Harvard Asia Quarterly Spring 2002 1 HAQ CONTENTS

HAQ Editorial Staff

Editor in Chief Wai-Yin Alice Yu Harvard Law School 4 Why Can’t Japan Apologize? Executive Editor Ilya Garger Institutions and War Memory Since 1945 Graduate School of Arts and Sciences Steven T. Benfell A specific set of institutions established after 1945 explains the continuing importance Managing Editor Cindy Xin Zhou of the memory of World War II in Japanese domestic politics and foreign relations. Graduate School of Arts and Sciences Steven Benfell concludes that apologizing to wartime victims is not simply a question of remorse, but of institutional change in Japan. Production Editor Lisa Thomas Chung Harvard Graduate School of Design

Web Editor Matthias Lind 12 Interview with Ezra Vogel Graduate School of Arts and Sciences China-Japan Relations Area Editors Ilya Garger Sharri Clark, Central Asia Ezra Vogel talks about the challenges facing Sino-Japanese relations in light of the Graduate School of Arts and Sciences ongoing salience of history. He emphasizes that regardless of other factors, the United Caroline Cooper, China Graduate School of Arts and Sciences States will continue to play a key role in shaping relations between the two countries. Jongsoo Lee, Korea Graduate School of Arts and Sciences Emily Parker, Japan Graduate School of Arts and Sciences Sujata Barai, South Asia 17 Dynamics of Sino-US Relations Harvard Law School The Perspective from Beijing Jin Pao, Southeast Asia Harvard Law School Willy Wo-Lap Lam With the approaching retirement of Jiang Zemin as President and Communist Party Associate Editors general secretary, Chinese foreign policy towards the US may change under the new Harvard Law School Melody Chu leadership of Hu Jintao. Willy Lam considers the future of Sino-US relations, in light of Wei Lily Zhou the expected changes in the Chinese leadership and the policies of the Bush adminis- Graduate School of Arts and Sciences tration. Sharon Chen Rebecca Culley Jay Fann Holly Gayley Julianna Lee Michael Richard 24 Interview with Sadako Ogata Harvard Divinity School Japan and the Reconstruction of Afghanistan Seong Lee Emily Parker Harvard Asia Quarterly Japan’s special envoy for Afghan affairs and the former United Nations High Publishing Board Commissioner for Refugees Sadako Ogata talks to HAQ about Japan’s involvement in Virginia Harper-Ho the reconstruction of Afghanistan. Harvard Law School Victor Shih Graduate School of Arts and Sciences 28 The Breakthrough Generation Dalit Youth in Contemporary India Marika Vicziany Caste boundaries are blurring in Indian urban centers, resulting in the creation of a “breakthrough generation” of untouchables who are pursuing opportunities never before possible for members of their caste. Using interviews with students at the University of Mumbai, Marika Vicziany examines how the values and aspirations of this generation differ from those of their parents, and their counterparts in rural India.

Harvard Asia Quarterly 2 Spring 2002 Volume VI, No. 2 Spring 2002

HARVARD ASIA QUARTERLY is a student publication affiliated with the Harvard Asia Cen- ter. HAQ was established in 1997 by members of the Harvard Asia Law Society in conjunction with students from other graduate and professional programs at Harvard University as an interdisciplinary journal of Asian affairs.

LETTERS 38 The Threat of Islamic Terrorism HAQ welcomes readers’ letters and comments. A View from Southeast Asia HAQ reserves the right to edit correspondence for length or format, and the right to decline to Eva-Lotta E. Hedman print. Letters should be addressed to the edi- The notion of a “global war on terrorism” and the threat of “Islamic terrorism” beg tor and submitted to the address below, or sent further questions about variation across national contexts. Eva Hedman examines to: [email protected]. the diversity in the responses of Indonesia, the Philippines, Malaysia and Thailand. SUBMISSIONS HAQ invites the submission of articles and es- says to be considered for publication. Submis- sions should address matters of contemporary concern in Asia. Submissions should be deliv- 45 Korea’s New Development Paradigm ered in electronic form via email. All submitted materials become the property of HAQ. HAQ Premier Business and Cultural Center in Asia reserves the right to reject submissions and to Kihwan Kim edit materials for length, format and content. Kihwan Kim outlines a strategy for Korea’s transformation into a business and cultural To receive HAQ Editorial Guidelines, submis- center. While noting that Korea has great potential to become such a mecca for sions schedules, or additional information, please contact HAQ at the address below, or international business, he points out the many obstacles in the way of such visit our website at www.haqonline.org. Elec- development and offers suggestions for overcoming them. tronic submissions or inquiries should be sent to: [email protected]

SUBSCRIPTIONS Annual subscriptions to HAQ are available at 53 Harvard Asia Business Conference 2002: a rate of $28.00 (individual subscribers) and $35.00 (institutional subscribers) for four issues Phoenix Rising delivered in the United States and $45.00 for HAQ provides coverage of the Asia Business Conference held at the Harvard deliveries elsewhere. For more information, Business School on February 1 and 2, 2002. Keynote speeches were made by please contact HAQ or your academic peri- odical subscription service. Subscriptions are China’s Vice-Minister of Finance, Jin Liqun; former US Trade Representative, available online at our website: Ambassador Charlene Barchefsky; and managing director of Salomon Smith Barney, www.haqonline.org Jeffrey Shafer. Plenary panels and discussion panels addressed a wide range of topics, with Asia’s economic recovery as the overarching theme. Please address all correspondence to: Harvard Asia Quarterly 62 Conference Focus c/o Harvard Asia Center 1737 Cambridge Street India: A Turning Point on Trade? Cambridge, MA 02138 Susan Esserman and Arun Venkataraman USA Former Deputy US Trade Representative Susan Esserman and Fax: (617) 495-9976 Arun Venkataraman discuss the factors that may push India into www.haqonline.org a more liberal approach to international and regional trade. email: [email protected]

Credits: Cover Design by Lisa Thomas Chung Photo credits: Dan Hui (cover, p.5); Marika Vicziany (p.29)

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Harvard Asia Quarterly Spring 2002 3 WHY CAN’T JAPAN APOLOGIZE? INSTITUTIONS AND WAR MEMORY SINCE 1945

BY STEVEN T. BENFELL hen he ascended to the Japanese premiership on April 26, 2001, Koizumi Junichiro seemed unlike any of his recent predecessors. Elected to the Liberal Democratic Party (LDP) presidency Steven Benfell is Assistant Professor of Political W without major factional support and largely because of his enormous per- Science at Western Michigan University. In 1997- 1998 he was a post-doctoral fellow at Harvard sonal popularity, Koizumi seemed to signal a new type of Japanese leader University’s Weatherhead Center for International and a potential reformation of Japanese politics and political institutions. Affairs. His research focuses on nationalism and He both promised and seemed to embody change. During the race for the national identity, collective memory, and party presidency, Koizumi declared that, if elected, he would pay an offi- Japanese politics and international relations. cial visit on the symbolically important day of August 15 to the Yasukuni Shrine, where Japan’s war dead (including convicted war criminals) are enshrined. Once he won the LDP presidency, Koizumi reaffirmed this commitment. Koizumi’s boldness and candor drew criticism both within Japan and from the main targets of Japan’s past militarist aggression, especially the two Koreas and China. While other prime ministers had visited Yasukuni on August 15 or other days, most did so as “private citizens,” insisting that the visit was not intended as a political statement or as a reflection of government views about war responsibility. One previous prime minister, Nakasone Yasuhiro, had visited the shrine in his “official capacity” and succeeded in setting off a domestic and international firestorm, causing both Nakasone and his successors to avoid the symbolically provocative action throughout the late 1980s and the 1990s. Koizumi’s bold declaration therefore seemed to signal change in how the government – or at least the Koizumi administration – would address the thorny issue of Japan’s war responsibility. In contrast to the deliberate ambiguity of past premiers on the issue, Koizumi’s pledge suggested that his government would be forthright in addressing war responsibility, even in the face of inevitable criticism and possible harm to relations with Japan’s neighbors. By August 15, however, it was clear that Koizumi’s statement on the issue was not a signal of a real change in the government’s approach to the “politics of apology.” Instead, it was yet another instance of a long-established pattern of forthright statements followed by cautious back-track- ing, followed in turn by deliberate and carefully considered ambiguity. In the end, Koizumi did visit Yasukuni, but on the less symbolically loaded day of August 13 rather than the actual anniversary of the end of the war. And on August 15, Koizumi issued carefully worded statements that indicated “deep remorse” for the events of the past and “sincere condolences” to those who suffered because of those events. “We have caused great pain and suffering to other nations, particularly our Asian neighbors, during the war,” he said. Although Koizumi’s statements were meant to mol- lify Japan’s critics, the visit to Yasukuni (which appealed to a domestic right-wing constituency) counter-balanced any goodwill created by conciliatory rhetoric. In short, despite Koizumi’s initial boldness, his ultimate actions reaffirmed the deliberately ambiguous pattern of his predecessors, in which cautious conciliation is paired with actions that predictably provoke outrage from Japan’s neighbors.1 A clear example of this pattern can be seen in the experience of Hashimoto Ryutaro, Koizumi’s chief rival in the April 2001 LDP presidential election and prime minister from 1996 to 1998. Hashimoto’s own statements and actions prior to his assumption of the premiership suggest

