The Multinational Monitor



Southeast Asia and Japan

Unequal Partners

by John Roberts

The birth of ASEAN - The Association of Southeast Asian Nations - in 1967 coincided with the escalation of the Vietnam War, and had several shared purposes: the rollback of revolutionary socialism in the newly liberated colonies of East Asia, the containment of China and the Soviet Union, and the consolidation of a hinterland for the economic expansion of America's most important Asian ally, Japan. ASEAN was created as the economic complement to the military alliance of the region.

Five years before the Korean War erupted, American policymakers had decided that Japan was to become "the workshop of Asia" (noncommunist Asia, of course) as well as the region's main trading partner. The strategic urgency of that grand design declined when the U.S. forces pulled out of Indochina. But ASEAN, which seemed to be another relic of State Department/Pentagon bungling during that period, has somehow lived on and prospered modestly under the U.S.-Japan partnership.

The strategic importance of ASEAN-made up of Indonesia, the Philippines, Singapore, Malaysia, and Thailand-as the southeastern link in America's defense perimeter in Asia goes far to explain this prosperity. U.S. forces and local armies loyal to the invariably authoritarian regimes of the respective countries are generally capable of controlling insurgencies, while Japanese and U.S. economic assistance, investment, and preferential trade, help to keep their economies viable enough to diffuse political dissidence. This so-called "resiliency" . is believed to make the region safe, to varying degrees, for loans and direct investment. Since there aren't many such havens for investment capital in the Third World, international money pours increasingly into the stronger ASEAN countries. This trend, coupled with the phenomenal growth of the Asian newly industrialized countries, has convinced bankers and economists that the hub of the global economy is moving westward to Asia.

The ASEAN member states are each as heterogeneous internally as they are different from one another ethnically, linguistically, socially, and economically. Accordingly, the concept of ASEAN (or even of Asia) as a political entity has only a superficial acceptance among the peoples concerned. But surprisingly, the system works-at least for business and local elites. Although all of the states except Singapore depend upon exports of primary materials for their foreign currency and most have been hard hit by the global recession as well as by bloated external debts, their economic growth averaged 7.6 percent in the 1976-81, an exceptionally high rate by Third World standards.

But no country has been able to benefit from ASEAN as much as Japan. That is natural since Japan and ASEAN were literally made for each other. The birth of ASEAN in 1967 was preceded by the establishment of Asian Development Bank one year earlier, and both were the brain children of the State Department, the Pentagon and the circles of bankers connected with the ChaseManhattan/World Bank network. The Asian Development Bank, though based in Manila, has always had a Japanese president, the first being a protege of former World Bank president Eugene Black, who was on loan from Chase. Japan provides most of the bank's funds and, as the largest investor in ASEAN, derives the greatest benefits from its loans, most of which go to ASEAN countries.

Japan's influence in ASEAN may be judged from the fact that its GNP-$1,139 billion in 1981-is six times that of ASEAN as a whole. Since Japan has not been severely affected by the world slump, it is still the best customer for ASEAN's products, of which it buys about 25 percent of total exports. Some 50 percent of ASEAN's aid funds come from Japan, along with one-third of the direct investment received by ASEAN. Japan accounts for some 40 percent of all funds flowing into ASEAN, the foreign ministry says.

But while the Japanese media make considerable fanfare over Japan's relations with ASEAN, both the Japanese public and big business seem indifferent to the organization. Moreover, both the government and private companies much prefer to deal with the countries bilaterally.

On the Japanese side, the five ASEAN countries account for about 13 percent of Japan's imports and 9 percent of its exports, far less than Japan's trade with the U.S. alone. More than 20 percent of U.S. foreign trade is conducted with Asia-a considerable share. But the fact is that Japan is the only Asian country among America's top trading partners, and Japan's share of ASEAN's foreign trade is far larger than the U.S. share.

These figures suggest that ASEAN has essentially become an economic colony of Japan. As the major industrial power in Asia, Japan supplies ASEAN with most of its machinery and know-how, and serves (reluctantly) as a role model for some countries, not only in economic, financial, administrative, and technical matters but also for its educational and social institutions. This tutorial relationship is most conspicuous in the case of Singapore and Malaysia, whose prime ministers are publicizing their emulation of things Japanese. Especially admired is Japan's police system, its work ethic, and the success of its industry in emasculating the once-militant Japanese labor unions.

Japan willingly accepts the assignment from Washington of cooperating in ASEAN's economic development as a way to ensure the region's "comprehensive security." The fact that Japan is arming to the teeth all the while is causing a little uneasiness, but since the ASEAN countries are doing the same thing, they 'don't make a big issue of rising Japanese militarism.

A more serious problem for Japan is that the ASEAN countries are slow to cooperate with each other. Unavoidably, several compete in the export of certain raw materials. Unfortunately, they insist upon competing in new industries as well, with the result that trade among them is sluggish, and attempted industrial projects involving two or more member companies seldom get off the ground. National rancors and jealousies often obstruct rational policies. And despite admiration of Japanese success, most Southeast Asians seem to dislike Japanese individually and in groups, and suspect them of feeling contemptuous of their fellow Asians.

While complaining about all these disadvantages, Japanese bankers and businessman admit that matters could be worse, and are indeed much worse in Latin America and Africa. Typically, a financial official of Mitsui & Co. said recently that "although business with these countries has become very difficult, Southeast Asia is the biggest market for Japan, and still very promising."

John G. Roberts is a freelance journalist and editor who has been based in Tokyo for more than twenty years. His articles have appeared in Time, Newsweek, The Far Eastern Economic Review, and The Nation. He is the author of several books on Japan and the Far East, including Mitsui: Three Centuries of Japanese Business.

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