CONFERENCE REPORT

Growth and Governance in Asia Conference

(12-14 March 2002)

The Growth and Governance in Asia conference was held, 12-14 March 2002, at Waikiki Beach Marriott Resort Hotel to advance theoretically informed discussions on growth and governance in the contemporary Asian contexts from societal, political, and economic points of views, and to address possible paths for improved governance. The first of the four panels identified important security issues originating from or exacerbated by weakness in state governing capacity. The second panel evaluated the relative impact of globalization on domestic political economies of the Asian countries. The third panel reviewed possible links between globalization and the Asian states’ capacity to manage their diverse societies. The fourth panel identified unique challenges of democratization by country. Finally, the concluding roundtable attempted to tie globalization, economic governance, social governance, and political governance together in a coherent analytical framework.

In the Challenges in Governance in Asia Panel, participants tackled the concept of good governance from economic, political, and administrative points of views.

• Panelists emphasized different aspects of what might constitute good governance. Some panelists emphasized the outcome-based measurements, such as administrative effectiveness, efficiency, equity, and strategic vision. Others pointed to the procedural aspects, such as participatory democracy, rule of law, accountability, transparency, responsiveness, and consensus building. A broader output measurement in terms of human development, rather than traditionally used economic indicators alone, was also suggested to bridge the procedural and output-based assessment. Those panelists who emphasized the output measurements over the procedural measurements pointed out the fragmented civil society outside Northeast Asia as hindrance to good governance.

• In terms of their assessment of Northeast Asian countries, panelists agreed that good governance prevailed at both domestic and international levels.

• In Southeast Asia, mixture of optimism and pessimism prevailed among the panelists. Panelists agreed that states continue to be the principal actors in economic governance, and that they need to transform themselves to cope with the challenges of globalization. There was a clear consensus that corruption has no part in good governance, and that participatory democracy would reduce the overall level of corruption.

• Both utilities and limits of U.S. foreign policy in promoting good governance in Asia were discussed, with cautiously positive assessments on promotion of economic transparency and somewhat more reserved assessments on promotion of social and political governance.

The Globalization and Economic Governance in Asia Panel addressed capital flows, regionally skewed short- and mid-term effects of globalization, and governing capacity of the states.

• Southeast Asia as a destination of foreign direct investments has faced increasing challenge from China. No coordination of FDI policies has taken place between the ASEAN countries and China, and competition toward accelerated overall economic deregulation is taking place. The reduced relative importance of Japanese investments also contributes to this trend.

• States continue to positively engage in economic globalization, while avoiding the negative impacts. Industrial policy aimed at technological upgrading and labor policy to cope with economic dislocations were some of such examples offered by the participants. However, due to the diverse human and natural resource allocations, infrastructure development, and political systems in Asia, there was a broad agreement among the panelists that there was no single formula to deal with economic globalization.

• The role of enhanced citizen participation was viewed with mixed eyes: some positively foresaw emergence of the “Third Way” governance, whereas others warned of populist fiscal blowouts and macroeconomic failure.

• A pessimism was also voiced by a participant referring to the skewed benefits of globalization, favoring the developed countries first, large newly industrialized countries (NICs) second, before passing any benefit over to the least developed countries.

The Globalization and Political Community in Asia Panel addressed the possible link between globalization and management of diversity.

• Panelists agreed that globalization was not the main factor in success or failure of the management of diversity. Panelists commonly pointed out that democratic political system supported by strong civil society as key to management of diversity, but did not reach a firm conclusion as to which comes first in cases of transitional polity and society. A view was expressed in regard to the effect of globalization that its skewed effects closely resembled the pre-existing social inequity within each society.

• While a positive view was expressed on the overall growth globalization brought, which enabled inter-ethnic re-distributive policies, a caution was raised about the new intra-ethnic class division, in the case of Malaysia. Comparatively, it was pointed out that the most acute internal security problems in Southeast Asia are present in the countries with least global exposure, although the case of Bhutan may defy extending this generalization into South Asia, as pointed out by a participant.

• Degree of politicization and radicalization of Islam varied from one country to another, as well as the context in which Islamic groups are placed, although participants commonly identified this issue to be an important one. A participant echoed the panel discussion by pointing out the existence of socio-economic grievances behind the politicized and radical Islamic movements.

In the Growth of Civil Society and Democratization in Asia Panel, panelists agreed on an abstract definition of civil society organizations that encompassed their role as an intermediary between the people and the state and their autonomy from the state. Although panelists in general recognized positive contribution of civil society organizations on social stability and economic growth, cautions were offered from three perspectives.

• First, civil society is often absent or underdeveloped and fragmented in Asia.

• Second, growth of civil society has proceeded with the state endorsement in Asia, and therefore its further growth is contingent upon continued state support. It was pointed out that civil society organizations have been successful in ousting government leaders, but failed to sustain coherent governing coalitions afterward.

• Third, not all civil society organizations are inherently “good.”

• However, panelists recognized mutually enhancing role between growth of civil society and democratization, without presuming the direction of causal relationship. Panelists supported outside encouragement of civil society growth in Asia, but were skeptical of more forceful imposition of such norms upon Asian countries, provided their diverse political, economic, social, and cultural dynamics.

Conclusion

• Good governance entails both procedural and outcome measures.
• Economic globalization poses a new challenge to state management of national political-economy, but states continue to seek ways to mitigate the negative impacts.
• Regionalism may also substitute the eroded national economic sovereignties. On the other hand, it is also recognized that globalization can also bring about standardized and update economic practices that help state management of economy.
• Growth of civil society organizations and their growing transnational networking can provide a more careful scrutiny against abusive economic globalization that may hurt national economic growth and/or human development.
• Globalization is a mixed blessing for governance of diversity, contributing to both strengthening of parochial group identities and spread of a secular economy-based global consumer culture.
• States more than ever face a challenge of minority representation, and in a long term, this will be best done within a democratic framework.