES

FEBRUARY 23-25, 1999 HONOLULU, HAWAII

Globalization in Asia:
Getting the Breeze Without the Bugs

Executive Summary: Nearly two years since Asia’s economic crisis began, the
region has begun to express doubts about the impact of globalization on regional
societies. Although the term defies simple definition, participants agreed that
globalization has several core characteristics:

 Unprecedented economic interdependence, driven by cross-border capital

movements, rapid technology transfer, and "real time" communication and
information flows.
 Rise of new actors that challenge state authority, particularly non-
governmental organizations and civic groups, global firms and production
networks, and even financial markets.
 Growing pressure on states to conform to new international standards of
governance, particularly in the areas of transparency and accountability.
 The emergence of an increasingly Western-dominated international culture,
a trend which in many countries has sparked concern about the erosion of
national identity and traditional values.
 The rise of severe transnational problemsthat require multilateral
cooperation to resolve.

Globalization and Regional Security – The impact of globalization on

Asia’s security is complex. In some ways the impact has been positive:
economic integration has reduced the potential for conflict, particularly in
Southeast Asia. Nevertheless, globalization may give rise to new security
concerns, and aggravate existing tensions.

 New transnational threats – Globalization has contributed to the rise of

energy and environmental issues, food and water access, migration, and
organized crime and terrorism as major security concerns. To be effective,
responses to these problems must be multilateral in nature.
 Weakening regional institutions – The financial crisis has weakened Asia’s
two major regional organizations, APEC and ASEAN. APEC was helpless
during the crisis, and ASEAN appears increasingly divided.
 Shifts in the balance of power – Because globalization can fuel rapid
economic growth, shifts in the balance of power can occur more quickly
than in the past. Rapid Chinese growth and Japanese economic stagnation
 may change the strategic equation in Asia in a relatively brief period of
time.
 Expanding roles for the military – The combination of new threats and
lingering concerns will place unprecedented demands on regional military
organizations. Militaries will have to take on new roles, even as resources
decline and recruitment falls.

Globalization and Sovereignty – Although globalization is often viewed

as a challenge to national sovereignty, states in Asia have chosen to
embrace the global economy. During Asia’s boom years, globalization was
viewed as a tool for strengthening national power, rather than as a
potential threat. This view was reinforced by the belief in Asia that
governments could participate in the global economy without altering
domestic political structures and practices. Across the region growing
wealth often coexisted with authoritarianism.

Events in Indonesia, however, suggest that globalization can force political,

as well as economic, change. Globalization can exacerbate divisions within
society, with some groups profiting more from globalization than others –
Indonesia’s ethnic Chinese, for example. In the face of globalization, ethnic
divisions and separatist movements could worsen, and social cohesion
could suffer as well.

Authoritarian regimes may have more to fear from globalization than

democratic states. Governments that embrace norms such as
transparency, accountability, and the rule of law – concepts that form the
backbone of democratic societies – appear to have suffered less from the
financial crisis than their authoritarian counterparts.

For now, few Asian governments appear likely to reject globalization

entirely. Nevertheless, the possibility of an Asian backlash – primarily
against the United States – remains real. A new "grand bargain" between
the West and Asia is essential. The West must recognize that Asian
concern over eroding values and social cohesion is legitimate; Asia must
cease demonizing the West for its role in spurring globalization, because
no nation is immune to the challenges and opportunities it presents.

Introduction

As the effects of an unprecedented economic crisis continue to ripple across

Asia, a fundamental issue has moved to the forefront of policy discussions in
the region: the long-term impact of globalization on Asian societies. Even
during the years of Asia’s economic boom, scholars and government officials
across the region engaged in a lively dialogue about the influence of global
forces on the region. The debate over alleged differences between Asian and
Western "values" that emerged in the early 1990’s was at least partly an
expression of Asian concerns about globalizing forces.