Harvard Asia Quarterly 4 Spring 2002 a strong affinity with what may be called a “revisionist” po- Koizumi, then, was not the first to express stark views sition on the war. Like many who question both the ambigu- and then choose (or be forced) to moderate those views and ity of official government statements and the “masochism” retreat into deliberate ambiguity. From the earliest postwar of progressives who call for more open and self-critical ac- days to the present, in fact, Japanese leaders have followed counting of Japan’s imperialist past, Hashimoto resented the same general pattern in addressing the issue of Japan’s moves toward open apologies and overtly opposed additional responsibility for the war, no matter the ideological or politi- government-funded compensation for atrocities committed cal tendencies of the leader involved. From the very first of- by Japanese forces. In 1993, when non-LDP prime minister ficial war commemoration in independent Japan (held on the Hosokawa Morihiro issued an unprecedented (for a sitting day the occupation ended in 1952) to the statements and ac- prime minister) statement that Japan’s war had been a “war tions of Koizumi in the summer of 2001, Japanese leaders of aggression” (shinryaku senso), Hashimoto strongly criti- have taken a very similar approach to the politics of apology. cized the prime minister. While Hashimoto did not deny that This deliberately ambiguous approach reflects a view of Japanese actions in China and Korea had “contained elements history that may be called the “renegade” view of the war.4 of aggression,” he criti- In this view, only a small cized Hosokawa’s state- group of “renegades” – ments for implying that mostly military men like only Japan had been ag- Tojo Hideki – led Japan gressive (when, into war. This group es- Hashimoto claimed, sentially usurped the Western powers had power of the emperor and acted with equal or misled the Japanese greater aggressiveness), people into a self-destruc- and for opening the door tive and imperialist war. to myriad unjust repara- Individual soldiers who tion claims from self-de- fought for Japan, the Japa- fined “victims” of Japa- nese people as a whole nese aggression.2 More- and even the emperor him- over, Hashimoto had self were blameless; they long aligned himself with were “victims” of a mili- the vehemently revision- tarist conspiracy. Accord- ist Japan Bereaved Families Association (Nihon Izokukai, ing to this view, issues of Japanese guilt were settled with the or JBFA), even serving as president of the group while he Tokyo War Crimes Trials and other less prominent tribunals, was a sitting Diet member and a member of the cabinet. and issues of reparation were settled with the San Francisco Hashimoto also visited the Yasukuni shrine with relative regu- Peace Treaty of 1951 and the series of bilateral agreements larity, publicly trumpeting the interests and views of the JBFA (with the signatories of the Peace Treaty and also Taiwan, and other revisionist groups. Based on this past, one could South Korea, and the People’s Republic of China) that fol- perhaps conclude that when prime minister, Hashimoto lowed. As a result, all but a handful of Japanese join the many Ryutaro would promote a revisionist agenda with regard to Koreans, Chinese, Filipinos, Malays, Americans, and count- Japan’s war responsibility. less others as “victims” of the war, and additional apologies Once he ascended to the premiership in January 1996, and offers of compensation are unnecessary. As suggested however, Hashimoto’s revisionist views softened (or appeared by the deliberate ambiguity of Hashimoto and Koizumi, this to soften), and his own statements and actions followed the “renegade” view has been the dominant and “official” view ambiguous pattern of his predecessors rather than the pro- held by the political and media mainstream in postwar Ja- vocative actions and statements one would expect of the presi- pan, although (as discussed below) it has not been hegemonic dent of the JBFA. Indeed, Hashimoto felt compelled to rein the sense that it supercedes and de-legitimizes other views sign the presidency of the JBFA on his assumption of the of the war.5 office of prime minister. Rather than visit Yasukuni on Au- But why has this “renegade” view of the war remained gust 15, as he had done previously as a Diet member and a dominant? Why do virtually all prime ministers – even those sitting cabinet minister, Hashimoto visited in July, insisting who seem to advocate revisionist views, like Hashimoto and that his visit was not “official” but “personal” and was in perhaps Koizumi – ultimately retreat into this official view? fulfillment of a childhood promise to an older friend who Why are the relatively forthright apologies of more progres- died in the war. Moreover, in his official statements on the sive prime ministers like Hosokawa Morihiro (1993) and anniversary of surrender, Hashimoto drew upon the already Murayama Tomiichi (1994 and especially 1995) watered established rhetoric of ambiguity employed by most of his down by the opposition they engender and their own ulti- predecessors. War itself, in Hashimoto’s pronouncements, mate ambiguity? Why does the pattern seen in the careers of was to blame for the devastation and inhumanity of the con- Hashimoto and Koizumi repeat with such regularity? flict, as all Japanese (even the emperor) suffered with the The answers to these questions lie in an analysis of the rest of Asia.3 Even Hashimoto, whose previous statements institutional structure set up in Japan after the end of World and actions pegged him as a revisionist, toed the ambiguous War II. In this article, I outline this argument by first discuss- government line during his years in the premiership. ing how a set of institutions helped channel official Japanese

Harvard Asia Quarterly Spring 2002 5 memory of the war and placed boundaries on how govern- of the US occupation authorities to exonerate the emperor of ment leaders should speak and act in commemoration and blame, as US authorities hoped to use the emperor in achiev- remembrance of the war. Even ideologically opposed leading their own aims for Japan. General MacArthur, the Su- ers have spoken and acted within the same set of institutional preme Commander for Allied Powers (SCAP), prohibited constraints, with a correspondingly high level of continuity the prosecution and the defense from calling the emperor as in official discourse on the war. Second, I briefly discuss some a witness, and SCAP refused to carry out even a peremptory of the key general consequences of this institutional frame- investigation of the emperor’s possible liability for actions work, as Japanese leaders and other actors have responded carried out by his formal subordinates.6 to the set constraints. Finally, I offer a few reflections on the Once the verdict was issued, SCAP further ensured that implications of my analysis for the future of the politics of the “Tokyo Trials view of history” remained dominant in Ja- apology, both within Japan and in Japan’s relations with its pan. American censors required the Japanese press to sup- neighbors. port the verdict, to back up the prosecution’s specific charges against Tojo and other Japanese leaders, and even to use the THE INSTITUTIONAL CONTEXT OF THE POLITICS OF APOLOGY term “Pacific War” (thus de-emphasizing Japanese aggression in mainland Asia) when referring to the conflict. Like In postwar Japan, the meaning and political importance Japan’s conservative leaders, US officials hoped the trials of historical interpretations were bounded and channeled by would settle the issue of war responsibility so attention could a set of seemingly disparate institutions. These institutions be more clearly focused on the task of rebuilding Japan as an helped codify and propagate – and ultimately came to em- US ally. In both process and outcome, the Tokyo Trials codi- body – the “renegade” view of history outlined above. In so fied, institutionalized, and propagated the “renegade” view doing, they set the stage on which subsequent politically- of the war. They helped weave this view of the war into the relevant historical discourse would unfold, and ensured that institutional tapestry of postwar Japan, ensuring that this view this stage was invariably a political one. These institutions achieved and maintained official sanction. included: the Tokyo War Crimes Tri- In addition to the Tokyo Trials, als and the occupation purges of war- the waves of purges carried out dur- time leaders; a refashioned political ing the occupation further entrenched role for the emperor; international The Tokyo Trials reinforced the the “renegade” view of the war. As treaties that codified war responsibil- view that only a handful of with the Tokyo Trials, relatively few ity; a set of cultural institutions like renegade leaders were people were removed from public life museums, rituals, and commemora- responsible for Japan’s (0.29% of the population, in contrast tion days; and history education in aggression. with 2.5% in US-occupied areas of Japan’s relatively centralized educa- Germany), and many of those were ul- tion system. I will discuss each of timately rehabilitated, even before the these institutions briefly, explaining how each helped set the end of the occupation.7 However, those who were purged terms of politically relevant historical debate in postwar Ja- included many who may have earlier questioned the “ren- pan. egade” view of the war that prospered under Yoshida Shigeru and other postwar leaders. For example, had more revision- The Tokyo Trials and Occupation Purges ist figures like Hatoyama Ichiro or Kishi Nobusuke (both of whom served as prime minister after the occupation) found The International Military Tribunal for the Far East (or themselves in power before the institutional framework of Tokyo Trials, as it is more readily known) codified Japanese postwar Japan had been established, the outcome may have war responsibility and enshrined the “renegade” view of the been quite different. As a result, while the Tokyo Trials insti- war as official gospel. The outcome of the trials, as pros- tutionalized the view that relatively few were responsible for ecuted by the Americans and facilitated by prominent Japa- the war, the occupation purges pushed out of office those nese witnesses and even some of the defendants, clearly sup- who may have fostered an even more narrow view of war ported the “renegade” view. Page after page of testimony guilt. Thus the purges, in addition to the Trials, helped insti- points the finger at a small group of militarists led by Tojo tutionalize the “renegade” view that has dominated postwar Hideki. Trial testimony paints a picture of tightly focused political discourse about the war. individual responsibility for the war and its atrocities, as one would expect from a war crimes tribunal modeled after do- The Emperor mestic criminal courts; a more nuanced, complex, and con- textually rich account is nowhere to be found. The constitutional and symbolic reinterpretation of the Moreover, relatively few Japanese leaders were ulti- role of the emperor – also carried out under American occu- mately tried and convicted of the “crimes against peace” with pation – further institutionalized the “renegade” view of the which the allies charged them – a fact which reinforces the war. For example, the explicit political position of the em- view that only a handful of renegade leaders was responsible peror was formally rewritten in the postwar Constitution. The for aggression. Most glaringly absent from the court’s in- emperor – the former “head of the empire” in whom “the dictments was the emperor, in whose name the war had been rights of sovereignty” were combined – now was cast in Ar- pursued and in whom the 1890 constitution vested ultimate ticle 1 as the “symbol of the state and of the unity of the and inviolate sovereignty. Indeed, it was a deliberate policy Japanese people.” The imperial throne was thus shorn, at least

Harvard Asia Quarterly 6 Spring 2002 in theory, of its political potency and – more to the point – its national legal precedent for subsequent bilateral reparations political accountability. Both Japanese and American authori- agreements. Article 14 of the treaty stated that “the Allied ties proclaimed that this new politically inert role for the Powers waive all reparations claims,” and that Japan’s re- emperor was merely the formalization of the long-standing sources were “not presently sufficient” to pay large sums to reality in Japan. Thus, in addition to removing the postwar cover damages inflicted during the war. The treaty also rec- emperor from mere politics, this move also implicitly ab- ognized (in Article 11) the verdicts of the Tokyo Trials as the solved the emperor of blame for the war. If Hirohito had al- final word on Japanese war responsibility. ways been a mere symbol of the Japanese state, then clearly As noted above, the most important state “victims” of he had not called the shots or even condoned the actions of Japanese imperialism (China and the two Koreas) were not his militarist subordinates. The leaders who did lead Japan signatories to this treaty. But when normalization agreements into war were not subordinates at all, it could be argued, but were signed between Japan and South Korea (1965) and be- usurpers of the emperor’s authority and abusers of the legiti- tween Japan and the People’s Republic of China (The Tanaka- macy that authority provided. And if the emperor himself – Zhou Communique of 1972 and the Treaty of Friendship of he in whose name the war had been declared and atrocities 1978), the San Francisco framework was reinforced. South had been committed – was blameless, how could the Japa- Korea demanded the relatively paltry sum of $500 million nese people be held responsible for the war? If the emperor from the Japanese government (at a time when the Japanese had been duped and victimized by the militarist conspiracy, government had “sufficient resources” to pay much more), then so too had the Japanese people, the civilian leadership, with no provision for future claims, while the Chinese fully and even the majority of officers in the army. The constitu- renounced their “demands for war indemnities from Japan.” tional reinterpretation of the emperor’s position clearly rein- These bilateral agreements thus reinforced the principles of forced the “renegade” view of the war. both material and moral war responsibility embedded in the In addition to explicitly reinterpreting the emperor’s San Francisco Peace Treaty. Indeed, since all three of these constitutional position, occupation and government authori- treaties were signed, the Japanese government has repeat- ties symbolically reinforced this rein- edly referred to their legal precedence terpretation. For example, documents in denying the legitimacy of subse- and diaries were released which por- quent claims (for example, from so- trayed Hirohito as a man of peace who If the emperor himself was called “Comfort Women” or former opposed the attack on Pearl Harbor blameless, how could the prisoners of war) for reparations to and worked behind the scenes to per- Japanese people be held governments or compensation to in- suade militarist leaders to surrender, responsible for the war? dividuals.9 The international legal culminating in his decisive interven- framework established by these trea- tion in the deliberations that produced ties remains in force today. the surrender announcement of August 15, 1945. Moreover, while the typical image of the wartime emperor was of a mili- Cultural Institutions tary officer clad in full regalia riding a white stallion, the postwar image was of “Citizen Hirohito,” a quiet, unassum- Not only did formal government institutions embody and ing “everyman” who wore plain Western clothes and a brown propagate the “renegade” view of the war, but a set of what fedora. Hirohito was sent on a wave of public tours and ap- may be termed “cultural institutions” – including museums pearances to reinforce this image.8 This symbolic position and commemoration days with accompanying rituals and of the emperor as a peace-loving symbol of “ordinary” and ceremonies – further reinforced the “renegade” view and now “pacifist” Japan was explicitly reinforced in the 1947 helped set the terms of political discourse about the war. In a constitution, whose first two chapters outline the symbolic country where museums abound and where aspects of an- position of the emperor and the postwar renunciation of war. cient, medieval, and early modern history are widely com- In short, then, both the new constitutional position of the memorated, museums on the war have, until very recently, emperor and the symbolic reinforcement of that position fur- been few and far between. Those that did memorialize the ther institutionalized the “renegade” view of the war. war often focused on specific aspects of the war or glorified the nobility of Japanese sacrifice during the war. In the latter International Treaties category are museums that take at least an implicitly revisionist perspective, such as the Yushukan Hall at the Yasukuni A set of international treaties and agreements, combined Shrine or the kamikaze pilot museum at Chiran in Kagoshima with the unwillingness of the Japanese government to pro- Prefecture. These museums – far from exploring the issue – vide officially-funded reparations or compensation beyond ignore the issue of Japan’s war responsibility. They explic- the relatively token amounts determined in the 1950s, formed itly glorify Japanese servicemen and their aims, placing par- the international legal basis for the “renegade” view of his- ticular emphasis on those who (like the kamikaze pilots) com- tory. Most important was the San Francisco Peace Treaty of mitted suicide in the name of the emperor. While neither of 1951, signed by Japan and fifty of its former enemies (nota- these museums (nor others like them) is officially sponsored bly absent were the Soviet Union, the People’s Republic of by the Japanese government, the Yushukan was until recently China, Taiwan, and both North and South Korea). This treaty the only prominent and permanent museum in Tokyo which was important because it explicitly codified the monetary explicitly remembers the war. component of Japan’s war responsibility, and it set the inter- Museums commemorating the atomic bombings – espe-

