ASIAWEEK: 980417: Commandments for

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           Commandments for a New Asia

      Dos and don'ts on the road to reform and recovery

   Ricardo Saludo, the author of this article, is an assistant managing editor of Asiaweek


AT A SEMINAR LAST month on the Asian crisis, Noordin Sopiee, the chairman of
Malaysia's Institute for Strategic and International Studies, info-tained a Hong Kong audience with
his "Ten Commandments for Asian recovery." Emulating the biblical decalogue is always a neat,
engaging way to organize one's thoughts on most subjects, so let me use it on the topic of reforming
Asian economic and political structures and ways of doing business. But my Catholic background
prevents me from taking the kind of liberties with the Judeo-Christian laws which had Noordin's
listeners chuckling in delight while nodding in agreement. For instance, one of his commandments
was: "Thou shalt increase and ensure the marketization of the economy, taking politics and
politicians out of the corporate decision-making loop." One wonders what Moses would have made
of that.

Sticking to the original laws from the Book of Exodus, however, isn't such a handicap in discussing
the issue of structural change in Asia. Indeed, the commandments handed down on Mount Sinai are
quite apropos to the quest for new ways that would eschew the cronyism, corruption and lack of
transparency now widely being blamed for the crisis. Take the First Commandment: "Thou shalt not
worship false gods." One might say the law admonishes Asians to keep their focus on the real and
proper objective of any drive for change: better governance, increased competitiveness and higher
living standards for the region. If certain Asian ways help achieve such ends, then preserve them by
all means, while adopting similarly effective foreign ideas and structures.

At the same time, Asia should guard against false gods, so to speak. Too often, proponents of
change are interested not so much in bringing a better life to the region, but in propagating some
ideology as an end in itself, whether socialism, capitalism or democracy. While these concepts may
in certain ways be good for Asia, let's not forget our singular aim: to obtain a better life for Asians.
Based on that objective, the region should pick and choose from the different structures, values and
ideas on offer, including some of those being derided today, evaluating each of them as means to the
desired end.

The second commandment is: "Thou shalt not take the name of God in vain." In pondering policies,
values and structure, people should be careful in using words that may prejudice certain ideas and
values, as has been happening in much commentary on the Asian crisis. What was once praised as
"economic planning" is now branded "government meddling" in business. "Networking" has also
gotten a bad name: "cronyism." Even Asians who used to take pride in "Asian values" now find
shame in, well, "Asian values."

The danger, as Northwestern University professor Meredith Woo-Cumings noted at the recent Asia
Development Forum, is that "as a result of some happenstance or new phenomenon -- like the
Asian Crisis -- the entire developmental experience of the last 30 years in East Asia is thrown into
question . . . as the dominant global viewpoint turns and evolves, a mirage replaces a 'miracle,' and
'crony capitalism' comes to signify a region where remarkable growth was once said to go hand in
hand with equity." In sum, Asia should guard against pejorative labels that take the place of a
careful, impartial assessment of what's good and what's wrong in systems and practices that have
brought the region where it is today.

Let us skip the Third Commandment for now and talk about the Fourth: "Honor thy father and thy
mother." In pondering reform, Asians should not forget that the structures and values they are
thinking of changing spring from the life, world and being of past generations, the millennia of Asian
history and culture. And just as one may find one's folks a bit behind the times, one should still
respect them. Whatever their failings may be, their ways and efforts did give the present generation
a better life. Moreover, to acknowledge the centuries-old parentage of Asia's ways and institutions
is to be aware how deeply rooted they are. Recasting them is about as difficult as changing the color
of one's eyes or skin (although, I suppose, even that is becoming easier these days).

"Thou shalt not kill" is the Fifth Commandment, and in the context of structural change, the law
cautions against extreme remedies which end up killing the dynamism of business or political entities
in an effort to eradicate some hated ill. Most people are agreed that corruption is a bad thing. But if
they were to erect a labyrinth of dos and don'ts to completely wipe it out, they probably would end
up with economic growth of about minus-1%. Plainly, in the search for better ways and systems,
some hard-nosed analysis of costs, benefits, conflicting aims and diminishing returns should temper
the righteous eagerness to erase ugly aspects of Asian business and politics.

The Sixth and Seventh Commandments warn against the attractions of people and things outside the
home: "Thou shalt not commit adultery" and "Thou shalt not steal." Foreign ideas and institutions can
also seduce. There is nothing wrong in adapting them to one's purposes; that is what a lot of
progress is all about. But Asia is courting trouble when it embraces an idea without really knowing
what it is, like a philanderer who delights in the body but dismisses the soul.