The Asian financial crisis has provided new fuel for this debate. Prominent,
mainstream Asian thinkers from India, to Malaysia, to Japan are now
pointing to globalization as a possible threat to internal cohesion and
economic health. Commentators in the West have generally assumed that
the crisis would precipitate disillusionment with so-called Asian approaches
to governance and economic management, spurring further "convergence"
with Western practices. Although there is evidence that some Asian
countries have moved in this direction, others are drawing alternative
conclusions: namely, that adherence to Western methods leaves Asian
societies more vulnerable to the ravages of global capitalism, and more
exposed to forces that corrode long-standing cultural and social norms. The
outcome of this debate will have profound implications for the region’s
security environment, and for the United States – which is seen in much of
Asia as the ultimate driving force behind globalization.

To explore Asian perspectives on globalization, and to examine how the

phenomenon is reshaping the region’s security environment, the Asia-Pacific
Center invited a group of distinguished government officials and scholars for
three days of intensive discussions. Although thinking about the influence of
globalization is still very much in its infancy, the meeting served to sharpen
thinking about how relations in the region may – or may not – be
transformed in the years ahead.

Globalization: What Is It? – To examine the impact of

globalization on Asia, the term must first be defined. The task is not
simple. Several conference participants noted that groups within
societies define the term differently, often to suit narrow, parochial
interests. In South Korea, for example, labor unions make use of
the term in demanding the "universal" right to assemble; business
interests, in contrast, employ it to spur deregulation. One American
observer noted that "globalization" is often used to describe so
many different things that the term is essentially meaningless;
globalization has become, he noted wryly, the "el Nino of the social
sciences" – a force that can be blamed for almost anything.

Other participants questioned whether globalization was truly a new

phenomenon. An American historian noted that the entire course of
human history can be seen as the gradual expansion of
transportation and communication networks; in that context,
globalization may be little more than an extension of past patterns
of human interaction. At the very least, as a South Korean
participant noted, "globalization" must be distinguished from terms
like "interdependence" and "integration" – vocabulary which have
been part of the social science lexicon for decades – if the concept is
to have meaning.

Despite the doubts expressed about the utility of the term,

however, conference participants generally agreed that globalization
is a new phenomenon with a number of core characteristics:

 Unprecedented economic interdependence,driven by cross-

border capital movements, rapid technology transfer, and "real
time" communication and information flows;

 Rise of new actors that challenge state authority, particularly

non-governmental organizations (NGO’s) and civic groups,
truly global firms and production networks, and even financial
markets;

 Growing pressure on states to conform to new international

standards of governance,particularly in the areas of
transparency, accountability, and the rule of law;

 The emergence of an increasingly Western-dominated international culture, a

trend which has sparked concern about the erosion of national identity and
traditional values in many Asian countries; and

 The rise of increasingly severe transnational problems – such as energy and

environmental concerns, large-scale migration flows, and organized crime
networks – that require multilateral cooperation to resolve.

The forces of globalization will not totally transform Asia’s regional security
order, but they will produce a new set of challenges and opportunities for
policymakers in the next century.

Globalization and Regional Security

The impact of globalization on Asia’s security environment is complex. In

addition to affecting political and economic conditions within states,
globalization may be transforming relations among states. This impact is not
necessarily negative. A number of participants argued that in some ways the
forces of globalization have brought about greater stability in the region.
Deeper economic integration, and the emergence of regional "growth
triangles" – such as the Johor-Riau-Singapore triangle in Southeast Asia –
have reduced the potential for conflict; the unprecedented interdependence
spurred by globalization gives states an incentive to cooperate. Indeed, in
the words of an Indonesian participant, the "absence of war" in Southeast
Asia in recent years must be attributed at least in part to the forces of
globalization.