Harvard Asia Quarterly Spring 2002 7 cially the Peace Museum in Hiroshima – have been more ration rituals that have helped institutionalize aspects of the prominent and heavily visited. The “Peace Museum” was war. While never officially recognized as a national holiday, not designed to memorialize the totality of the war. Rather, August 15 corresponds with the celebration of o-bon, the its focus has been overwhelmingly (and appropriately) on period when many Japanese return to the home towns portraying the depth and scale of suffering caused by the (furusato) and honor their ancestors. Hence, it has been used atomic bomb – a trait it shares with the similar museum in as a date on which to remember those who perished during Nagasaki. Until 1995, the museum also neglected to place the war. the bombings in a historical context, building instead on the Each August 15, at least three events of symbolic im- assumption that the bombings were evil and ought never to portance occur. First, the prime minister offers a speech or be repeated, no matter the context. The statement on the war, often issuing museum thus became a testament to “apologies” and memorializing Japa- the horrors of atomic war. Moreover, nese and other “victims” of the conflict. almost all Japanese children have been The Peace Museum has perhaps Second, this speech has been given for taken through one of the peace muse- unintentionally fostered the over thirty years at an enormous be- ums on school-sponsored field trips, notion of Japanese victimhood. reavement ritual held at Tokyo’s while equally powerful exhibitions on Budokan Hall and attended by top gov- Japanese aggression or atrocities have until very recently been ernment officials, the emperor and empress, and the leaders unavailable for similar educational purposes. As a result, at and members of the JBFA. Third, many top government offi- least two generations of Japanese school children have been cials choose this day to worship at Yasukuni Shrine to both exposed to strong images of Japanese suffering under atomic honor the war dead and at least implicitly glorify their ac- attack without corresponding education in the suffering in- tions. Prime Minister Mori Yoshiro’s speech at the August flicted by the Japanese during the same general conflict. 15, 2000 Budokan gathering is typical in that he explicitly Therefore, the Peace Museum has perhaps unintentionally recognized Japanese victims of the war, expressed “regret” fostered the notion of Japanese victimhood that underlies the and “condolences” (but not “apology”) to largely unspeci- “renegade” view. Only in the 1990s did museums appear fied non-Japanese victims of the war, and blamed the suffer- which featured more open exhibits of Japanese aggression ing on war in general rather than the specific actions taken and atrocities, but because they are so new and have fewer by a government or people. He said, “The war caused tre- visitors than those mentioned above, their long-term influ- mendous pain and sorrow not only to our country but also to ence remains unclear.10 people in many countries, particularly those in neighboring Commemoration days, and the rituals and ceremonies Asian countries. We would like to express our deep regret held on those days, also contributed to the official dominance and condolences to them sincerely.” War responsibility in of the “renegade” view. For example, August 6 memorial- such a statement is ambiguous, to say the least. The implica- izes the date when the first atomic bomb was dropped on tion is that war just happens, rather like a natural disaster. Hiroshima. Each year, an extraordinary gathering of atomic Though Mori is not known for his eloquence or political bomb victims (hibakusha), prominent politicians (usually tact, his statements in 2000 actually follow a long-standing including the prime minister), progressive peace activists, pattern set decades earlier and followed by nearly all of Mori’s ordinary citizens, and even right-wing revisionists converges predecessors. Even when some have attempted to break this on Hiroshima’s Peace Park, where speeches are given and a pattern, they have run into significant obstacles. In 1995, for period of silence is observed in memory of those who died example, prime minister Murayama Tomiichi, a Socialist in from the bomb and its after effects. Almost invariably, the coalition with the LDP, made it the goal of his administration prime minister gives a speech in which he decries the use of to pass a strongly-worded “apology resolution” through the nuclear weapons and proclaims Japan’s intention (as the only Diet and issue a clearly-worded apology of his own on Au- nation ever to suffer atomic attack) to fight for nuclear non- gust 15. In the end, however, the Diet refused to pass proliferation and world peace. While the purpose and most Murayama’s resolution and instead passed its own watered- of the effects of this commemoration are laudable and im- down version that left war responsibility ambiguous and important, one unintended consequence may be the further plicitly indicted the Western powers for forcing Japan into propagation and establishment of the notion of Japanese war. Hence, while Murayama’s statement on August 15 did victimhood, as the residents of Hiroshima (and Nagasaki, express the clearest apology to date, his failure to pass the whose memorial service is held three days later) clearly suf- apology resolution and the actions of others in his own ad- fered enormously and uniquely during the last war. This com- ministration (many of whom worshiped at Yasukuni even memoration day thus helped to institutionalize and maintain while Murayama issued his statement) continued the pattern the idea that a small group of renegade militarists led the of ambiguity and obfuscation set by more conservative poli- inherently peaceful Japanese population to near annihilation ticians. Rather than defuse the issue of war responsibility, as by nuclear weapons. Murayama intended, the events of 1995 kept the issue alive In addition, more general war memorial ceremonies have and well.11 been widely and repeatedly held in postwar Japan, especially since the end of the occupation. Over time, the most widely History Education reported ceremonies have been held on August 15, the anniversary of Japanese surrender. This date has invariably fea- In addition to the institutions already discussed, the na- tured important speeches, symbolic actions, and commemo- tional education system also helped propagate and establish

Harvard Asia Quarterly 8 Spring 2002 the “renegade” view of history. From the early postwar pe- FOUR CONSEQUENCES OF THE INSTITUTIONAL FRAMEWORK riod, the Japanese Ministry of Education, with the implicit and often explicit blessing of the occupation authorities, has In addition to establishing the “renegade” view as the sought to ensure that accounts of the war placing blame on official and dominant, if not hegemonic, view of the war in anyone other than a small group of militarists do not appear postwar politics, the institutional framework discussed above in officially sanctioned textbooks. In comparison with much had at least four perhaps unintended consequences. These more detailed accounts of Japan’s earlier history, official his- consequences have in turn contributed to the continuing im- tory education has downplayed and even ignored the war. portance, and even inevitability, of war memory in Japanese When the war is discussed, accounts of the atomic bombings politics and political discourse. or of the fire-bombing of Japanese cities (and the resultant societal effects of Alternative Views of the War the bombings) are more prominent than more embarrassing aspects of the war, Entrance examinations, which While the “renegade” view out- including the atrocities committed. govern educational advancement lined earlier remained both dominant Therefore, it is not entirely accurate to and on which most educational and orthodox, it also opened the door say that the government has sought to effort is focused, almost entirely to alternative views, for reasons dis- reassign war responsibility in its offi- ignore the war. cussed below. The first of these alter- cially approved educational materials; natives might be termed the “progres- rather, it has largely sought to avoid the issue altogether. This sive” or “structuralist” view, which holds that the country can be seen in the typically bland and passive prose used to was not led into war by a small clique of militarists. Rather, describe the war in textbooks, in Ienaga Saburo’s (and oth- the structure of the political, economic, and social systems in ers’) legal attempts to force the Ministry of Education to al- prewar Japan were inherently flawed and led inevitably to low more open treatments of the war in its textbooks, and in war. According to this view, then, the Tokyo Trials outlined the ultimate failure of Nakasone Yasuhiro’s administration an exceedingly narrow conception of war responsibility, to introduce revisionist textbooks in the 1980s.12 Only in the which in fact spreads to the system itself and indirectly im- 1990s, and after the death of Hirohito, the (albeit temporary) plicates those who upheld or even refused to challenge the collapse of LDP dominance, and the exertion of enormous prewar system. Although this view’s emphasis on “structural” pressure from progressives at home and abroad, did the Min- culpability implicitly downplays the notion of individual re- istry of Education begin to introduce even tepid accounts of sponsibility for the war, it also implies the need for greater Japanese atrocities. Even then, a powerful array of politi- levels of compensation, more far-reaching and open apolo- cians, officials, and conservative academics united to oppose gies, and even broad structural reforms in Japanese politics such accounts. and society. Furthermore, the entrance examinations, which govern The progressive view remained a challenge to the “ren- educational advancement and on which most educational ef- egade” view throughout the postwar period, partly because fort is focused, almost entirely ignore the war. Hence, unlike the official view held up so poorly to historical scrutiny. In- other aspects and eras of Japanese history which appear on deed, the prevalence of the “renegade” view depended on entrance examinations, the war rarely crosses the educational the ability of the Ministry of Education and other official stage of Japanese students preparing for the rigorous exami- organizations to suppress, paper over, or somehow explain nations. Therefore, while the control of the Ministry of Edu- away evidence of Japanese aggression and atrocities that did cation is far from monolithic, and while some individual not explicitly blame a cabal of militarists. The government teachers have defied ministry guidelines and introduced their and other supporters of the “renegade” view were able to do students to more balanced accounts of the war, the Ministry’s so only imperfectly, and the progressive view found adher- policies and the structure of the examination system have ents among some of Japan’s more prominent intellectuals, contributed to the dominance of a view that gives a place to whose positions in the academy and access to the media en- Japanese suffering and downplays the suffering inflicted by sured there was an audience for their critique of official or- Japan on others. thodoxy. In summary, then, a set of seemingly unrelated institu- Similarly, the very triumph of the “renegade” view al- tions shaped and channeled politically relevant historical lowed for the resurgence of a largely right-wing revisionist debate in postwar Japan. These institutions, which included interpretation of the war. In this revisionist perspective, nei- the Tokyo Trials, a redefined imperial institution, a set of ther a small group of militarists nor the structure of Japan’s international treaties and legal precedents, cultural institu- prewar system is to blame. Indeed, Japan is not to be blamed tions like museums and commemoration rituals, and history at all. At worst, Japan launched a self-defensive war to fend education, helped establish as dominant the “renegade” view off the Western imperialists who threatened Japan’s indepen- of the war, ensuring that view would set the terms of the de- dence in East Asia. And at best, Japan’s war was a noble one, bate and would remain the official view espoused even by aimed not at imperialist conquest but at liberating East Asia prime ministers whose personal inclinations (like Hashimoto from Western domination. This view was fed by the relative and Koizumi) contradict its basic tenets. arbitrariness with which the Tokyo Trials were carried out and by the fact that the emperor’s war responsibility was never admitted. Revisionists reasoned that if the emperor himself was blameless, and if the Trials unfairly singled out only a

