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Economy

Tim Johnston: East Asia growth fetish won't hold the region together

A lack of ideas and institutions threatens post-colonial gains

Guards of honor raise the ASEAN flag at a ceremony to mark the 50th anniversary of the regional group in Hanoi on Aug. 8.   © Reuters

Developing East Asia has enjoyed more than 40 years of growth, except for a brief crisis at the end of the last century. But the single-minded pursuit of economic growth at all costs has created a dangerously unstable monoculture.

East Asians have seen civil liberties such as the right to strike and protest curtailed because they might deter investors; their habitat has been degraded as power plants and chemical factories have prioritized profits over the environment; some have seen their democracies hijacked in the name of development by strongmen such as Cambodia's Prime Minister Hun Sen.

This exclusive focus on pursuing growth has bleached the region's rich tapestry of ideas, culture and environment to create a landscape that at times can seem to be little more than a glorified industrial park with national flags.

This is particularly evident in politics. The region gave the world some of the great philosopher-politicians of the post-colonial era: Indonesia's Sukarno and the Non-Aligned Movement, Vietnam's Ho Chi Minh and his reconceptualization of nationalism, the pursuit of peaceful coexistence amid profound ideological disagreements by China's Zhou Enlai, and the unshakable belief of Singapore's Lee Kuan Yew that the city-state could be transformed into a gleaming first-world technopolis.

Some were wrong, and many were ruthless, but the men and women who rebuilt East Asia after the defeat of colonialism exemplified holistic and coherent views of a developing society, even if their visions too rarely included voices that disagreed with them.

The vision of too many of their successors has shriveled to a single point: economic growth. In democracies, electoral campaigns hinge on little more than promises to enable growth more effectively than political rivals, while autocracies have dropped even the pretense of egalitarianism and redefined social progress as the process of getting rich. The legitimacy of almost every government in developing East Asia now rests precariously on its ability to deliver growth.

This narrow reliance on growth -- "performance legitimacy" in the jargon of social science -- is a concern because in the current environment governments are unlikely to be able to deliver on their promises.

NO HELP The West has bounced off its post-crisis economic lows of 2008-2009, but shows no sign of returning to the glory days of the 1980s and 1990s: Western demand, which played a pivotal role in helping the region recover from the 1997 Asian financial crisis, is going to be of little help now.

Growth within East Asia is slowing -- particularly in China, the fountainhead of regional prosperity, as its government tries to switch from unsustainable debt-driven investment to consumer spending. China says its economy grew by 6.7% last year, the slowest rate in more than 25 years, but analysts regard that as optimistic. Developing East Asia as a whole grew by 6.34% in 2016, its sixth straight year of declining growth, and two percentage points below its 10-year average.

If such growth as is left were to disappear, there would be less incentive for collaboration. The supply chains that spread the fruits of prosperity in the good days could become shock-transmission mechanisms -- hawsers capable of dragging countries into conflict when the cycle reverses.

The lingering causes of friction between countries in East Asia -- border issues such as those in the South China Sea and between Cambodia and Laos, and long-standing ethnic, religious and social tensions within countries -- have never disappeared. They have at best been papered over by the shared imperative of growth.

Many of the national and international institutions that could have provided a brake on any descent into conflict have been hollowed out in the name of growth. Across the region, the mechanics of democracy, the independence of the judiciary, freedom of speech and the impartiality of the police, all of which should have roles in mediating between peoples and governments, have been degraded or never existed.

The Association of Southeast Asian Nations, which might have provided a robust regional forum for discussing international disputes, has had its embarrassing inadequacies cruelly exposed by its paralysis over the challenges posed by the South China Sea.

These developments would be worrying enough if they were happening in isolation, but they are not. Two major challenges add to regional instability.

U.S. Secretary of State Rex Tillerson, left, walks past Chinese Minister of Foreign Affairs Wang Yi at the start of the 7th East Asia Summit Foreign Ministers' Meeting in Manila on Aug. 7.   © Reuters

MIASMA OF UNCERTAINTY America's ambivalence about its role in Asia has created a miasma of uncertainty that is forming its own dynamics. Countries unsure of U.S. protection are rearming; alliances and alignments that have stood for decades are coming into question; China, which has a long history of underestimating regional reactions to its expansionism, is feeling more confident throwing its weight about.

The second shift comes from the impact of events in the Middle East. The Islamic State group seems on the verge of collapse, but when that happens the problem of terrorism will metastasize worldwide. International focus has been on the problem of returning fighters, but this is just the tip of the iceberg. There will be thousands of young militants who cannot return to their home countries and will end up hiding in the jungles of Southeast Asia, unmoored from society's restraining norms and influences, committed, well-trained and with little to lose.

Religiously tinged conflicts or proto-conflicts in Indonesia, Malaysia, Myanmar, the southern Philippines, southern Thailand and Xinjiang in northwestern China will provide natural focal points for their anger. Terrorism on its own may not pose an existential threat to any nation in East Asia, but a particularly egregious act of slaughter could trigger a vicious cycle of overreaction that already weakened institutions will struggle to stop.

As they are configured, East Asia's governments are ill-prepared for a sustained period of slowing growth. Unless they can develop a broader vision of a shared future that is less reliant on growth as the key measure of success, their legitimacy will continue to be eroded, leaving them vulnerable to populist challenges from within and external shocks from terrorist attacks or predatory neighbors.

As conditions deteriorate, the temptation will be for governments to turn to repression; yet, force is likely to be self-defeating in societies already weary of excesses by rapacious elites who see power as a birthright.

East Asia as a whole might look broadly stable, but the region's continuing reliance on performance legitimacy in an era of prolonged economic weakness has damaged the social contract, and economic codependency has regionalized external risks. Governments need to work on broadening their appeal beyond short-term populism and security toward economic growth, rebuilding institutions and strengthening social cohesion -- lest they find they are wearing no clothes when the tide of economic growth recedes.

Tim Johnston, a former Financial Times correspondent in Southeast Asia, is an analyst and author of "The Strategic Risks of East Asia's Slowing Economies," a paper published by the Australian Strategic Policy Institute in Canberra.

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