Nevertheless, the impact of globalization on the regional security

environment is not entirely positive. Though globalization may mitigate the
potential for conflict in some parts of the region, other traditional security
concerns appear immune to its effects; indeed, globalization may actually
serve to aggravate long-standing tensions. The forces of globalization are
also giving rise to new challenges that will test the ability of regional
governments to cooperate. Participants linked the following set of concerns
with globalization:

New Threats – A number of participants linked the rise of new

"transnational" concerns to the impact of globalization. Many of these
challenges represent long-term threats that have traditionally fallen outside
the realm of foreign policy. The cross-boundary nature of these threats also
poses a dilemma for Asian governments. Developing the institutional
capacity – at both the domestic and international level – to address these
concerns will be a major challenge for the region in the next century. These
new threats include:

 Energy and environmental concerns. Rapid economic growth in Asia has led
to growing reliance on energy imports, increasing the importance of sea
lanes and transportation routes. The region’s increased use of energy has
also exacerbated environmental degradation, which several participants
linked to social unrest.

 Food and water security. The growing problem of environmental degradation,

coupled with growing populations in the region have increased pressure on
food and water supplies. Although improvements in agricultural technology
appear likely to mitigate food security issues, water availability was cited by
several participants as a likely source of conflict in the future.

 Migration. The combination of rapidly growing populations in much of the

developing world, increasingly porous national borders, and disparities in
economic growth rates, have sparked a dramatic increase in international
migration. Migration has already emerged as a source of tension in Southeast
 Asia; Malaysia deployed troops and naval vessels to limit the arrival of
Indonesian migrants during the financial crisis.

 Organized crime and threats from other "non-state" actors. Through the
increasing ease of communication and transportation flows, and the growing
permeability of national borders, organized crime networks, terrorists, drugs
and weapons traffickers, and even human smugglers face fewer constraints
on their activity. Some participants suggested that these threats may prove
to be some of the most pernicious of the 21st century.

Weakening Regional Institutions? – Asia’s financial crisis, and the forces

of globalization more broadly, may have a corrosive effect on the region’s
multilateral institutions. The Asia Pacific Economic Cooperation (APEC)
forum’s inability to forge a response to the financial crisis has led many to
question the institution’s future relevance. Participants also noted that the
future of the Association of Southeast Asian Nations (ASEAN) appears
increasingly uncertain, given the current turmoil in Indonesia, although the
organization will continue to be Southeast Asia’s core institution for the
foreseeable future.

Rifts also appear to be emerging between ASEAN’s democratic and more

authoritarian members. Thailand and the Philippines, for example, have
advocated a policy of "flexible engagement", which would allow ASEAN
members to comment on each other’s internal policy matters; these
countries have similarly supported proposals for a new ASEAN surveillance
system, in which members would cooperate in monitoring economic
indicators for signs of impending crisis. These initiatives would represent a
departure from ASEAN’s traditional stance of non-interference in domestic
affairs – and could spark opposition from within the organization.
Globalization may ultimately bring about new concepts of sovereignty and
regional security interaction.

Shifts in the Balance of Power – The capacity of globalization to fuel

rapid economic growth – and to ravage economies almost overnight –
implies that regional and global balances of power can change more quickly
than in the past. The combination of rapid Chinese economic growth and
extended stagnation in Japan, for example, could significantly alter the
balance of political, economic, and military power in Asia in a relatively short
period of time.

Participants noted that globalization could also give rise to new sources of
rivalry. Deepening economic integration, for example, could contribute to the
emergence of regional economic blocks that compete for power and
influence. Some participants suggested that the European Union’s rise as a
possible challenge to American economic dominance can be seen as a
political consequence of globalization.

Expanding Roles for the Military – The combination of lingering

traditional threats, the prospect of increased internal tensions in Asian
countries, and the emergence of new security challenges will place
unprecedented demands on regional militaries. Military organizations will
have to take on new roles, a trend that may spark resistance within the
ranks of uniformed personnel. At the same time, other demands in Asian
societies will compete for financial resources, and growing economic
opportunities elsewhere will likely reduce recruitment levels. Increasing
demands on the military, in other words, will likely coincide with a period of
declining resources – stretching the armed forces in many countries very
thin.

How Important is Globalization? – Conference participants agreed that

globalization undoubtedly is introducing new complexity into the Asia-Pacific
security environment. Whether the forces of globalization will fundamentally
transform the regional order is another question, however.