Harvard Asia Quarterly Spring 2002 9 handful of defendants, then is anyone really to blame? For structure. For if the very structure of prewar institutions led revisionists, then, postwar institutions revealed not the guilt inevitably to war, then the continuity of many of those insti- of a small group of militarists but the vengeance imposed on tutions into postwar Japan signals the need for far-reaching Japan by the victorious Americans. After the establishment (even revolutionary) institutional and structural change. On of the “renegade” view as official orthodoxy in postwar Ja- the other hand, if the revisionist view that Japan is not to pan, this revisionist view posed a constant challenge, both blame triumphs, then what changes were instituted during through interest groups like the JBFA and by politicians who the occupation and after are illegitimate. If Japan was not at questioned the “victor’s justice” imposed by the Americans fault in the war, then what is the need for a new constitution, in the Tokyo Trials.13 for a redefinition of the emperor’s political role, for a prohi- bition on war and the maintenance of armed forces, and for Revisionist Interest Groups other changes that were instituted in the postwar era? The Tokyo Trials and the occupation itself thus seem merely the Partly because such alternative views prospered under vengeance imposed on Japan by the victorious Americans, the dominance of the “renegade” view, interest groups who not the noble efforts to “demilitarize” and “democratize” sought to influence the debate also emerged. Foremost among Japan so its government could be returned to the people (from such groups is the JBFA. This group, founded in 1947 to the militarists who had usurped authority). fight for the restoration of military pensions and condolence It should be no surprise, then, that most prominent poli- payments cut off by the occupation authorities, later (espe- ticians and opinion leaders remain disturbingly ambiguous cially under the leadership of convicted war criminal, later about historical views of the war. Even those (as Hashimoto cabinet minister, and conservative power-broker Kaya and Koizumi, above) who express strong views before reach- Okinori) moved toward and ultimately embraced a revision- ing the highest positions find themselves retreating into am- ist agenda. The group built a formidable support base and biguity when faced with the potential political and institu- grew in political clout through its provision of financing to tional consequences of taking a stronger stand. The very in- cooperative politicians and its ability to deliver blocks of stitutions on which they depend to preserve the postwar sys- votes. Partly because of the political influence of the JBFA, tem rely on a view of history that places the blame on the the Japanese government has given “Japanese victims” of shoulders of those already punished and executed. To adhere the war a package of benefits exceeding 40 trillion yen.14 In to less ambiguous views is to question the institutional frame- 1995, when the Murayama government proclaimed its inten- work and to acknowledge the revolutionary or reactionary tion to pass an apology resolution through the Diet, the JBFA demands of those who hold stronger views. joined with other like-minded groups in pressuring Diet mem- In contradiction to “conventional wisdom” in the West- bers to mobilize against the resolution. The “National Com- ern media, then, the inability of Japanese leaders to present a mittee” set up by the JBFA threatened to withdraw electoral united face in apologizing for past aggression does not re- support from conservative politicians who supported (or even flect the notion that war responsibility has never been ad- refused to oppose) the resolution. As a result, the resolution dressed in Japan. Neither does it reflect the notion that Japan actually passed not only avoided apology, it also implicitly is a nation of right-wing revisionists and closet militarists. blamed the Western powers for the outbreak of war. Even While Japan has its share of revisionists, most Japanese re- then, a large number of Diet members boycotted the vote ject that view. Rather, the very plurality of views, coupled rather than be associated with the resolution. The JBFA thus with the close tie between historical interpretation and po- played an important role in mobilizing opposition to the apol- litical institutions, is one reason why the issue is so difficult ogy resolution – to the point that the final resolution pleased to resolve. While the “renegade” view has characterized the no one (including Murayama, and the Chinese and Koreans official government line, the government has rarely if ever who had been the intended audience). This powerful revi- spoken with a united voice. Even when the cabinet has united sionist interest group has proven its ability to influence po- behind a single statement or point of view, other prominent litical discourse on the war.15 Other groups remain similarly politicians or opinion leaders have betrayed that unity. The active – as evidenced by the role played by the nationalist issue is too closely tied to hotly contested political and ideo- Shinto organization Sodaikai, one of whose members is logical issues to be resolved in an easy and straightforward former LDP secretary general Koga Makoto – in persuading manner. Prime Minister Koizumi not to abandon his earlier pledge to visit Yasukuni Shrine.16 Japanese Sense of Victimhood

The Politicization of the Past Finally, another consequence of the dominance of the “renegade” view has been the emergence and prevalence of The close tie between postwar institutions and the “ren- a sense of “victimhood” in postwar Japan. The one issue on egade” view of history, coupled with the vigorous challenges which all – progressives, revisionists, and proponents of the to that view, ensured that history would remain a highly con- “renegade “ view alike – agree is that the atomic bombings tested political issue in postwar Japan. To question the “ren- of Japan were evil and should never be repeated. The one egade” view is also to question the institutions that estab- commemoration in which all Japanese share, regardless of lished and maintain (and are partly legitimized by) that view. the specific view of the war, is that of the atomic bombings. For example, to adopt a “structuralist” view of the war is As a result, virtually all Japanese share at least some sense of also to question the legitimacy of the postwar institutional Japanese victimhood that is inextricably intertwined with such

Harvard Asia Quarterly 10 Spring 2002 commemoration. Moreover, this sense of victimhood reso- ENDNOTES nates powerfully with many older Japanese whose actual 1 experiences of genuine suffering are much more vivid than For Koizumi’s statements and accounts of his actions, see the evening edition of Mainichi Shinbun, August 15, 2001; and Japan Times, August the obscured accounts of suffering inflicted by Japanese. 16, 2001. Perhaps the clearest indication of the power of this sense of 2 Hashimoto Ryutaro, Seiken Dakkai Ron (Tokyo: Kodansha, 1994), 98- victimhood is the fact that official government compensa- 100. 3 tion to those classified as Japanese victims of the war out- For newspaper accounts of Hashimoto’s Yasukuni visit and his August 15 statements, see the dailies, Asahi Shinbun and Japan Times, July 30 strips that extended to foreign victims on a scale of roughly and August 16, 1996. 40 to 1.17 This sense of victimhood is another powerful con- 4 I thank Lou Perez for suggesting the term “renegade” as a way to charac- straint on any political leader who may seek to issue a more terize this general view of the war. 5 strongly worded or internationally acceptable apology or of- In this sentence I place quotation marks around the word “official” to indicate that the “renegade” view is that espoused in public and in official fer of compensation. documents by the Japanese government. It is reflected in the statements and actions of virtually all postwar prime ministers (while they are in of- FINAL REFLECTIONS fice), and it is the view expressed by the Ministry of Foreign Affairs (MOFA). However, as my analysis below is intended to make clear, this view has never been hegemonic even among top-level politicians. When the prime In summary, a specific set of institutions established in minister or MOFA proclaim the “renegade” view, cabinet-level politicians Japan after 1945 explains the continuing importance of the issue statements or engage in behavior that reflect fundamentally different memory of World War II in Japanese domestic politics and views of the war. Thus, while the “renegade” view is embodied in govern- foreign relations. These institutions, which included the To- ment policies and official statements, the government (broadly defined) has never spoken with a united voice on the issue. I do not repeat my usage kyo War Crimes Trials, the redefined position of the emperor, of quotation marks in the rest of this article, but readers should take note of international treaties, cultural institutions of commemoration, the fundamentally contested and ambiguous nature of “official history.” and history education, established the “renegade” view as 6 For a more complete treatment, see John Dower, Embracing Defeat (New the official story of the war and bounded subsequent politi- York: Norton, 1999), especially 277-301. 7 For relevant figures, see Howard B. Shonberger, Aftermath of War (Kent, cal discourse on the war. Moreover, this institutional frame- OH: The Kent State University Press, 1989), 61. work had a number of perhaps unintended but very impor- 8 See Takashi Fujitani, “Electronic Pageantry and Japan’s ‘Symbolic Em- tant consequences, including the emergence of alternative peror,’” in Journal of Asian Studies 51:4 (November 1992): 824-50. 9 views to contest official orthodoxy, the rise of powerful in- For one statement of this position in English, see Umezu Itaru’s opinion piece in Far Eastern Economic Review (August 10, 2000). terest groups to place further constraints on debate, the 10 See Arai Shin’ichi, SensoHakubutsukan (Tokyo: Iwanami Booklets, politicization of the past, and a widespread conception of 1995). The new museums include Osaka International Peace Center and Japanese victimhood. Each of these consequences has in turn Ritsumeikan University International Peace Museum. See Sorano Yoshihiro, contributed to the persistent salience of this issue in Japa- “Piisu Osaka o Meguru Kibo,” in Kikan Senso Sekinin Kenkyu 29 (Au- tumn 2000): 52-5. nese politics and to the apparent difficulty of reconciling his- 11 On the events surrounding the resolution’s passage, see Ryuji Mukae, torical views in Japan’s relations with its former enemies. “Japan’s Diet Resolution on World War Two,” in Asian Survey 36:10 (Oc- Thus, even when seemingly committed revisionists like tober 1996): 1019. 12 Hashimoto Ryutaro ascend to Japan’s highest positions of For an overview of Ienaga’s three lawsuits and the mixed verdicts that resulted, see Nozaki Yoshiko and Inokuchi Hiromitsu, “Japanese Educa- power, they retreat into the ambiguity and institutional safety tion, Nationalism, and Ienaga Saburo’s Textbook Lawsuits,” in Censoring of the “renegade” view established as official orthodoxy. And History: Citizenship and Memory in Japan, Germany, and the United States, even when seemingly committed reformers like Koizumi ed. by Laura Hein and Mark Selden (Armonk, NY: M.E. Sharpe, 2000): Junichiro promise both far-reaching institutional change and 96-126. 13 Prominent politicians who have expressed revisionist views include a shift in the politics of apology, they most often backtrack Hatoyama Ichiro, Kishi Nobusuke, Shigemitsu Mamoru, Nakasone into the same rhetorical and symbolic territory inhabited by Yasuhiro, Okuno Seisuke, Nagano Shigeto, Mori Yoshiro, and, as discussed less ambitious predecessors. Moreover, my analysis suggests above, Hashimoto Ryutaro. 14 that this issue will likely remain difficult to resolve in the On the JBFA’s political clout, see Tanaka Nobumasa, Tanaka Hiroshi, and Hata Nagami, Izoku to Sengo (Tokyo: Iwanami Shinsho, 1995), 194- foreseeable future, because this issue is so closely intertwined 204. with the postwar institutional framework. Fundamental insti- 15 Interestingly, while revisionist interest groups have been the most promi- tutional change must accompany transformation in the ponent and active throughout the postwar period, the last 10-15 years have litical discourse on war responsibility. A resolution to this seen the emergence of progressive interest groups who challenge both the “renegade” view and revisionist groups like the JBFA. Such groups in- issue, in other words, is not just a matter of a Japanese leader clude the Center for Research and Documentation on Japan’s War Respon- finally stepping forward and issuing the apology that has long sibility, the Network for Postwar Compensation and the various groups been desired by many both inside and outside of Japan.18 organized to press the case of the so-called “Comfort Women” forced to be Rather, a reassessment of the official Japanese position on sex slaves for Japanese troops. 16 Yomiuri Shinbun, August 17, 2001. the war necessarily involves a fundamental reassessment of 17 See Tanaka Hiroshi, “Why Is Asia Demanding Postwar Compensation institutions as basic as the postwar constitution. And this, in Now?” in Hitotsubashi Journal of Social Studies 28 (1996): 11-12. For turn, points to a fundamental reassessment of postwar poli- more on the “sense of victimhood,” see James J. Orr, The Victim as Hero: tics, social and economic structures, and national identity. Ideologies of Peace and National Identity in Postwar Japan (Honolulu: University of Hawaii Press, 2001). The obstacles that lie in the way of such reassessment, while 18 Such calls for apologies appear often in the press in China, the two not insurmountable, are formidable. Koreas, the United States, and elsewhere. For just one US example, see George Gedda, “Why Won’t Japan Acknowledge Its Past,” Associated Press, August 15, 2001.

