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Lee Siew Hua

Asian crisis one of power structures: BG Yeo

Archaic political systems are just incapable of responding to urbanisation and globalisation

By CHUA LEE HOONG IN DAVOS

THE Asian crisis is not only economic, but political. It is a crisis of power structures that are relics of colonial and Cold War days that have proven incapable of responding to urbanisation and globalisation.

Singapore's Information and the Arts Minister Mr George Yeo gave this fresh perspective on the Asian crisis on Saturday at the World Economic Forum here, during a session on Asia's competitiveness.

Traditional power systems in Asia had their bases in the countryside, he said, as seen for instance in China and Vietnam.

These are now under attack as cities become the engines of growth in modern society.

Millions of people enter the cities each year looking for jobs, and if they find none, they become a massive problem for the governments, which in most cases are not well-equipped to deal with them.

Where in the past the armies were effective instruments of control, they could no longer play the same role when populations were better educated and more worldly.

That was why, said Brig-General (NS) Yeo, there was a "systematic diminution" of the army's role in Indonesia, and Thailand, where Prime Minister Chuan Leekpai had done a "very good job" in keeping the army behind the lines.

In the 21st century, said BG Yeo, countries that would do well would be those able to "devolve power wisely and judiciously" to the cities, so that these could "come alive" and generate wealth for the entire country.

He highlighted two other conditions for nations' success in the 21st century.

One is the ability to evolve new power structures that reduce the "rent-seeking" behaviour of powerful, politically-connected companies.

Globalisation, he said, had undercut governments' abilities to tax and control the movements of money and people.

Crony companies that in the past survived by extracting economic rent from the economy would no longer be able to do so, now that technology enabled people to bypass them, he said.

Another condition is the need to depoliticise race and religion.

One reason Thailand could recover relatively quickly was that its races were well-assimilated, he said, contrasting this with the situation in Indonesia, where the "furious political reaction" to the ethnic Chinese was today "part of the dynamics of the revolution".

"Once you move down the path of politicising race and religion, it's a hell of a job to backtrack," he said.

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