The picture is mixed. There is some evidence that globalization’s integrating

force has contributed to an environment of greater peace and stability in
Southeast Asia. In other parts of the region, however, the case is much less
clear. In Northeast Asia, for example, traditional, state-centered patterns of
interaction still appear to prevail, despite increasing trade and investment
ties. Relations between the sub-region’s major powers – China, Japan,
Russia, and by extension, the United States – are still best understood
through the framework of realism: the balance of power, relative gains,
deterrence and the centrality of military force. South Asia, too, remains
relatively untouched by the global economy, and therefore traditional
patterns of interaction remain dominant. Globalization, in other words,
appears to have had a relatively minor impact on political relationships in
Northeast and South Asia – at least until now. Whether the forces of
globalization will serve to remold the international system and create
fundamentally new forms of interaction, remains to be seen.

Globalization and the State in Asia

Globalization is often viewed as a threat to the authority and sovereignty of

the state. The Asian financial crisis demonstrates that governments are
increasingly hard-pressed to insulate their populations from the pressures of
the world economy. Nevertheless, the state remains the central actor in
Asia, and its centrality is unlikely to change in a fundamental way – even
with the rise of globalization.
Embracing Globalization - Several participants argued that Asian states
have played a key role in promoting globalization in the region. One
participant from Singapore argued that until the financial crisis, regional
governments perceived globalization as a tool for enhancingnational power.
Singapore’s decision to embrace the world economy helped it to become the
financial center of Southeast Asia, and bolstered its strategic position in the
region as well. China and Vietnam have undertaken substantial economic
reforms to break out of isolation and strengthen the positions of those in
power.

For these and other countries, participation in the global economy has
certainly entailed costs. Greater openness to trade, foreign investors and
visitors, and information from the outside world all have contributed to the
erosion of sovereignty in Asia. But with few exceptions – Burma and North
Korea, for example – Asian states chose to accept these costs in order to
reap the benefits of globalization.

Behind the Asian embrace of globalization was the assumption that

economics could be separated from politics. In other words, Asian
governments sought to liberalize their economies even as they worked to
protect existing political systems, institutions, and practices – an effort that
proved remarkably successful during the boom years. Globalization helped to
give legitimacy to ruling regimes across Asia. In particular, rising living
standards resulted in populations willing to tolerate governments that were
often authoritarian – a phenomenon sometimes described as "performance-
based" legitimacy. In countries like Indonesia, Malaysia, and even South
Korea, growing prosperity and authoritarianism walked hand-in-hand.

New Doubts - In essence, as a Singaporean participant noted, Asia saw

itself as a "winner" in the new global contest, although even during the years
of the Asian miracle regional governments worried that global forces would
corrode national identity. In the wake of the financial crisis, however, in the
words of a participant from Singapore, doubts about the benefits of
globalization have been "redoubled." The region is now deeply aware of the
costs of being a globalization "loser."

More importantly, the crisis may indicate that Asia’s traditional economics-
without-politics approach toward globalization may no longer be possible –
as events in Indonesia so starkly suggest. Governments that previously
embraced globalization as a tool for strengthening domestic legitimacy have
come to see the phenomenon as a possible threat to their power. Malaysian
Prime Minister Mohamad Mahathir’s denunciations of foreign speculators,
and of Western capitalism more generally, represent one somewhat extreme
example.
Growing Internal Divisions – Asia’s reconsideration of globalization is in
part driven by the realization that the uneven impact of globalization on
Asian societies may exacerbate internal divisions – no small concern in the
region’s many multiethnic states. With some groups within society benefiting
more from globalization than others – ethnic Chinese in Indonesia and
Malaysia, for example – the risk of worsening ethnic divisions and separatist
movements is high. Further, to the extent that globalization weakens
governments and erodes notions of national identity, a concern several
participants cited, social cohesion in Asia could suffer.