Harvard Asia Quarterly Spring 2002 11 INTERVIEW WITH EZRA VOGEL CHINA-JAPAN RELATIONS

BY ILYA GARGER HAQ: You are unusual among American East Asia specialists in that you have worked on both Japan and China. How did you come to study both countries? Ezra F. Vogel is Henry Ford II Research Professor in the Social Sciences at Harvard University, Vogel: My Ph.D. actually had nothing to do with Asia – it was on Ameri- where he taught from 1967-2000. From 1993-1995 he served as National Intelligence Officer for East can society and family and mental health. One of my teachers suggested Asia in Washington DC. Vogel is the author of that after my Ph.D. I do something comparative so that I’d have some Japan’s New Middle Class (1963), Canton Under perspective on the United States. Another one of my teachers had worked Communism (1969), Japan as Number One (1979), in Japan and he suggested I go there. So that’s how I got to Japan. When The Four Little Dragons (1991) and a number of other books on China and Japan. He received his I came back, my first teaching job was at Yale, and we were working on Ph.D. from Harvard in 1958. the sociology of mental health. While I was at Yale I came back up to visit Harvard, and one of my former teachers said, “How would you like to work on China?” I’d never thought about working on China before, but I had realized by the time I left Japan that I was more interested in studying East Asia than the United States. I decided to accept the opportunity for training as a postdoc on China. Harvard at the time was trying to develop studies of Asia and particularly of communist China, so they re-trained me on China. My earlier work on both countries was on domestic issues, since I was trained as a sociologist. For many years I was interested in Chinese society and Japanese society rather than in Sino-Japanese relations. Since there weren’t many people who had worked on both societies and since I had many acquaintances in both places, naturally when I went to one country they asked me about the other. And since there weren’t many Americans working on Sino-Japanese relations, I was drawn into discussions of the topic. I also was very interested in the comparisons and relations between the two countries. Because they’d had so many problems stemming from World War II, I think that Americans like me, who know both countries and have good friends in both places, can play a role in helping them to work together on the difficult historical issues. If they sit down together it’s easy to argue, but if there’s a third party it’s easier to have a serious discussion. It helps remove the tension between the two parties. Once I got into it, I found plenty of demand – it was a niche that nobody else was filling.

HAQ: In the postwar period here has been a fair amount of cooperation between Japan and China, especially in terms of trade. However, the relationship has many deep problems, largely related to Japan’s history of aggression towards China. In the context of contemporary China and Ja- pan, how would you define “good” and “bad” relations?

Vogel: “Good” doesn’t necessarily mean they have to love each other. But they have to work together effectively enough to resolve the problems that naturally confront them, without the emotional baggage that can make it very difficult. “Bad” is when the negative feelings are so strong that they interfere with constructive resolution of concrete problems. Now, with closer relations, and with the economies and information being so closely linked, China and Japan really need to work together on many issues.

Harvard Asia Quarterly 12 Spring 2002 HAQ: What are the main issues at stake in the Sino-Japa- and 1940s was heavily dependent on anti-Japanese propa- nese relationship? ganda. In the 1990s, anti-Japanese propaganda has been re- vived in China. The Japanese are quite aware of this and they Vogel: One of the greatest priorities is creating an environ- respond in a sensitive way when they meet Chinese. In the ment in which both sides can feel secure without an arms 1950s and 1960s the natural way for Japanese going to China race. China’s growing military strength is alarming to some was to apologize – they felt bad about what they had done in in Japan, and on the other hand some in China continue to China. But when China got stronger and began putting these see Japan as a potential military threat. There are also diffi- issues in a more forceful way – and also when the Japanese cult regional security issues, like North Korea and the status found that at times China used these issues to achieve con- of Taiwan, whose peaceful resolution will require the coop- crete goals like getting more financial help from Japan or eration of China and Japan. Managing trade relations is an- getting support for countries in Asia to unite with China other important issue, especially as economic ties continue against Japan – this added to the tension over the issue. Of to grow. They will have to work together on a wide range of course the Chinese do have genuine anger, but just as most regional and global issues. Japanese who are alive today can’t be held responsible for World War II, so there’s only a small proportion of Chinese HAQ: In February 2001, Japan’s im- now who can actually remember what position of a tariff on certain Chinese went on. Of course, some memories agricultural products set off a trade of Chinese about Japan are passed dispute between the two countries. You don’t find many Japanese down in families. China retaliated with punitive tariffs today who feel that they are on Japanese electronics and automo- responsible, so it doesn’t make HAQ: A Tokyo University law pro- biles, and threatened further action if any sense to push them to pay fessor recently spoke at Harvard about Japan did not repeal its tariffs. Do you for what militarists imposed on the need for Japan to apologize to and think this was a sign of things to come their parents. compensate its wartime victims be- in Sino-Japanese relations? yond the requirements of the treaties that ended the war, which were actu- Vogel: That kind of thing happens with all countries that trade. ally very lenient towards Japan. What are your thoughts on I don’t think it’s unique and I don’t think we’ve seen the end this issue? of it. As trade with China grows and more Japanese industries move production facilities offshore, it affects a lot of Vogel: I have a different view on the compensation question. people’s lives in Japan. That will be a continuing problem, It’s now 57 years after the war and there’s no end to the ques- and I expect it will probably get worse because industries tion of compensation and apology. Should America compen- and their political protectors in Japan will be affected. The sate American Indians and black people for the way we treated trade balance between Japan and China will also get worse them? Many countries did a lot of horrible things to other from Japan’s point of view, and there will be ongoing fric- countries around the world. There would be no end if we tion on that issue. push compensation. Societies would be polarized. We can do things to help those who suffered have better lives. HAQ: The Japanese tariff was due to pressure from the po- The Chinese government officially agreed not to ask for litically powerful agricultural sector, and the Chinese re- compensation. Of course, lawyers stand to greatly benefit sponse was also due in part to the government’s need to ap- from these cases, and lawyers have been very much at the pear tough toward Japan. Will it be difficult to isolate trade center of the efforts to get more compensation. There are relations from domestic pressures, and will domestic pres- certain people – certain women in Korea, or certain people sure be a source of tension in bilateral relations? in China – who think that they can win big court cases. But I think it’s questionable whether they are the ones who suf- Vogel: All democratic countries have public pressures. Ja- fered most. I think the way to deal with the issue is not by pan is going through difficult readjustments and I don’t ex- more compensation or apology, but by being very open and pect that process to end soon. I expect this adjustment to direct about looking into and acknowledging what happened, aggravate the political pressures, and those pressures will and being very firm and convincing that the Japanese are continue to be very important in relations with China. On the determined not to let history repeat itself. And by assisting Chinese side, while political pressure doesn’t work quite the the people directly or indirectly affected build better lives. same as in democracies, public emotions toward Japan are Also, most people in Japan feel that the war was imposed on quite strong and will affect relations. them by the military. You don’t find many Japanese today who feel that they are responsible, so it doesn’t make any HAQ: There is a great deal of popular animosity towards sense to push them to pay for what militarists imposed on Japan in China. Do the Japanese have a realistic idea of how their parents. But I think that the Japanese should be open they are perceived? and honest about what happened, and teach their children about what happened. Getting hung up on apologies isn’t the Vogel: Yes, they do. I believe many Chinese have been in- right way to deal with this problem. fluenced by propaganda and education. The ability of the Communist party to rally people to their cause in the 1930s HAQ: Do you think that Japan is headed in a direction where

