PCDForum Article #2,  Release Date April 14, 1993

by Walden Bello

The Asia Pacific region currently lives with a basic contradiction. One nation, the United States, is militarily supreme, while another, Japan, is economically dominant. While this situation poses a serious threat to the region's stability, it also offers an opportunity to create a new order built on demilitarization and respect for the sovereignty of Asia-Pacific nations. This opportunity is best understood in its historical context.

For the last few centuries, the peoples of the Asia Pacific region have been largely the passive objects of history, pawns in the chessboard of big-power politics, as well as producers of the wealth of others. Colonialism, the Second World War, and the Cold War significantly shaped the region's recent history. Over the last 40 years, the region has had to live with one central fact, the hegemony of the United States now threatened by the closure of U.S. bases in the Philippines and the rising economic dominance of Japan in the region.

While the official rhetoric in Washington and Tokyo affirms the "complementary relationship" of American military strength and Japanese techno-economic power, it is obvious that the old alliance is dissolving in antagonisms that will greatly affect the future of the region. While the U.S. military presence in the region in the first postwar decades served to promote the expansion of U.S. trade with Asia and the growth of U.S. investment there, in the last few years it has served mainly as a canopy for the rapid integration of the Asia-Pacific region around the interests of Japan. This relationship is not likely to survive the cold war, especially given increasing Japanese dominance of critical military technologies and the fact that in spite of its low military profile, Japan has the third largest military budget of any country in the world.

During this post-war period, the traditional mode of colonial exploitation, which focused on the extraction of natural resources, was gradually superseded by a process of export-oriented industrialization (EOI) promoted by the U.S. Agency for International Development and the U.S. dominated World Bank. This phenomenon coincided with the growing demand for cheap industrial labor by U.S. and Japanese firms. The East Asian states responded by enacting repressive labor policies to attract foreign capital.

While EOI has brought relatively high growth rates to a number of economies, it has also reaped major social and economic costs, among them increasing inequality, the displacement of small farmers, and the alienation of labor. It has also contributed to alarming degradation of the environment. The repression of labor that went with EOI also guaranteed that the process of democratization, when it came, would lead, not to an amicable compromise on economic and social issues, but to a polarized struggle over the benefits of past growth and a political system marked by long-term instability.

Of even greater significance is the process of integration of the Asia Pacific around the Japanese economic powerhouse that has become the main feature of the regional economy. This process of functional integration is essentially hierarchical in character rather than reciprocal, with Southeast Asia, Vietnam and China specializing in the provision of cheap labor; Southeast Asia, Australia, Russia and China serving as sources of raw materials, agricultural commodities and processed raw materials; and the newly industrializing countries (NICs) and Australia functioning as sites for less than state of the art high-tech industries, as well as middle class mass markets.

At the center of this universe Japan resides as the primary source of capital, credit and technological flows and the main destination of profits. This process is conflictive, uneven, and unstable. The main source of instability is Japan's strong tendency to export significantly more than it imports from most of its client economies, resulting in inexorably rising trade deficits for the latter. This trend is, in turn, a reflection of Japan's monopolization of advanced technology, which allows it to add significantly more value to its products relative to the low-tech manufactured and processed products, agricultural goods and raw materials it imports from the dependent Asian economies.

While the potential conflicts are numerous, the end of the Cold War era of Communist containment is a relatively fluid period that offers unprecedented opportunities to develop a new but lasting framework for regional peace, regional economic cooperation and sustainable development at a national level. The following are three proposals designed not only to draw popular support region wide, but also to win over certain sectors of the regional elites, while reducing the dominance of both Japan and the United States, the two most powerful superstates in the coming period, in regional affairs.

An Alternative Security Framework. An alternative regional project must first of all address the peace and security issue, for that is potentially the most dangerous dimension of the incipient conflict between Japan and the United States. Furthermore, the specter of Japanese remilitarization is a deeply emotional one throughout the region.

An alternative security framework for the Pacific would rest on a simple idea: that the best guarantee of real security is the rapid demilitarization and denuclearization of the region. Indeed, so legitimate and popular is the concept of a demilitarized region that some governments have rhetorically espoused it, even without significant popular pressure. For instance, the conservative governments of Malaysia and Indonesia have urged the Association of Southeast Asian Nations (ASEAN) to become a nuclear-free zone.