Rather, in importing concepts and constructs, the region must strive to know their intricate workings.
Asia should also somehow make them truly part of itself by adapting them to its conditions and
character. Then the region won't be stealing, since it will make of the foreign object something truly
its own. And if it doesn't? Well, remember how that seductive Western idea called financial
liberalization was welcomed to this side of the Pacific over the last decade, evidently without full
knowledge of how it was supposed to be carefully implemented and with little attempt to ensure it
could function properly, given the region's untried and often corruptible regulatory structures. That
was one Big Bang that blew up in Asia's face.

With a sunrise industry called Crisis Commentary booming around us, the danger of misinformation
is great. So the Eighth Commandment urges us: "Thou shalt not bear false witness." Sadly, Asians
have many lies, damn lies, and statistics to wade through in their quest for a better way. One widely
cited piece of writing in particular, despite its ample worth as an analysis of Asian development, has
been twisted beyond recognition in many stories and statements on the crisis: economist Paul
Krugman's "The Myth of Asia's Miracle." The November 1994 essay in the journal Foreign Affairs
asserted that East Asia's galloping growth will slow over the next couple of decades, as land, labor,
capital and other factors of production dwindle.

The article, however, did not predict the crisis, as Krugman himself has acknowledged. It did not
mention the mammoth short-term foreign debt and bursting asset bubbles that collapsed major East
Asian currencies. These were the main culprits for the debacle; even a democracy with little
corruption and cronyism would have imploded if irrationally exuberant banks had for years pumped
it with cheap cash and then abruptly pulled out en masse. Joseph Stiglitz, the World Bank's chief
economist, noted that "some of the worst [financial] crises in the last decade occurred in Finland,
Norway and Sweden -- among the most transparent countries in the world." Yet naysayers are
arguing that Asian tiger economies got it all wrong in the boom decades and, as Krugman's "Myth"
supposedly predicted, their mistaken ways and structures eventually led to crisis.

Stiglitz cautioned that such finger-pointing "leads many to the post hoc ergo propter hoc fallacy of
believing that any problem existing prior to the crisis is automatically a cause." To be sure, Asia can
use much radical reform, to make government more competent, honest and representative, and
business more competitive, transparent and innovative. There is no doubt, too, that cronyism and
misguided autocracy have worsened the crisis and slowed the return of confidence, particularly in
Indonesia. The danger is that critics exploiting Krugman's "Myth" and the Asian crisis may persuade
the region to discard everything in its past formula for success.

Compounding Asia's downbeat mood is America's six-year boom, which has the region looking
longingly across the Pacific, hoping to discover some proven secret of economic vitality. The Ninth
and Tenth Commandments warn us against such covetous regard for wealth and seeming wisdom
elsewhere: "Thou shalt not covet thy neighbor's wife" and "Thou shalt not covet thy neighbor's
goods." Much of East Asia is now clamoring for Western aid and bowing to Western ways, like the
man who envies someone else's good fortune. But coveting your neighbor's recovery won't make
yours happen if you don't believe in yourself and your innate ability to rise again. And in the good
Asian traits which must underpin the rebound and should be grafted to foreign ideas and institutions
if the latter are to work properly.

In a recent conference in Manila on the need and prospects for structural change in ASEAN,
organized by the Asian Institute of Management and Germany's Konrad Adenauer Foundation,
social scientist and former dissident Joel Rocamora, head of the Philippines' Institute for Popular
Democracy, cited "the primacy of community" as one value that may hold the key to regional
change. Rather than adopting the unbridled individualism of Western-style democracy, Asians will
probably do better to harness their centuries-old capacity to act in concert and make sacrifices for
the good of all. Asian communities must press for openness, accountability and equity in
government, society and the economy, so that the conduct of politics, business and social affairs will
truly benefit everyone. At the same time, where sweeping, fundamental change is necessary, such as
in the treatment of women, Asians should be willing to recast their very souls, no matter how long
and deeply entrenched such outdated ways are. "Values can change," says Rocamora. Indeed, the
ex-detainee adds, it is about time that more Asians no longer put up with the oppressive treatment
their ancestors submitted to.

When its economy bounces back, Asia should take care not to lose its zeal for reform. Whether
growth is double-digit or negative, the region should always take time to reassess its ideas,
processes and institutions, and undertake improvements without waiting for the wake-up call from a
Paul Krugman or a George Soros. Heeding the Third Commandment, Christians regularly
"reverence the Lord's day" and ascertain where they need to mend their ways. Asians too must
constantly be asking how they can do better. Let us never forget that when we thought Asia was on
an unstoppable roll and proceeded to borrow and splurge as if nothing could go wrong, we took the
first step toward crisis.