Harvard Asia Quarterly Spring 2002 13 it will be able to speak openly and convincingly about its starting to emerge, and the emphasis on defeat and humilia- wartime history, or are there institutional and psychological tion and the horrors of colonialism is giving way to a self- barriers to dealing with the issue? confidence among some Chinese that they will be a strong country again. It’s my hope that the base of pride can be in Vogel: Unfortunately, I don’t see signs that this problem is their successes, not their humiliation. Just to mention three going to go away. One of the barriers in Japan is the right things that happened last year – one of course is the entry wing, which is very intimidating to a lot of Japanese who into the WTO, which was a great success; another is getting would like to deal with these issues openly and frankly. But to host 2008 Summer Olympics; and their holding the APEC there is considerable support among certain limited groups meeting in Shanghai last October and allowing foreign lead- for trying to whitewash all the sins of World War II. I haven’t ers to see how rapid the growth has been there. So I think done a careful analysis of the social that all these things give some hope base of those people – probably a lot that China can have a positive base for of them are not the most successful unity and will not need to use the anti- people in the society, and many are In China, the narrative of Japanese card so much in the future. probably people who have a lot of rela- humiliation has been very tives who died or suffered in the war. powerful, but I think that is HAQ: Do you think that the autocratic Most Japanese do know that Japan beginning to change. nature of the PRC regime is an ob- caused horrible suffering in World War stacle to relations with Japan? Would II. Historical issues are very compli- the peaceful demise of the Chinese cated to deal with. China has not fully dealt with the injuries Communist Party be a good thing for Sino-Japanese rela- and deaths in the Cultural Revolution that ended 25 years tions? ago. Vogel: I don’t think so. When Korea concluded its pact with HAQ: Given the political value of the issue in China, is the Japan in 1965, it was against popular anti-Japanese senti- Chinese government in a position to accept a Japanese apol- ment. If anything, the leaders of the PRC in the 1980s – es- ogy? What are the obstacles on the Chinese side to a resolu- pecially Zhao Ziyang and Hu Yaobang, who had a responsi- tion of the history problem? bility for economic growth and wanted technology investment, peace and stability in the region – had the ability to act Vogel: Dealing with historical issues requires efforts on both in the national interest to attract Japanese investment despite sides, and the Chinese and Koreans have not done a good popular anti-Japanese feelings. Nationalism doesn’t go away job in talking about the developments in Japan after World with democracy, and democracy can even heighten patriotic War II. Some Chinese leaders still use anti-Japanese issues feelings. The Communist Party, in my view, has now become as a rallying point for national unity. Mao Zedong said that an elite with superior education that feels a responsibility for the Communists have to thank the Japanese for making it the nation as a whole. If they continue to believe – as Deng possible to have the revolutionary movement, and certainly did in 1978 – that they need a peaceful environment for eco- for the Communist victory. nomic growth, and that economic growth is the main prior- Still, it’s paradoxical to me that in a lot of the places ity, then if anything the nature of the regime is more helpful where you’d think anti-Japanese feeling would be strongest than harmful to improvement of relations with Japan. there are many people willing to work with the Japanese – particularly in the northeast and in Shanghai. You do find a HAQ: Since the late 1970s, China has been a top recipient lot of anti-Japanese feeling, but you also find people who of Japanese economic aid – partly due to the belief that Ja- learned Japanese, both during the Japanese occupation and pan stands to gain from a stronger, more stable China. On afterwards. A high proportion of China’s Japan specialists the other hand, some in Japan have criticized the aid, point- come from the northeast or Shanghai. Dalian is the city that ing out that China has repaid generosity with criticism. Skep- perhaps Japanese feel the most comfortable in even though it tics also argue that while Japan pours aid into China, the was part of Japan’s Manchurian Empire. And there are a lot Chinese government is spending money on a military buildup of Japanese in Shanghai. There’s a new book by Rana Mitter which could threaten Japan. What is your opinion on this called The Manchurian Myth, which argues that in addition issue? to those who resisted the Japanese, there were a lot of col- laborators. The dominant narrative in China is that of the Vogel: I think 1998 was kind of a turning point when Prime patriotic Chinese fighting the Japanese, but in fact at the grass Minister Obuchi, in response to Jiang Zemin’s comments roots level there were many who actually worked with them, when visiting Japan, said that Japan wasn’t going to give and lived with them. That is an issue that has not been fully China a written apology. I believe his decision reflected an dealt with in China. accumulation of Japanese frustrations, and the mood in Ja- I think the propaganda department in China finds the pan that “we’ve been apologizing too much, we’ve been bend- anti-Japanese sentiment convenient to use. And as some Japa- ing down too low and it’s time to stand up.” This mood has nese have noted, when China is negotiating a loan or aid, the been fairly strong in Japan since 1998. It’s also aggravated issue often seems to be used as a pressure point. In China, by the Japanese economic difficulties and by the Chinese the narrative of humiliation has been very powerful, but I economic boom. The Japanese feel they should be giving to think that is beginning to change. A more confident China is poor countries to help them get over their poverty in early

Harvard Asia Quarterly 14 Spring 2002 stages of development, but when China is booming then a lot power. This became particularly true when the Japanese be- of people begin to question the need for aid. Japan will cut gan talking not only about the security of Japan but also in down on aid to China. But the bureaucrats will probably try the “vicinity”, and when they began sending PKO (United to control the process, so that it’s not so sudden that it de- Nations Peace Keeping Operations) troops abroad. It was stroys projects or gets people too upset. not unnatural for the Chinese – whose closest contact with Japan had come in World War II – to worry that Japan was HAQ: Some have argued that generational change, especially again becoming militaristic, and to say that Americans had among leaders, will alter relations between Japan and China. short memories and didn’t really understand the Japanese. Do you think this will be an important factor? So there’s been a growing concern in recent years in China that the US-Japan Security Treaty contributes to Japan gain- Vogel: I feel that the impact of gen- ing military technology that is not in erational change has sometimes been Chinese interests. Particularly after the exaggerated. It’s true that younger 1996 near-confrontation between people are richer and use more mobile There’s been a growing concern China and the United States over Tai- phones, but Japan is a country where in China that the US-Japan wan, there was concern that the US- mass culture is so widespread and the Security Treaty contributes to Japan Security Treaty might be used mass media has such influence on pub- Japan gaining military to prevent Taiwan from returning to lic opinion that it’s not just the young technology that is not in Chinese the mainland. China is really quite con- people who change. I’ve been im- interests. cerned about this now, and there’s a pressed by how much older people lot of debate on the role of the treaty, change. So I think that time change is and whether the US-Japan treaty will more important than generational change. be used to balance China. But in terms of generations of politicians, there is some truth to the concept of generational change. In the early de- HAQ: On the Japanese domestic political side, do you think cades after World War II, Japan was led by the “Yoshida that Japan’s continuing subservience under the Security school” – people who were formerly bureaucrats and very Treaty might have the effect of giving legitimacy to those sophisticated, such as Kishi, Ikeda, Sato and then Fukuda, calling for Japan to break away from America’s military in- Ohira and Nakasone. All those people were very poised and fluence entirely? had a grand vision. The politicians who came later had to spend so much time preparing for local elections, attending Vogel: There are three fundamental choices for Japan. One weddings and funerals, and dealing with factional infighting is unilateral disarmament, where Japan becomes a neutral that they didn’t have the kind of distance from petty issues unarmed country. Another is the US-Japan Security Treaty. that it takes to become real leaders. Some of the talented The third is for Japan to develop an independent military. young politicians get so weighed down in politics that they The first and third alternatives, when you examine them very may not have the opportunity to develop their best talents, to deeply, are extremely unwise. To leave yourself as a weak keep thinking about the big picture and to stand apart from country, subject to the intimidation of any country around the daily battles. There are quite a few in that generation who you, would not be sustainable for long. The idea of develop- have had more training abroad and speak English, and that’s ing an independent military – when the United States has so quite different from the current generation of leaders. But much technology to offer, when the Japanese economy is in they need more time to focus on big issues and more support trouble, and the dangers of a Japan-China arms race are so so that they can be effective. great – does not make sense. Even if the right-wing Tokyo governor Ishihara Shintaro came to power, where would he HAQ: What is the effect of the US-Japan Security Treaty get the money to have a really independent military? It just with respect to the Sino-Japanese relationship? Does it isn’t going to happen. strengthen the relationship, or create tensions? HAQ: Aside from the Security Treaty, what do you see as Vogel: When Nixon and Kissinger came to China, they per- the role of the US with regard to Sino-Japanese relations? suaded the Chinese that the US-Japan treaty contributes to Do you see any conflicts between US interests in the region stability in the region and is good for the Chinese as well. and mutual Chinese and Japanese interests? The more cynical way of saying this is that it’s “the cork in the bottle” – the treaty keeps the Japanese from becoming Vogel: It is conceivable that in a few years, if there’s a strong militaristic again. I don’t think that’s an accurate statement China, Japan will feel caught between the United States and of the treaty’s function. Japanese are not itching to become China. If there is a standoff between the United States and militaristic. I believe the treaty provides many benefits to China, or a lot of tension in the US-China relationship, then Japan. It can achieve security without the need to greatly ex- Japan will have to make difficult choices. China would cer- pand its military. tainly exert a lot of pressure. The Japanese want to avoid However, beginning in the early 1990s there was more such a close embrace with the United States that they don’t concern on the Chinese side that the Japanese might be using have some flexibility in working with China. If I had to specu- their relationship with the United States to get new weap- late on 2045 (a century after the end of World War II) I’d say onry, as part of a plan to become an independent military that Japan may be equidistant from China and the United

Harvard Asia Quarterly Spring 2002 15 States, or even a little closer to China. Japan has to live with China and Japan are beginning. Thoughtful, responsible, cos- China. It’s very close geographically, and trade between Ja- mopolitan leaders on both sides realize they need to work pan and China is likely to be greater than with the United together, and there may be more accommodations than you States. But the idea of being allied with the United States, in would guess from the rhetoric. There are quiet diplomats and case China should turn out to be a problem, is also very ap- business people in both systems who realize they need to pealing to Japan. Japan does not want to be completely de- work together. I wouldn’t rule out the possibility that there pendent on China, but there’s more caution about alienating could be some real improvement in relations despite all the China than a lot of people in Washington would like to think. troubles.

HAQ: Japan has tried to approach the issue of East Asian regional security through multilateral institutions. In developing and strengthening the Sino-Japanese relationship, how important are multilateral as opposed to bilateral mechanisms?

Vogel: Multilateral institutions in Asia cannot have the level of interoperability and close communication in the near future that’s required to respond effectively to security threats. Even Europe had to work very hard to develop NATO. The Japanese know that ASEAN+3 cannot be a real security alliance. Japan would like to expand multilateral discussions to reduce the risk of conflict and create a better environment all around, but in the near future multilateral relations cannot offer much more. Some people have suggested that Korea- US-Japan relations might become a regional force, but per- sonally I think that’s very dangerous because it would an- tagonize China. Korea would probably not want to lean that heavily toward the United States against China either. So I don’t think that meaningful security cooperation on a multilateral basis is really possible in the next decade or two. But we should move beyond bilateral alliances to increase cooperation with China to preserve regional stability.

HAQ: What do you see as the best-case scenario and the worst-case scenario for Sino-Japanese relations?

Vogel: The best-case scenario would be that some Chinese leaders who are quite confident will behave somewhat like Kim Dae-Jung in saying to the Japanese, let’s think about the future and work together. And that some Japanese leaders will be strong enough to push ahead on getting textbooks to deal fully and frankly with World War II issues. And that scholars and other specialists from China and Japan would begin to work together on those issues, and there would be an openness that would start the same kind of process as in Germany and France in the 1950s. Pessimistic scenarios would be tension over issues like Taiwan or the Korean peninsula. Also, particularly if the US- Japan Alliance is not very firm, arms competition between China and Japan could grow. To me, an arms race, with some skirmishes along the edges, would be the worst kind of scenario.

HAQ: Finally, what kind of prospects do you see for the near future?

