Geopolitics in Asia

by Kitazawa Yoko


Asia in the Cold War Era

During the first half of the Cold War era Asia was, along with Middle East, one of the "hot" regions of the world. In fact, two major wars, the Korean War (1950-53) and the Vietnam War (1965- 75), broke out in this region in the postwar period. Although both were only limited warfare in terms of batflefields, both were global disputes in the sense that the United States carried out large-scale military interventions under the pretext of protecting the Free World from communist aggression. In the Vietnam War, in particular, the United States sent a ground force of 500,000 soldiers and carried out strategic bombing with B-52 bombers over the 10-year period.

During the period of these conflicts, the United States made efforts to foster anti-communist governments in Asia to surround "Red" China. This strategy included south Korea and south Vietnam. The concentration of U.S. military and economic assistance during this period to the countries near China, including south Korea, Taiwan, south Vietnam, the Philippines and Thailand, can be seen as proof of this strategy. The overthrow of Indonesia’s nationalist President Sukarno regime in a 1965 coup d’etat occurred as part of this trend. The United States, however, failed militarily in Vietnam, and had to withdraw from Indochina in 1975.

In 1972, on the eve of the Paris Peace Conference to end the war in Vietnam, the United States attempted a rapprochement with China, giving up the containment policy it had taken up until then. It was a major change in terms of the U.S.-Soviet relationship. At the same time, it brought about a major change in Asian geopolitics. Behind this so-called "China Card" policy were the U.S. defeat in Vietnam, the end of China’s Cultural Revolution and the Pentagon’s analysis that the Soviet Union had taken the lead from the U.S. in terms of the "nuclear balance".

As the U.S. implemented this China Card policy, the geopolitical importance of Asia in the U.S.-Soviet Cold War structure lost importance in comparison to the Indian Ocean, especially the Persian Gulf, the Horn of Africa, and Southern Africa. The Indian Ocean region produces 70% of world’s oil and 50% of other strategic mineral resources.

And yet for the United States, the "communist threat" in Asia had not vanished. However, it began to understand that this threat would not come from outside but would be generated by domestic factors. In other words, the threat would be from "poverty". As a result, U.S. policy towards Asia began to focus on the "eradication of poverty".

This policy led post-Vietnam Asia to become a region of "development" and "growth". At the time of the Tet offensive, Asian countries, including Indonesia, started instituting laws to introduce foreign capital and policies to encourage industrial development. In response to this move, the flow of investment by multinational corporations began to shift from South America to Asia. Japan began investing into Asia on a full scale.

Meanwhile, in 1972, just before the Paris Peace Conference, martial law was imposed in south Korea, the Philippines and Thailand. Taiwan was already under martial law, and had been since 1948; Indonesia was ruled by a military regime; and Malaysia was governed by a tough internal security law. Asia’s "development" was thus promoted by these military, authoritarian governments, reinforced by U.S. military assistance and investments from U.S. and Japanese multinational corporations. Japan’s economic aid, which began around this period, was appropriated to building the infrastructure needed for industrialization.

In this way, "development" in Asia was imposed from the top and from outside, and aimed at "eradicating poverty", or maintaining domestic order. In other word, it was an attempt to achieve, using economic development by multinational corporations, what the United States had failed to do with its military force. "Development dictatorship" -- this was the characteristic of Asia after Vietnam during the latter half of the Cold War era.

The relationship between Asia’s development dictatorships and Japan is also very important.. Japan was able to achieve high economic growth and advanced level of industry by shifting its industrial sectors to Asia which, unlike Europe, had already been outdated and had lost international competitive power. This meant that Japan exploited Asia’s cheap labor, and Asia became a subcontractor for the Japanese industries. Japanese economic assistance, which began in full scale in the 1970s, supported the investment of Japanese companies into Asia. This ODA was focused on Asian countries such as Indonesia and south Korea. It should be noted that the top ten recipients of Japan’s ODA are all, except Bangladesh, countries which were included in the Greater Asia Co-prosperity Sphere in the prewar period. Furthermore, Japanese ODA is characterized by the lowest grant element (30%) among the 18 DAC countries, and that most of aid to Asia is in the form of yen-loans. Naturally, these loans have been added to the debts of the recipient countries.

