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APEC terrorized out of
focus
By Gary LaMoshi
HONG
KONG - Despite airspace restrictions and battleships
offshore, terrorists struck triumphantly at last
weekend's APEC summit. Al-Qaeda, Chechen rebels, and the
bombers in Indonesia and the Philippines hijacked the
focus of the summit from its original goal - Asia
Pacific Economic Cooperation - to a sideshow of
political issues, none of which belong in this unique
but increasingly irrelevant forum.
These terror
groups frightened APEC and compliant media into creating
a mythical paradigm that terrorism has economic roots
and branches far beyond what any rational person, or
murderous fanatic, would claim. In several cases, the 21
APEC leaders were scared into putting their full measure
of hypocrisy on public display.
The APEC grouping, a
combined US$19 trillion economy featuring the world's
two wealthiest nations plus the fastest-growing one and
hundreds of millions of poor people, failed meaningfully
to address relevant regional economic issues that could
foster long-term growth by bolstering trade, economic
integration and joint approaches to solve knotty
problems. APEC's so-called leaders failed to serve their
2.5 billion constituents.
US refrain
off-key
The issues that made headlines, such as
the strength of airliner cockpit doors and the security
of shipping containers, would be better addressed in
global forums such as the United Nations or World Trade
Organization. The US team merits reproach for bringing
its Iraqi obsession to Cabo San Lucas. Other APEC
members deserve credit for resisting the pressure to
sing the US tune, but shame on President George W Bush
for sowing distraction and discord with its off-key,
one-note refrain.
"Terrorism is a direct
challenge to APEC's goals of free, open and prosperous
economies and an affront to the fundamental values that
APEC members share," the leaders declared in their joint
statement. That's certainly true, but so are excessive
trade restrictions, crony capitalism (Asian or US
style), currency instability, and a hundred other more
relevant items, along with taboo subjects such as human
rights. APEC 2002's misguided single-mindedness not only
hands the terrorists a major victory by giving them the
stage at a key summit, but it goes a long way to proving
Karl Marx right: it's economic determinism, stupid.
Focusing an economic summit on terrorism mirrors
the tunnel vision that created the dot-com bubble. "The
Internet changes everything," was the watchword then;
now it's "September 11 changes everything." Each motto
contains a grain of truth, but as the technology bust
has proved, the basic rules of economics still apply to
economic issues.
Extending prosperity in the
Asia-Pacific region requires harder work than shoring up
cockpit doors. The biggest economic initiative to come
out of this summit, the US-inspired call for an end to
farm subsidies, is a worthy goal, again best addressed
globally. Moreover, it reeks of hypocrisy in the wake of
the $51 billion farm subsidy bill Bush signed into law
last May. Japan, where the perpetually ruling Liberal
Democratic Party holds power thanks to over-represented
rural constituents and where consumers pay outrageous
prices for domestic produce despite years of deflation,
signed on. Developed APEC nations naturally fingered the
European Union as the major agri-offender in this
worldwide rich-country scandal.
Look
homeward, Gloria
The prize for hypocrisy at APEC,
though, goes to Philippine President Gloria
Macapagal-Arroyo. Bush's female doppelganger - another
presidential offspring representing a privileged
minority illegitimately inaugurated on January 20, 2001
- took time out of her busy schedule of sex and photo
opportunities with misidentified terrorists to state,
"Security impedes prosperity, but at the same time,
poverty feeds extremists." The Philippines' feudal land
system, lack of universal free public education, and the
elitist institutions Madame President exemplifies do
more to impede prosperity and feed extremism than Osama
bin Laden could do in 100 years.
Of all the APEC
leaders, Arroyo should recognize the limits of playing
the terrorism card. Her invitation to US troops to help
her own forces crush Abu Sayyaf incited widespread,
mainstream opposition and elevated the status of this
group of bandits. Moreover, the US training mission
remarkably failed to make the Philippines a safer place
for citizens, business people or foreign investors, and
batted just .500 in freeing US hostages alive.
While bin Laden and his rich band of hijackers
deride the notion of terrorists arising from poverty,
there is no denying that terrorism has economic impacts.
The Bali bombings dealt Indonesia a devastating blow,
one that will deny its struggling economy more than $1
billion in foreign exchange due to reduced tourism, and
forestall billions more in desperately needed overseas
capital.
But Indonesia was in the dumps for five
years before the Bali attacks, and its insecurity was
only one aspect of longstanding systemic dysfunction.
Japan's economy, untouched by terrorism, has been in
decline for a dozen years. Technology manufacturing in
South Korea, Singapore and Taiwan didn't implode because
of a car bomb. Yielding APEC's focus to terrorism hands
the forces of evil a victory by distracting national
leaders from their far more important mission of
boosting economic growth and coordination, and converts
Arroyo's self-serving statement to a self-fulfilling
prophesy.
APEC's to-do list
APEC
should provide a forum to examine problems that hold
back economic progress in the region, with the twin
advantages of representing both rich- and poor-country
interests and placing an international imprimatur on
proposed solutions, potentially drawn from the best
thinkers the region has. While domestic policies matter
and situations differ, even without a clue about the
Latin American participants, it's easy to identify
several areas where this year's APEC summit could have
made valuable contributions in line with its real and
still worthwhile mission.
Banking reform.
The Asian crisis of 1997 left banking in shambles in the
ex-tigers, Japan's crisis predates that crash, and China
has yet to face up to its mountain of bad loans.
Reforms, where they have occurred, too frequently choke
off lending needed to revive business and spur growth.
Selling key financial institutions to foreign investors,
particularly if the banks have reverted to the state
and/or received large dollops of public money, is
politically difficult. Global financial institutions
have failed to provide a blueprint to untie this knot.
An APEC action plan would need to take into account the
need to keep loans available for growth while addressing
control issues. A worthy goal would be a formula for
marrying private domestic or overseas capital and honest
local management.
Privatization. From
Korea Tobacco & Ginseng to Indonesia's Semen Gresik
to China Telecom (See When China Telecom rings, hang
up, October 22) to many of the banks mentioned
above, countries are struggling to bring investor
capital into state-owned companies, many of them former
monopolies. Again, global financial institutions blandly
encourage sales, leaving each country, and each case,
subject a variety of vagaries. Moreover, as with the
banks, there are political difficulties in selling off
the national silverware, even when it's severely
tarnished. An APEC privatization blueprint would not
only provide an outline for taking state companies to
market and provide sensible pricing formulas, but offer
meaningful justifications for the real reasons for
privatization: to spur growth and innovation, and curb
corruption and market distortions.
Digital
divide. There are now two digital divides across the
Asia-Pacific region. One is between technology haves and
have-nots. The other is between enormous production
capacity and flagging demand. The APEC grouping, with
apologies to India and SAP, is where the high-tech
action is. While the banking and privatization dilemmas
require an enormous amount of expert analysis,
addressing these digital divides seems like something
presidents and prime ministers could have worked out
over a couple of cold Tecates.
Sweatshops. For starters, they'd need to
come up with a more appropriate term. But no matter what
you call the poor-country factories for rich-country
goods, they raise concerns on both sides of the income
gulf. Wealthy consumers, with domestic labor unions as
cheerleaders, often unfairly malign purportedly inhumane
factory conditions and exploitation, while poor-country
worker/victims protest when orders dry up. APEC
labor-practice standards could assuage do-gooders'
consciences and help level the playing field among the
countries competing to make your Air Jordans.
The good news (and bad news) is that these
issues will likely be just as relevant for next year's
APEC junket in Bangkok. Let's pray that by then
terrorism as a dominant issue has gone the way of
Pokemon.
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