Vogel: At the moment I’m working on trying to get histori- ans from China and Japan to look at World War II together. This could help provide the basis for political leaders in the two countries to work on healing. Security talks between

Harvard Asia Quarterly 16 Spring 2002 DYNAMICS OF SINO-US RELATIONS THE PERSPECTIVE FROM BEIJING

BY WILLY WO-LAP LAM uperficially, nothing too exciting was accomplished at the Febru- ary summit between Presidents George W. Bush and Jiang Zemin in Beijing. On a number of issues, including Taiwan as well as reli- Willy Wo-Lap Lam is Senior China Analyst for the S gious and civil freedoms, both sides merely agreed to disagree. Jiang, Asia-Pacific Bureau of CNN. From 1989 to 2000 he was China Editor for the South China Morning who had earlier characterized relations with the US as a “constructive, Post in Hong Kong. He is the author of several cooperative relationship,” said at his joint press conference with Bush books, including China after Deng Xiaoping: The that he was happy they were able to “seek common ground while shelving Power Struggle in Beijing since Tiananmen (J. differences.” Bush said on the same occasion, “we believe that we can Wiley & Sons, 1995) and The Era of Jiang Zemin (Prentice Hall, 1999). Lam is currently writing a discuss our differences with mutual understanding and respect.” book on Hu Jintao and the Fourth Generation The American leader also called bilateral ties “mature and respect- Leadership in China. ful,” an assessment with which the Jiang leadership fully concurred. At least from the Chinese perspective, however, Jiang and Bush did more than to the merely agree to disagree. At the summit, the two presidents committed both governments to regular high-level exchanges on issues ranging from human rights to arms non-proliferation. Moreover, joint commissions on economics, commerce and trade as well as science and technology were established, with their first meetings to be held in the coming year. Nevertheless, Jiang, who is Beijing’s highest foreign policy-maker, realizes that the new “constructive, cooperative relationship” with the US is a few rungs down the diplomatic ladder from the “constructive, strategic partnership” that he had agreed to forge with former president Bill Clinton in 1998. The idea of “strategic partnership” had meant not only that Washington would abandon what Beijing perceived to be an “anti- China containment policy,” but also would be willing to work on thorny issues such as Taiwan. The Clinton administration’s flexibility on Taiwan was evident when the former president enunciated the “Three Nos policy” (no to Taiwan independence; no to one China, one Taiwan; and no to Taiwan joining international bodies whose admission criteria include statehood) during a visit to Shanghai in 1998. Beijing was alarmed when Bush labeled the US and China “strategic competitors” during his election campaign in 2000. Jiang and his advisers feared that Bush, along with “China-bashing hawks” in the Pentagon and the US Congress, were about to revive the Cold War agenda of encircling China and thwarting its development into a great power. Thus, Bush’s new-found willingness to engage in a dialogue with Beijing – albeit on the somewhat minimalist premise of focusing on common interests and temporarily setting aside differences – represented significant progress, despite the fact that it took September 11 for the Bush administration to realize the importance of maintaining a hotline to the Beijing leadership.1 At stake are the growing economic ties between the two nations – bilateral trade was more than $80 billion in 2001, a jump of 32 times since 1978 – as well as shared interests in maintaining peace and stability in the Asia-Pacific Region.2 Bush hopes that Beijing will continue its policy of acquiescence in, if not full-fledged support for, America’s anti-terrorism campaign in Central Asia and other hot spots. On the other hand, Jiang expects Washington to help rein in the pro-independence gambit of Tai- wan President Chen Shui-bian. While it is likely that Beijing will maintain its largely conciliatory policy toward the US in the foreseeable future, it is prudent to presume

Harvard Asia Quarterly Spring 2002 17 that such a policy will undergo significant mutations later Beijing also adopted a generally cooperative attitude this decade. Beijing will witness a changing of the guard at toward the American war on terrorism. While the CCP lead- the Chinese Communist Party’s (CCP) 16th Congress this ership had consistently opposed efforts in the past by coun- autumn. Moreover, the country is undergoing unprecedented tries and blocs, including the US and NATO, to “interfere in socio-economic changes after its accession to the World Trade the domestic affairs” of other countries, it opted for a policy Organization (WTO), and such changes will necessarily im- of acquiescence toward the US-led coalition’s incursion into pact foreign policy. Afghanistan. Equally significantly, officials and the state media did not play up the potential threat to China posed by THE UNDERPINNINGS OF BEIJING’S CONCILIATORY US POLICY the much-enhanced US presence in Central Asian countries such as Uzbekistan and Tajikistan, In an internal session to prepare despite the perception among civilian for Bush’s February visit, Jiang reit- and military strategists that the quasi- erated Beijing’s generally placatory The Jiang administration has permanent stationing of US troops policy toward Washington: “If nec- maintained a moderate, even close to China’s western borders essary, we can make concessions [to conciliatory stance toward would further promote America’s America] for 20 more years.” The Washington. containment policy. Given China’s President and Communist Party chief plans to import petroleum from or was referring to the late patriarch Deng build pipelines through Central Asian Xiaoping’s instructions that good ties with America were countries, Chinese observers also worried about a threat to essential to China’s economic development in the first de- the country’s “petroleum security.” Furthermore, the Ameri- cades of the new century.3 In the early 1990s, Deng, who can presence in Central Asia will undermine one of Jiang’s was fully in charge of foreign policy, laid down a series of major diplomatic initiatives: setting up the Shanghai Coop- well-known dictums on diplomacy, the best known of which eration Organization mechanism (a grouping of China, Rus- was: “Keep a cool head, maintain a low profile and never sia, Kazakhstan, Tajikistan, Uzbekistan, and Kyrgyzstan) as take the lead.” With particular reference to the US, the late a counterweight to the perceived eastward expansion of paramount leader also instructed: “Boost cooperation and NATO.6 avoid trouble and confrontation.” Then came the alleged bugging of Jiang’s personal jet, Ties between the two countries were jolted soon after the so-called Chinese Air Force One. Although the incident Bush entered the White House. The CCP leadership was was not reported until January 2002, Chinese state security alarmed by a series of “unilateralist,” even “anti-Chinese” personnel had discovered listening devices on board the plane actions by the new Republican administration. They included as early as September 2001. Since the Boeing aircraft had the decision to shift the focus of US military forces from been outfitted by four contractors on US soil, some in China Europe to the Asia-Pacific region; enhanced strategic coop- suspected US government involvement. Nonetheless, Beijing eration with Asian allies such as Japan, South Korea and has kept mum on the incident, if only because more than 20 Australia; the deployment of the national missile defense Chinese army officers responsible for buying the plane and (NMD) system; Bush’s declaration that the US would do guarding it during the outfitting period were arrested for al- “whatever it takes” to defend Taiwan if it is attacked by main- leged corruption.7 And on the eve of Bush’s February visit, land China; and the White House’s decision to sell to Taiwan Beijing showed it was willing to roll out the red carpet by a package of sophisticated weapons that included diesel-fu- releasing Hong Kong resident Li Guangqiang, who was ar- eled submarines.4 Beijing’s military and civilian strategists rested last year for smuggling bibles into Fujian Province. were convinced that Bush was reviving the Cold War agenda Economic arguments have remained paramount in ex- of pursuing an “anti-China containment policy.” planations of Beijing’s forbearance. In a dialogue with the By and large, however, the Jiang administration has faculty and students of Tsinghua University last summer, Pre- maintained a moderate, even conciliatory stance toward mier Zhu Rongji defended the Jiang leadership’s decision to Washington, to the extent that the Chinese President is widely release the EP3 crew with the now-familiar argument that criticized by hard-line army officers and nationalistic pro- China needed access to the US market and investments to fessors and students for pursuing a pro-US policy.5 This was speed up economic development. Moreover, at that juncture, apparent with the so-called EP3 incident of April 1, in which Beijing required Washington’s blessings in areas ranging from a US spy plane was forced to land on Hainan Island after a accession to the WTO to hosting the 2008 Summer Olym- collision with a Chinese jetfighter. A few days before the pics.8 Easter holidays, Jiang agreed to release the EP3 crew de- In recent months, Beijing’s top US experts in the areas tained on Hainan without any apparent concessions from the of defense, diplomacy and foreign trade have been working US. Washington’s view was that because the Chinese pilot on what they call a ratio of relative interdependence. While a who intercepted the spy plane was at fault, the crew should ratio of 50:50 denotes an equal degree of mutual dependence, have been released immediately, and that Beijing had cyni- the figure was 70:30 until the mid-1990s, meaning China cally used the incident to whip up an anti-American frenzy needed the US much more than the US needed China. How- among the public. However, Jiang, who took early action to ever, the experts believe a ratio of around 60:40 better re- prevent college students from holding anti-US demonstra- flects the current stage of mutual economic dependence. The tions, was faulted not only by nationalists but also the gen- change is mainly due to China’s fast-growing economic clout, eral public for being too soft on Washington. and the reliance of American companies such as Boeing and