The "development dictatorships" in Asia had two inherent contradictions. The first was that as industrial development progressed, workers matured both quality- and quantity-wise. In the 1980s, the labor movement intensified in south Korea and Taiwan. The second contradiction was that a middle class emerged in urban areas. This class, in union with the labor movement, demanded democratization and opposed the dictatorships. This move brought wage hikes and lowered the international competitiveness of the export-oriented industries.

On the other hand, "the development dictatorships" had an external weak point: they were the beneficiaries of the Cold War between the East and the West. The Cold War, however, ended starting with the fall of the Berlin Wall in 1989 and ending with the collapse of Soviet socialism in 1991.

Another threat to the "development dictatorships" in Asia was China’s shift to a market economy. China, which under a communist control, possessed a vast market and cheap labor, became a rival to the NIEs.

In addition to these political factors, there was the problem of debts. Originally, developing countries were exporters of primary goods. The "development" imposed from outside on the Third World naturally accumulated debts.

With the oil shock in the fall of 1973, high economic growth came to a halt in the advanced industrial nations of the North. An enormous amount of dollars flooded from oil-producing countries intro the banks of the West, who fattened themselves on the radical increase in domestic demand for funds in the 1960s. The Japanese, U.S. and European banks who were losing loan customers, set up consortia and began providing loans to developing countries. In 1978-79, where interest rates were very high, these Western consortia radically increased lending to the Third World. Interest rates hovered had reached about 15%, and this combined with falling prices (averaging 15% per annum) for raw materials, led to rates as high as 30%. In this way, the debt crisis broke out among developing countries in 1982. Asian countries were also struck by the same crisis.

The New World Order in the Post-Cold War Era

In the post-Cold War era, the United States began to advocate the need to establish a "New World Order". This concept can be militarily summarized by the Gulf War and the UN’s PKO dispatch, both of which can be seen as failures.

In contrast to the Vietnam War, the United States attacked Iraq with the use of a form of multinational forces. In this case, it was not "the communist threat", but "Iraqi’s illegal occupation of Kuwait" that the U.S. used as an excuse. In reality, the victims of the UN economic sanctions and the U.S. missile attacks were Iraqi women and children. Saddam Hussein’s dictatorial government remained unharmed. Kuwait’s feudal lords came back to power. The double standard in the U.S.’s "democracy" and "illegal occupation" was clearly revealed.

This was important in that it made clear the trend of international politics following the Cold War. International politics changed from a bipolar system between the U.S. and the Soviet Union into a unipolar one, with the U.S. alone, but the role of the international military policeman that the United States had once played alone was shifted to the UN Security Council. The UNSC, however, turned into a voting machine for the United States.

After the end of the Cold War, the UNSC increased its PKO dispatches to conflicts in developing countries. At present, PKOs are active in 13 countries or regions. While the United Nations is said to be in financial crisis, the expenses for PKO and for the UNTAC operation in Cambodia alone account for 10% of the expenditures of all UN organizations.

The PKO, however, is not stipulated in the UN Charter, but is in essence an illegal function. Specialists in international law call the PKO "Article 6.5", a sort of average between Article 6 which stipulates "peaceful settlement of disputes" and Article 7 which prescribes "military enforced measures". The United Nations sent forces stipulated under Article 7 to the Korean War in 1950-53 and to the Congo disturbance in 1960-64. In both cases, the UN failed.

Learning from these failures, the United Nations created a PKO at the time of the Cyprus crisis. These operations are dispatched to an area in conflict under the supervision of the Un Secretary General, and based on a UNSC resolution. During the Cold War, however, PKO dispatches were limited to Cyprus and to Lebanon and Iran/Iraq because of vetos by either the United States of the Soviet Union in the security council. Furthermore, one precondition for PKO dispatch is that all parties involved have signed a peace agreement, and the UN troops are prohibited from "resorting to force except in self-defense".