Globalization and Democracy - Several participants argued that

authoritarian regimes may have more to fear from globalization than more
democratic states. No government is immune to the effects of globalization,
and democracies are no exception; the financial crisis swept aside
democratic leaderships in South Korea and Thailand, for example. But
several participants noted that the forces of globalization appear to reward,
or at least punish less severely, governments that embrace transparency,
accountability, and the rule of law – norms that form the backbone of
democratic and free-market societies. Indeed, one Malaysian participant
argued that the forces of globalization may actually strengthen the
institutions that support democracy, by demanding reforms that result in
more open political and economic systems.

In authoritarian regimes, the norms and institutions that appear necessary

to manage the pressures of globalization are often in short supply. In the
face of globalization, the authoritarian state thus suffers from two central
weaknesses: the absence of democratic norms and institutions, and reliance
on economic performance to sustain political legitimacy. Such states may be
most likely to face – and least likely to endure – "punishment" from the
global economy.

Managing Costs and Benefits – Despite the financial crisis, no Asian

countries appear likely to reverse course and reject globalization. Few Asians
perceive the North Korean and Burmese models to be viable alternatives to
the global economy, and even Malaysia has moved recently to loosen the
capital controls it imposed during the depths of the financial crisis. Some
governments have even welcomed the opportunity for reform; as a South
Korean participant pointed out, President Kim Dae-jung has used the crisis
to implement economic restructuring that his predecessor in South Korea
also considered desirable – but politically impossible.

Nevertheless, the danger of backlash in Asia against globalization –

especially its social and cultural effects – is real. A participant from
Singapore noted that throughout the region there is growing anxiety over
the impact of global forces on "national ways of life." Many Asians have
chosen to view events as a new form of imperialism originating in the United
States – a sentiment that has been exacerbated by elements of arrogance in
the West’s response to the financial crisis. In the years ahead, Asian
governments will be tested by two related challenges: the task of
compensating the victims of the world economy, and the need to balance
increasingly global political and cultural norms with traditional values and
identities.

Emerging Civil Society - In this context, the emergence of an international

civil society in Asia – non-governmental groups and organizations that
pressure states on issues of concern, such as human rights, the
environment, and social welfare – may be a critical antidote to the negative
forces of globalization. As a participant from Singapore noted, the rise of an
international civil society in some senses represents a challenge to the state;
NGO’s – which by definition have no national loyalties – that pressure
governments to provide a cleaner environment or to protect human rights
often can pose a threat to those in power.

Nevertheless, these forms of "globalization from below" may help to ensure

that regional governments remain adequately sensitive to the costs
associated with greater integration into the world economy – or
"globalization from above." It is in the long-term interest of Asian
governments to accommodate the emergence of an international civil society
in the region; these new actors can ultimately assist the state in managing
the harmful elements of globalization.

A New "Grand Bargain" – The challenge for Asia of managing the complex
forces of globalization could lead to tensions with the United States, as the
rhetorical backlash against American influence in the region suggests. One
participant from Singapore argued that to prevent globalization from
emerging as a source of tension in U.S.-Asia relations, a new trans-Pacific
"grand bargain" is essential. For its part, the West must abandon
triumphalist rhetoric, and recognize that Asian concern over eroding values
and social cohesion is legitimate. Indonesia’s experience suggests that
concern about the possibility of internal fragmentation is justified –
particularly in the multi-ethnic states that characterize much of the region –
and should be recognized as such in the West.

Asia, in turn, must cease demonizing the West for its role in spurring
globalization. Participants were quick to note that Western countries have
also been buffeted by globalization, and managing its challenges will be a
central item on the policy agendas of Washington, London, Paris, and Bonn
long into the 21st century. Indeed, the resilience of U.S. presidential
candidate Pat Buchanan’s distinctive brand of populist isolationism – not to
mention the millennial fears spurred by the Y2K bug – demonstrate that
anxiety over globalization plagues even Americans.

About the Conference

Asia’s economic crisis has had a profound impact on the region’s security
environment. Through two conferences and a roundtable discussion hosted
during 1998, the Asia-Pacific Center has explored in depth the near-term
implications of the crisis: the suspension of arms modernization programs
and military exercises, diminished solidarity within ASEAN, and the
enhanced regional role of the United States—to name only a few. As the
crisis wore on, it became clear that the debate in Asia had shifted to the
larger issue of globalization in the region. With financial support from the
U.S. Pacific Command, APC organized a three-day meeting to examine the
longer-term impact of the financial crisis, and globalization more broadly,
on the Asia-Pacific region.