The time is ripe to channel existing sub-regional energies into the drive to create a regional denuclearized and demilitarized zone that would not only expand sub-regional initiatives like the South Pacific Nuclear Free Zone (SPNFZ) but also substantially improve on the latter to include tight restraints on the size of armies and on the production and movement of all types of weaponry. The principal mechanism to achieve this end would be a multilateral treaty for demilitarization and denuclearization that would involve as signatories the United States, Japan, Russia, China and all other Asia-Pacific countries.

The restrictions must be accompanied by diplomatic mechanisms for the resolution not only of superpower disputes but also regional conflicts like the Cambodian civil war and the dangerous multilateral disputes over the Spratly Islands. Such mechanisms would work hand-in-hand with, rather than supplant, United Nations initiatives.

An Asia-Pacific Techno-Trading Bloc. The second dimension of an alternative regional project is economic: the creation of an Asia-Pacific techno-trading bloc. While the alternative security framework must be inclusive of the United States and Japan in order to bind them to peaceful solutions, a regional system of preferential economic and technological relations must exclude these two economic superpowers if it is to promote a truly integral development process. That is, while United States and Japanese trade and investments would be welcome within the bloc, they would not be extended the same preferential trading, investment and technology-sharing arrangements enjoyed by members of the bloc and intended to move the region away from the currently high degree of dependence on both Japan and the United States for imports, exports, capital and technology.

In contrast to the Japanese and U.S. paradigm of corporation driven regional integration, an Asia-Pacific bloc would strive for a pattern of integrated development that ensures technological know-how is shared among regional partners, no countries are reduced to serving as cheap labor enclaves, and development proceeds along ecologically sustainable paths in contrast to the strip mine pattern characteristic of current Japanese and U.S. investment.

One of the key thrusts of the bloc would be to develop complementary interactions between Australia, the NICs (especially South Korea), and the less advanced Asia-Pacific economies, with the emphasis on the sophisticated dispersal of selected low-tech, mid-tech and high-tech production processes and the joint development and deployment of technologies that are environmentally sustainable.

Common labor and environmental codes are likely to be popular with the masses and could be made acceptable to enlightened local elites if framed as a national interest issue. Regional labor and environmental codes would make it more difficult for Japanese and U.S. corporations to subvert the bargaining power of national governments and pit one country against another by threatening to relocate their operations owing to 'high wages' or 'tough environmental laws'.

Free trade ideologues in Washington are likely to oppose the development of an Asia-Pacific regional block. Their opposition can be countered by alliance building with U.S. labor and the American environmental movement on the ground that the proposed arrangements would eliminate the Asia-Pacific as a haven of cheap labor and avoidance of environmental regulation.

A Regional Congress of NGOs. The third dimension of the regional project would bring together, on a region-wide basis, the non-governmental organizations (NGOs) and popular organizations that form the cutting edge of the alternative Pacific enterprise. A regional NGO congress would be necessary to bring regional NGO power to bear in support of objectives to which some local elites and foreign actors, are hostile, in particular, the protection of human rights; the spread of democratic government; resource, agrarian and aquarian reforms; protection of the environment; promotion of women's rights; and defense of indigenous and minority peoples. Another key aim of the congress would be to gain more control over the aid process, which, so far, has been mainly negative in its impact, to create space for the alternative project.

With the end of the cold war a set of circumstances has emerged that offers the peoples of the region, probably for the first time in two centuries, a real chance to create regional political and economic institutions that would guarantee a future of peace. sovereignty, and sustainable development.

Walden Bello is executive director of Food First, the Institute for Food and Development Policy, 145 Ninth Street, San Francisco, CA 94103, USA, and a contributing editor of the PCDForum. This article was prepared by the PCDForum based on his recent book People & Power in the Pacific available from Food First. US$12.00 plus $3.50 postage & handling. Outside the United States this book may be ordered from Pluto Press, 345 Archway Road, London N6 5AA, United Kingdom. £7.50 + .75 pence postage and handling.

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