However, since Boutros Boutros-Ghali assumed the post of secretary general in 1992, the nature of the PKO had undergone change. Ghali proposed in his "Agenda for Peace" that the PKO be changed into Peace Enforcing Forces (PEF). Under his proposal, the United Nations would be able to send PEF unilaterally to any area even if no peace agreement was reached, or as a preventive measure before the break-out of an armed conflict. The Ghali proposal has already been implemented, as witnessed in the UNTAC activities in Cambodia, where the Paris Peace Accord was broken, and by the multinational forces sent to Somalia under the name of "humanitarian aid".

The United States and UN Secretary-General Boutros-Ghali are implementing major changes in the UN’s structure and functions.

The function of the UN’s collective security will be concentrated in the hands of the Security Council and handled by the PKO. Meanwhile, there is an effort on to dissolve or weaken organizations which were set up to promote the development of developing nations under the UN Economic and Social Council. this effort is also making use of the excuse of the UN’s financial crisis, inefficiency and corruption. The Center for Transnational Corporations, which was set up in 1973 in accordance with a demand from the Group of 77, has already been shut down. Some organizations such as UNESCO and the UN University have suspended their activities because of shortages in funds. Some UN staff have been recruited to the PKO, baited by a bonus.

What the United States and Secretary-General Boutros-Ghali intend to do is to shift the functions of these UN agencies involved in the development of the South to international financial and trade organization such as the I7MF, World Bank and the GAIT. They are trying to achieve this scheme by 1994, the 50th anniversary of the Bretton Woods Agreement. The IMF and World Bank are imposing Structural Adjustment Programs (SAP) on developing countries, taking advantage of their huge debts which amounted to $1,500 billion in 1992. SAPs are being carried out in as many as 100 countries. In a nutshell, SAPs aim at having developing countries repay their debts to the Western banks at the expense of a number of poor people there.

Simply speaking, it is impossible to achieve the New World Order through PKOs and SAPs. As we have already seen in the cases of Cambodia and Somalia, PKOs do not solve disputes. The IMF and World Bank’s SAPs not only do not solve poverty and hunger, but rather increase them. "SAP riots" have erupted in various places, and have even destabilized governments. Moreover, the prosperity of the North, for which the PKOs and SAPs aim, is rapidly becoming an illusion, as Japan, the United States and European countries plunge into bottomless recessions.

Asia in the Post-Cold War Era

a. Geopolitics in Asia

As I mentioned, Asia was a victim as well as a beneficiary of the Cold War. Now, I would like to look at the situation Asia finds itself in today after the collapse of the Cold War system.

The geopolitical importance that Asia held during the Cold War era has naturally decreased. Politically and militarily, the world has fallen under the control of the unipolar power of the United States and Europe following the EC integration in 1992. To counter this move, "Asian economic bloc" was proposed by Malaysian premier Mohammed Mahathir, but the proposal was aborted because of the U.S. opposition and Japanese disapproval. In reality, however, economic blocs of various sizes are being conceived and created.

• AFTA (January 1993)/ASEAN

• Trade Agreement for closer economic ties (1993)/Australia, New Zealand

• Pan-Japan Sea Economic Bloc Scheme/Japan, far-eastern part of Russia, three north-eastern provinces of China, ROK, north Korea

• Pan-Yellow River Economic Bloc Scheme/ROK, Japan and two provinces of China

• South China Economic Bloc Scheme/Hong Kong, two provinces of China, Taiwan

• Mini-economic Bloc of Overseas Chinese/Malacca Straits region

• Bhat Economic Bloc/Thailand, Indonesia, Burma

• South Asia Association for Regional Cooperation (December 1988)/India, Pakistan, Bangladesh, Sri Lanka, Nepal, Bhutan, Maldives

Japan is aiming to establish an initiative in Asia by positively involving itself in these movements. It is yet uncertain whether these movements will grow through mutual competition or whether there will be moves to form an integrated Asian economic bloc including South Asia.

