Fresh Warnings That U.S. Risks Asian Backlash
International Herald Tribune
January 12, 1998
Michael Richardson 

Senior officials of the United States and the International Monetary Fund started crucial talks in East Asia on Sunday that they hope will help settle the region's financial crisis, but the harsh economic policies they advocate could trigger an anti-American backlash that will create dangerous instability in Asia, former U.S. officials and other analysts warned.

Many East Asian leaders, including those in the most seriously troubled economies — Indonesia, South Korea and Thailand — have expressed support for the higher interest rates and taxes, cuts in government spending and cleanup of the financial system that the IMF and the United States prescribe.

But there is increasing concern among Asian and Western critics of this reform and austerity program that its by-products — bank and company closures, large-scale layoffs, rising social and political unrest, and loss of national cohesion and self-confidence — could ignite virulent anti-Americanism.

Such a development would undermine support for a continued U.S. military presence in East Asia just when it is most urgently needed to buttress regional peace and security, analysts said.

"For now, Asians appear to blame their own governments, banks and businesses," said David Hitchcock, a former U.S. diplomat with extensive experience in East Asia. "But if the harsh measures only now sinking in lead to many more bankruptcies, business closings and layoffs, the blame could swing across the Pacific."

In a speech to the World Affairs Council in Seattle on Friday, former Secretary of State Henry Kissinger warned that an anti-American backlash could sweep Asia because of the stringent economic measures imposed by the Fund as a condition of its multibillion-dollar bailout loans to Indonesia, South Korea and Thailand.

"I think the IMF cure would have been very good if it was applied three years ago," Mr. Kissinger said. "But we have to be careful the economic realities don't lead to a wave of nationalism and eventually anti-Americanism in which the cure is worse than the disease."

Mr. Kissinger said that the danger was particularly acute in South Korea, where "very virulent" nationalism formed a strong undercurrent. "We have to be careful that we are not using this opportunity to recolonize Korea," he said. "I am not saying we are doing this, but it could be perceived that way."

Arriving in Malaysia on Sunday at the start of an East Asian tour, the U.S. defense secretary, William Cohen, gave an assurance that America would be a steady ally "in good times and bad," but he stressed that reforms were needed to end the region's economic crisis, Reuters reported from Kuala Lumpur.

The tour will also take Mr. Cohen to Indonesia, Singapore, Thailand, China, Japan and South Korea for security talks. The large U.S. military presence in the region is based mainly in Japan and South Korea.

Mr. Hitchcock, now a senior associate with the Center for Strategic and International Studies in Washington, said that Asians are worried that their economies are "slipping out of their control and into the hands of London, Washington and Wall Street."

"Some wonder out loud if behind the IMF, the United States is not really calling the shots," he said.

Reflecting that view, the prime minister of Malaysia, Mahathir bin Mohamad, said recently that his government would not turn to the IMF for financial support because "we would not able to control our economy and would throw it open to foreign domination," by allowing overseas interests free access to "come in and buy our banks and companies at cheap prices."

The People's Daily said recently that a major geopolitical shift was taking place between the United States and Asian countries. Allies in the Cold War, East Asian nations now pose an economic threat to the world's sole remaining superpower, the newspaper said.

"The United States is certainly not offering a new Marshall Plan to East Asia," it said. "By giving help, it is forcing East Asia into submission, promoting the U.S. economic and political model and easing East Asia's threat to the U.S. economy."

The People's Daily said that the United States was promoting the authority of the IMF — to which it is the largest single contributor — in the East Asian crisis to advance its own strategic interests.

The deputy prime minister of Thailand, Supachai Panitchpakdi, recently criticized the United States for not contributing directly to the IMF's $17 billion loan package for Thailand — a criticism that The Nation, the second largest English-language daily in Bangkok, said reflected to "strong resentment" felt by Thais in general.

Still, some East Asian leaders appear confident the region's economic hardships will not result in lasting damage to relations with the United States.

"At the end of the day, Americans know that our interests are linked up with theirs," said Lee Kuan Yew, Singapore's senior minister, in an interview with the Taiwan newspaper China Times that appeared last week.

"We need a strong America to provide stability. We give them access to our bases — which is not unimportant for the maintenance of stability, not just in the region, but also in Gulf where the oil is. So, behind the froth are deep strategic common interests."

But Paul Dibb, a former senior Australian defense official who now heads the Strategic and Defense Studies Center at the Australian National University in Canberra, said that economic turmoil in Asia would test American commitment to the region as East Asian countries sought to export their way out of difficulty.

"Almost certainly, the much cheaper cost of Asian imports into the United States will produce another wave of isolationist calls from the U.S. Congress for additional protection," he said.

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