This report was written by Christopher B. Johnstone, a Research Fellow at

the Asia-Pacific Center. For more information on this and other programs,
contact the Research Division at (808) 971-8900, or visit the APC web site
at www.apcss.org.

Participants
Dr. Amitav Acharya
Associate Professor
Institute of Defence and Strategic Studies
Singapore

Dr. Muthiah Alagappa

Director of Studies
East-West Center
Honolulu, HI

Capt Mark H. Anthony

Military Education Division
Joint Staff
Washington, DC

Dr. Jerry H. Bentley

Professor of History
University of Hawaii
Honolulu, HI
Dr. Donald L. Berlin
Professor of International Relations
Asia Pacific Center
Honolulu, HI

Dr. Lee Endress

Director
College of Security Studies
Asia Pacific Center
Honolulu, HI

Dr. Dru Gladney

Dean of Academics
Asia Pacific Center
Honolulu, HI

Vadm (Ret.) Mutsuyoshi Gomi

Visiting Fellow
Asia Pacific Center
Honolulu, HI

Dr. Harry Harding

Dean
Elliot School of International Affairs
George Washington University
Washington, DC

Dr. Huang Renwei

Director
American Studies Center
Shanghai Academy of Social Sciences
Shanghai, China

Mr. Christopher B. Johnstone

Research Fellow
Asia Pacific Center
Honolulu, HI

Mr. James A. Kelly

President
Pacific Forum/CSIS
Honolulu, HI

Dr. Byung-kook Kim

Professor of Political Science
Korea University
South Korea

Dr. Satu P. Limaye

Director of Research
Asia Pacific Center
Honolulu, HI

Dr. Michael J. Montesano

Assistant Professor
Asia Pacific Center
Honolulu, HI

Dr. Charles Morrison

President
East-West Center
Honolulu, HI

Dr. K.S. Nathan

Professor of International Relations
University of Malaya
Malaysia

Dr. Stephen E. Noerper

Associate Professor
Asia Pacific Center
Honolulu, HI

Dr. Leif R. Rosenberger

Economic Advisor to the Commander-in-Chief
USCINCPAC
Honolulu, HI

Amb Charles B. Salmon, Jr.

State Department Advisor
Asia Pacific Center
Honolulu, HI

Dr. Johan Saravanamuttu

Professor of Political Science
Universiti Sains Malaysia
Malaysia

Dr. Kusuma Snitwongse

Chair of the Advisory Board
Institute of Security and International Studies
Chulalongkorn University
Thailand

Mr. H. C. Stackpole
President
Asia-Pacific Center
Honolulu, HI

Dr. Rizal Sukma

Deputy Director of Studies
Center for Strategic and International Studies
Indonesia

Mr. Simon S.C. Tay

Faculty of Law
National University of Singapore
Singapore

Dr. Carlyle A. Thayer

Professor
Asia Pacific Center
Honolulu, HI

Dr. Nira Wickramasinghe

Senior Lecturer
University of Colombo
Sri Lanka

ABOUT THE ASIA-PACIFIC CENTER

The Asia-Pacific Center (APC) is a regional study, conference and research

center funded by the U.S. Department of Defense. The Center’s mission is
to foster understanding, cooperation, and study of security-related issues
among civilian and military representatives of the United States and other
Asia-Pacific nations. The Center provides a focal point where national
officials, decision makers, and policy experts can gather to exchange ideas,
explore pressing issues and achieve a greater understanding of the
challenges that that shape the security environment of the Asia-Pacific
region. APC occasionally publishes articles on Asia policy issues written by
APC research, staff, and fellows. The views expressed here are those of the
author and do not necessarily represent those of the Asia-Pacific Center,
the Department of Defense, or the United States government.