With the end of the Cold War, both the United States and the Soviet Union have withdrawn their military bases from, respectively, the Philippines and Vietnam. An ironic outcome has been that arms exports from the North to the power vacuum regions in Asia have soared. The Middle East, which ranked first as arms importer during the Cold War era, relinquished its position to Asia.

The world’s largest arms exporters are the five permanent members of the UN Security Council. Asia which held only a 6% share of the world arms market in 1977, grew to 34% in 1991. The Middle East, on the other hand, reduced its market share from 32% in 1982 to 21% today.

In terms of import contracts in 1991 in nominal terms, south Korea held $3.1 billion, China $1 billion and Thailand $600 million. The United States and France sold F- 16 and Mirage fighter planes, respectively, to Taiwan, which has high foreign currency holdings. Russia is also planning to export arms to Asia, including China, amounting to $5 billion. Singapore, Malaysia and Taiwan are promoting productive cooperation with the United States by privatizing their national arms industries.

These moves have promoted militarization in Asian countries, and will become a factor in creating new internal and regional conflicts. These, in turn, will induce new interventions from U.S. multinational forces and UN PKOs.

b. Reorganizing the NIEs

As they entered the post-Cold War era, the economic growth rates of the NIEs, which had recorded high figures in the 1980s, slowed. The growth rate for south Korea averaged 10.8% between 1986 and 1990, but fell to 9% in 1990 and 3.1% in 1992. Taiwan’s growth also dropped from 8.9% in 1986-90 to 5.3% in 1990. A similar trend has been seen in Hong Kong and Singapore.

In contrast, Thailand, Malaysia and Indonesia recorded high growth rates, which led to them being called the "second NIEs". Thailand’s GNP growth rate in 1990 was 12.2%, Malaysia - 10.6% and Indonesia - 7.4%, all much higher than in earlier years.

This fact shows that south Korean and Taiwanese industrial labor-intensive sectors such as textile, which lost competitive power because of rising production costs, shifted their production bases to countries with cheaper labor costs. Japanese companies also transferred capital away from the NIEs such as south Korea and into Thailand and Indonesia, resulting in Japanese investments in south Korea and Singapore decreasing by 5% in 1990 from the previous year.

What about the contents of the Japanese investments into the NIEs? Since 1985, when the yen began to strengthen, Japan began to shift high-tech assembly and processing divisions such as automobiles and VCRs to North America and Europe, and made the N7IEs into parts production bases for these industries. In this way, Japanese multinational corporations have tried to integrate North America and Europe with the NIEs. In other words, the movement of NIEs investments into Thailand, Malaysia and Indonesia is all part of the Japanese multinational corporations’ new overseas development strategies.

c. Japan’s presence

Since the rise of the yen, Japan has become the world’s largest economic power. In terms of GNP per capita, Japan took the no. 2 spot in the world in 1990, topped only by Switzerland. Japan has become the biggest investor, creditor, ODA donor and has the world’s biggest trade surplus.

In comparison with the United States and Europe, Japan’s investment and trading partners are more often Third World countries, particularly in Asia. Since the mid-1980s, imports of foodstuffs and lumber increased radically, and Japan became the world’s largest importer of these items. For example, imports of fish and shellfish in 1991 amounted to 3.3 tons or $11.8 billion, with 80% of this amount coming from Asian countries. Among these, prawns were produced in nursery ponds created by destroying mangroves. Imports of tropical fruits such as bananas and pineapples also increased. As a result, Japan’s self- sufficiency rate for fruits fell from 77% of 1985 to 65% in 1990. Japan also imports one-third of the world’s lumber market, with total imports amounting to $7.1 billion, 50% from tropical forests in Southeast Asia, with 70% of this amount coming from Sarawak in Malaysia.

