26 March 2014
Secretary Kerry Poses for APEC Leaders' Family Photo

Asia's dearth of leadership

Asia's miracle development was driven by "determined, devoted, and inventive leaders, in both business and government". But what is striking today is the dearth of Asian leadership.

Asia's miracle development was driven by "determined, devoted, and inventive leaders, in both business and government", according to Michael Schuman, in his excellent book "The Miracle: the epic story of Asia's quest for wealth".

These leaders believed that their own success depended on the successful development of their economies. At a time when communism was a threat, they had to prove to their populations that they offered a brighter future.

The early movers of Japan, Korea, Hong Kong, Taiwan and Singapore all needed to import natural resources to survive. This meant that an export-led growth strategy was imperative to finance those imports. And once the success of the export strategy was demonstrated, the ASEAN countries and China followed suit.

These early-mover countries also wisely sided with the US, and were able to benefit from its aid, military protection, and open markets.

The government leaders were a motley crew of bureaucrats and technocrats; politicians and generals; communists and capitalists; democrats and dictators; engineers and economists; and even a medical doctor. But all were motivated by the challenge of economic development and improving the lives of their citizens.

The cast included: Japan's Hayato Ikeda; Korea's Park Chung Hee; Singapore's Lee Kuan Yew; Malaysia's Mahathir Mohamad; Taiwan's Chiang Kai-Shek; China's Deng Xiaoping and Zhu Rongji; India's Manmohan Singh and Montek Singh Ahluwalia; and Indonesia's Suharto.

Business leaders also made a critical contribution through industrial upgrading, product innovation, and conquering international markets, especially personalities like Toyota's Eiji Toyoda, Sony's Akio Morita, Hyundai's Chung Ju Yung, Hutchison Whampoa's Li Ka-Shing, Lenovo's Liu Chuanzhi, Wipro's Azim Premji, and Acer's Stan Shih.

The tale of these and many other impressive Asian leaders makes one wonder why Asia should be afflicted by such a dearth of leaders today - at a time when new leadership may be more necessary than ever before.

For example, ever since its bubble economy burst over two decades ago, Japan has suffered from political paralysis. While the return of Prime Minister Abe offers some hope, we are yet to see whether he can really implement Abenomics. And Japanese business is also no longer the juggernaut it once seemed, with the once-famed electronics sector now stumbling.

Singapore's unique benevolent dictatorship is now struggling to maintain public support, as the aging Lee Kuan Yew fades from the scene, and the public is no longer reluctant to express its disagreement with the technocratic elite. Since Mahathir's retirement, Malaysia's ruling party has been slowly losing is grip on power, and though it still won the last (rigged) election, it did not win a majority of the national vote. In Hong Kong, the public is increasingly virulent in expressing its discontent with the stooges of Beijing, who have been leading its government since 1997.

China suffered from a great drift of leadership under HU Jintao and WEN Jiabao, which saddled the country with an economy which is "unbalanced, uncoordinated and unsustainable" (in the words of WEN) and is also massively indebted. XI Jinping seems to be attempting to assert greater leadership, but it remains to be seen whether he will undertake serious reforms, or just seek to settle scores with his political opponents.

And India's failure to build on the impressive reforms of twenty years ago, have left the economy suffering badly from appalling infrastructure, widespread corruption, a heavy regulatory and bureaucratic weight, and low human capital.

If ever there were a country that desperately needed leadership, it is India. True, it does have some impressive business leaders. But they are now more attracted by international than home markets.

The brightest sparks of Asian leadership seem to be in Korea, in the form of President Park and businesses like Samsung.

Asia's miracle economies face a completely different, and perhaps more challenging, economic, social and political landscape from the golden age of Asian leadership described by Michael Schuman.

Following the global financial crisis, and their own maturity, economies must be "rebalanced", meaning they must become less dependent on exports, and more driven by domestic demand.

Raging inequality is undermining social cohesion and the social contract. This not only threatens social stability in a region where Internet and social media usage is very high. It also undermines economic growth and rebalancing.

More prosperous and educated publics are calling for greater participation in politics. They are also demanding less corruption and cleaner, more effective governance.

Asian publics are also exposed to a wide range of vulnerabilities and insecurities -- like food safety, natural disasters, environmental problems -- which require more effective and less corrupt governance.

And Asian countries are faced with a more complex geopolitical environment.

The US still has the most open markets in the region, but its growth is and will likely remain much weaker for some time. The US may also still be the most important military/strategic partner for many countries in the region. But despite President Obama's "pivot" to Asia, many remain cautious about the seriousness of America's commitment, especially in light of the state of almost civil war in Washington.

By contrast, China is becoming the most important trade, investment and aid partner for most Asian countries. But China's foreign policy swings unpredictably between "bully-boy" behaviour, and charm offensives.

Juggling relations between these two gorillas, while maintaining some breathing space, requires a very difficult balancing act - especially since not all Asian countries have the same loyalties, which means that some countries cannot trust their neighbors.

In short, Asia is in desperate need of new leadership, but there is little evidence of such leadership on the horizon.


John West
Executive Director
Asian Century Institute
Tags: asia, leadership, asian miracle, governance, democracy, governance

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