Japan’s food self-sufficiency rate for 1990 was 67%, the lowest among the advanced industrial countries. It was 74% in 1985, and this declining trend will continue to be strong, since the decline of Japanese agriculture and fisheries will be accelerated, especially by the liberalization of rice imports being pushed through the GATT’s Uruguay Round. Today, one-third of Japan’s agricultural population consists of people over 60 years old; the number of young people going into agriculture is only 1,600 per year, lower then the number of new graduates from medical schools or even of the new employees of a single big corporation. The decline of land-usage type agriculture is especially remarkable: arable land, which totaled 7.8 million hectares in 1960, has now declined to below 5 million hectares.

Japan’s increasing imports of foodstuffs from Asia deprives Asian people not only of their food but also of their land and water. Furthermore, the destruction of mangroves and tropical forests has brought about damage to their environment. This is a great threat to the food and environmental security in Asia.

d. The IMF-World Bank Structural Adjustment Program and Asia

There are a number of countries with enormous debts in Asia. In terms of accumulated debts up until 1992, south Korea has $40 billion, the Philippines - $30 billion, Indonesia - $40 billion, Malaysia - $14.5 billion (1989) and India - $54.8 billion (1989). In the case of the Philippines and Indonesia, 40% of their national budgets are allocated to the repayment of debts under IMF SAPs, and 20% to military expenditures.

Because debt payments and military expenditures have eaten up more than 50% of these nations’ fiscal expenditures, spending related to people’s livelihood such as welfare, education and health care/hygiene have been greatly cut.

The victims of development imposed from above and outside, i.e., a huge number of marginalized people in absolute poverty, have been completely neglected by the states. These people include mountain people, indigenous people, landless peasants, small farmers, tenant farmers, farm workers, small fisherfolk and the urban poor, the majority of whom are women and children.

SAPs include the dismissal of public employees and wage freezes. The people who suffer from these measures are lower-grade personnel, school teachers and public nurses. The subsidies which the governments have provided to stabilize rice and oil prices have also been cut. This has brought about price rises for daily goods, directly hitting the lives of the poor.

SAPs require that the countries earn foreign currency by decreasing imports and increasing exports in order to repay their debts. First of all, currency in devalued. In terms of reducing imports, tariffs and other regulations which were set up to protect domestic industries are abolished and as luxurious foreign products flood into the markets, goods people need such as medicine become no longer available. SAPs make it a priority to increase exports, but as exports of primary goods increase, their prices fall. This is the biggest irony of SAPs.

e. Ethnic conflicts and religious fundamentalism

During the Cold War era, an alternative to the market economy in Asia was "socialism". But today, when Soviet socialism has collapsed and China’s and other socialisms are shifting toward market economies, socialism as an ideology for change has lost its effectiveness. Because of the military withdrawal from Asia of the U.S. and the Soviet Union, the power of control of the state has become relatively weak. What has erupted from this has been ethnic conflicts and religious fundamentalism. In comparison with the former Soviet Union and Yugoslavia, they are still weak, but as seen in India, they are showing a tendency toward increasing radicalism.

f. The role of NGOs

Asia is a region where development NGOs are most active. Particularly in South Asia including India, Sri Lanka and Bangladesh, there are many large-scale NGOs. It was in the 1980s, when the debt crisis erupted that these NGOs became active. This was because inspite of the fact that the absolute poor who became the victims of development accounted for two- thirds or three-fourths of the population, the government had discarded them.

In the beginning, NGOs worked for these marginalized people in the fields of education, health care and disaster relief, functioning as if they were supplementing the governments. In the post-Cold War era, however, the "socialist alternative", according to which fundamental social change could be realized only through a socialist program following the overthrow of state power by armed struggle, lost its effectiveness. In its place, sustainable development programs by NGOs made their appearance. The NGOs’ field of activities have expanded to alternatives to organic agricultural development, stock farming, forestation, fisheries, commerce and financing. The NGO network has been formed not only on the national level but on the Asian regional level as well.

[This paper was presented at the 24th CCA-URM Committee Meeting, February 1993, Hong Kong.]