Harvard Asia Quarterly 18 Spring 2002 Motorola on the China market.9 Beijing is convinced that Xinjiang since late September.12 when the relevant ratio has reached 50:50, it will be easier for the two countries to solve bilateral problems, including THE WILD CARD IN BILATERAL TIES: THE TAIWAN FACTOR Taiwan. Put another way, it will be more difficult for Wash- ington to continue bullying China. Before parity is reached, While from the US perspective, good relations with however, Beijing has to swallow its pride and “seek coop- China hinge on a number of factors including trade, human eration instead of confrontation.” rights, weapons non-proliferation, Taiwan and Tibet, for the The second reason behind Jiang’s conciliatory US policy Chinese one question matters much more than the others: is that in view of the wild gyrations in bilateral relations since Taiwan. Thus, the Taiwan issue will continue to be the wild the June 4, 1989 Tiananmen massa- card in bilateral ties. cre, Beijing is eager to stabilize ties As discussed above, Beijing’s with Washington. Particularly given reaction to the Bush administration’s the Bush administration’s Jiang Zemin remarked that if closeness with Taipei has been largely “unilateralist” foreign policy and its Taiwan is dependent on China moderate. In addition to arms sales perceived coziness with Taipei, the economically, “the Monkey King to Taipei, Washington allowed a num- Jiang administration realizes that the can’t get out of the grip of ber of top Taiwan officials – includ- old goal of a “constructive strategic Buddha Rulai.” ing President Chen and Vice-Presi- partnership” is unrealistic. However, dent Annette Lu – to stop in the US Jiang hopes that the post-September during “transits” to Central and South 11 reality – namely, Washington’s need for Chinese coopera- American countries. In March 2001, Washington permitted tion in the long-term fight against terrorism – might provide Taiwan Defense Minister Tang Yao-ming to attend a defense- a platform for focusing on common interests and setting aside related seminar in Florida – the first time that a Taiwan de- differences.10 fense minister was allowed into the US since the US de-rec- Beijing also hopes that a mechanism of regular consul- ognized Taiwan in 1979. There is little doubt in Beijing’s tation can be established to increase cooperation and iron mind that Bush has gone back on pledges on Taiwan that out differences in areas including economic cooperation, were made by the Clinton administration.13 human rights, terrorism, and arms proliferation. Both sides However, Beijing has refrained from high-decibel reac- first agreed to resume regular meetings on subjects such as tions such as stepping up war games along the coast. Rather, arms proliferation and human rights soon after September it has focused on three strategies. One is to stress that it does 11. Additional momentum on this score was symbolized by not serve American interests to be dragged into a mainland- the setting up an FBI branch in Beijing, which was agreed Taiwan dispute. Beijing has reminded Washington that it has upon during the presidential summit.11 extended a series of olive branches to Taiwan the past year, In return for Beijing’s placatory stance on the anti-ter- including Vice-Premier Qian’s statement in early 2002 that rorism issue and other fronts, Jiang hopes the US will ac- certain categories of Democratic Progressive Party (DPP) commodate Beijing’s concerns about curbing independence members were welcome to visit the mainland. movements within China. Early in the anti-terrorism cam- Second, Beijing has relied on the “business card” to lure paign, a spokesman for the Chinese Foreign Ministry raised more Taiwan investors and professionals to invest, work and a quid pro quo: in return for Beijing’s support for the Ameri- live in the mainland. Beijing’s hope is that if Taiwan becomes can campaign in Afghanistan, Washington should stop inter- even more dependent economically on the mainland, there fering in Chinese actions vis-à-vis Taiwan, Xinjiang and Ti- will be a limit to the extent that the DPP administration can bet. In Chinese documents, anti-Beijing elements in Xinjiang, pursue independence. Beijing’s success in luring even high and to some extent Tibet, are labeled “splittists,” religious tech Taiwan firms to industrial parks in Shanghai and extremists and terrorists. Chinese cadres have insisted in of- Guangdong has been a factor in the reduction of tension across ficial statements that there be no “double standards” on anti- the Taiwan Strait. Some Chinese experts on Taiwan have cited terrorism. This means that the West should not frown on the “Canada analogy” – a reference to the fact that given Beijing’s own crusade against “East Turkestan terrorists” in Canada’s economic dependence on the US, Ottawa has no Xinjiang, who according to the Chinese, have received train- choice but to subsume the country’s foreign and defense policy ing from the Taliban and Al Qaeda. under that of Washington. As Jiang Zemin remarked in one The Bush administration has indicated there would be internal session, if Taiwan is dependent on China economi- no “selling out of Taiwan” despite Washington’s desire to cally, “the Monkey King can’t get out of the grip of [Bud- secure Beijing’s cooperation in the long-term struggle against dha] Rulai.”14 terrorism. In fact, in his Asian tour, Bush repeatedly cited the Third, the PLA has persevered with preparations for the Taiwan Relations Act and Washington’s obligation to defend eventuality of a “military option” against Taiwan. The stock- the island if it is invaded. However, it is apparent that in re- piling of short to medium-range missiles in at least three bases turn for Chinese acquiescence in the US offensives in Cen- in Fujian and Jiangxi Provinces has progressed unabated. The tral Asia, the Bush administration has obliged Beijing to some US and Taiwan media have quoted experts as saying that extent. While the White House has raised a hue and cry over more than 400 such missiles, some on mobile launchers, have “bible smuggler” Li and other religious prisoners, it has been installed in these two coastal provinces. largely remained silent over the more serious case of the de- In the final analysis, however, the Jiang leadership thinks tention of more than 2,000 Uighurs in western and southern that China’s sheer economic might will eventually persuade

Harvard Asia Quarterly Spring 2002 19 Washington that it is in America’s best interest to gravitate development. The new body is composed of leading cadres toward China and gradually “dump” Taiwan. Chinese cadres from the Commission for Science and Technology for Na- have remarked in internal meetings upon the change of atti- tional Defense (a unit of the State Council, or central gov- tude on the part of various European countries concerning ernment), the Chinese Academy of Sciences, and the Chi- China’s human rights record. Because of enhanced trade with nese Academy of Engineering. Since these three units are and investments in China, fewer European countries are will- not within the military establishment, funds that the new or- ing to confront China in the annual meeting of the UN Sub- gan has earmarked for military R&D need not come from the committee on Human Rights held in Geneva every spring.15 PLA budget. At the plenary session of the National People’s Congress in March, Jiang in his capacity as CMC chairman THE MILITARY DIMENSION: FINDING TUPOKOU repeatedly pledged that the state will be unstinting in providing more resources for the PLA’s “high-tech transformation.” It would, of course, be naïve to think that the CCP lead- Given that issues such as the PLA’s arms build-up have been ership will depend merely on the “economic card” to pursue a source of friction between China and the US, the PLA’s diplomatic objectives. Beijing has al- relentless high-tech drive could fur- ways insisted that it has a right to de- ther complicate bilateral ties. velop a military force commensurate with its economic and geopolitical The Jiang leadership thinks that JIANG’S LEGACY: “GREAT POWER clout. The People’s Liberation Army China’s sheer economic might DIPLOMACY” (PLA) has in absolute terms enjoyed will eventually persuade sizeable budget increases since the Washington to “dump” Taiwan. A key reason why Jiang has late 1990s. In 2001, it got a 17.7% pushed what his critics call a “pro-US budget hike over the previous year, policy” is that the core of the Third and this year, the margin of increase is 17.6%.16 The pro- Generation leadership – the group of septuagenarian leaders jected military spending for 2002 – 166 billion yuan (about including Zhu Rongji and Li Peng – hopes that improvement US $20.5 billion) – constitutes more than 1.5% of China’s of ties with the US and the European Union will go down in GDP. While it is substantially lower than the American 5%, history as one of his major legacies. Jiang is due to give up Western PLA experts estimate that actual defense outlays in his position as party general secretary at the 16th CCP Con- China are about three times the published figures. Most of gress this autumn and the post of President in March 2003. the funds for research and development of new weapons, for With retirement just one year away, the 75-year-old stalwart example, come from hidden civilian budgets. is very conscious of his place in the history books – particu- Beijing is basically following tactics that Mao called larly how he will fare when compared with First and Second “walking on two legs” and Deng characterized as “fighting Generation titans, namely Mao Zedong and Deng Xiaoping. with two fists.” Should diplomacy and trade fail, naked might Jiang and his publicists have come to the conclusion that would be a means to pursue objectives in the international the President has broken new ground on diplomacy, espe- and Taiwan arenas. Chinese military sources say Jiang has cially China’s relations with First World countries and group- for a long time instructed his military aides to find ways to ings such as the US and the EU. This “great power diplo- counter American “hegemonism” and unilateralism. “We must macy” – a reference to China’s ability to perform on the world find tupokou [breakthrough points] to check American pre- stage on par with great powers like the US and the EU – will ponderance,” the president said earlier this year. Jiang, who be featured prominently in the Selected Works of Jiang Zemin also serves as Chairman of the Central Military Commission, to be published this year.18 has also asked PLA strategists to find the weak links in the A centerpiece of Jiang-style great power diplomacy will American defense system. be Beijing’s ability to conduct business with the US and other Last December, the Jiang leadership reacted in a sur- powers on an equal footing, which is something that neither prisingly muted fashion to Washington’s decision to unilat- the Mao nor the Deng administration was able to do. More- erally withdraw from the 1972 Anti-Ballistic Missile Treaty over, Jiang hopes to consolidate his reputation as an interna- with Moscow, even though this was a sign that the US is tional statesman with a last visit to the US as Chinese head of determined to develop the NMD soon. Beijing is very aware state in October, just prior to his participation in the APEC that an Asia-based missile defense system that incorporates heads of state meeting in Mexico City. Bush is in a position Japan, South Korea and Taiwan may be used as an effective to make Jiang very happy if he accedes to the Chinese weapon in “containing” China. After all, Taipei has been lob- President’s wish of paying a full-fledged state visit to Wash- bying for the past two years to be included in such an anti- ington. Jiang has also made known to his diplomatic advis- missile framework. How to thwart the NMD is the latest ad- ers that he wants to go to Bush’s ranch in Texas much the dition to the many priority tasks slapped on the PLA for the same way that Russian president Vladimir Putin did last year. period covered by the 10th Five Year Plan (2001 to 2005). It A source close to Jiang’s personal office says the Presi- is believed that the PLA is currently building upon Russian dent also hopes to set up a protocol for diplomatic activities military technology to develop new models of multiple inde- by China’s retired senior officials. “Jiang wants to establish pendently targeted re-entry vehicles (MIRVs), or missiles with some kind of rapport with the Bush family, so that even after multiple warheads.17 stepping down he can still visit the US as a senior states- Beijing also decided earlier this year to set up an inter- man,” the source said. Needless to say, Washington is in a departmental organ to speed up defense-related research and position to extract concessions from Beijing given Jiang’s

Harvard Asia Quarterly 20 Spring 2002 anxiety to go down in history as the CCP leader who mended vice-president has ventured into new areas such as econom- fences with the US. ics and world trade. Hu has also displayed greater initiative in foreign policy. For example, while the bulk of the prepara- THE FUTURE OF BILATERAL TIES: THE HU JINTAO FACTOR tions for his trip to Europe last year, including the speeches, were handled by the Foreign Ministry and LGFA, sources After Bush’s China trip in February, whether and how close to Hu’s personal office said the vice-president’s new Hu Jintao will modify Beijing’s long-standing US policy has think tank on foreign affairs was responsible for planning his become one of the most crucial questions with respect to bi- US tour.20 lateral ties. The 59-year-old leader will in one year’s time The sources close to Hu’s personal office said he could take over from Jiang Zemin as CCP general secretary and for practical and tactical reasons make considerable revisions state President. Not much, however, is known about Hu’s of Jiang’s so-called pro-US policy. Much of Jiang’s concilia- ideas and statecraft, let alone his thinking on foreign policy. tory stance toward the US has to do with the pre-eminence of While Hu was inducted into the elite Politburo Standing the Shanghai Faction – a reference to politicians who have Committee in 1992, the former head close associations with the eastern of the Communist Youth League has metropolis. Moreover, since Deng’s concentrated on party affairs. It is true time, the majority of Politburo mem- that as Vice-President and Vice-Chair- Despite his reputation as a bers are spokesmen for the interests man of the Central Military Commis- lightweight, colorless of coastal provinces and cities includ- sion (CMC), Hu should in theory have apparatchik, Hu Jintao has a keen ing Shanghai and Guangdong, which had some input in foreign and secu- intellect and a desire for reform. are the major beneficiaries of the rity matters. However, Jiang, who is open-door, pro-market and “pro-West CMC Chairman and Head of the CCP policy.” In addition, a good number Leading Group on Foreign Affairs of the children of senior Politburo (LGFA), has studiously kept Hu out of the diplomatic loop. members are either joint venture partners with American com- Like Deng Xiaoping before him, Jiang has jealously guarded panies or senior executives in multinational companies. the portfolio of foreign policy and Taiwan. It was not until This has given rise to accusations by so-called “left- last October that Hu made his first trip to Western Europe. ists,” or remnant Maoists, that three unsavory groups – “pro- While the Bush administration had since then pressed for a US” Politburo members and their children, the rising class US tour for Hu, it was only shortly before Bush’s visit that of private businessmen, and multinational, mostly Ameri- the LGFA approved the trip. It is expected that, like he did in can, firms – have formed an unholy alliance to adulterate Europe, Hu will keep a low profile while visiting the US in the party’s socialist creed and “exploit” the riches of the late April as the guest of Vice-President Dick Cheney. land.21 While not being leftists, Hu and members of the For the first two or three years of Hu’s tenure, it is prob- younger generation of leadership such as Vice-Premier Wen able that he and his Politburo colleagues – who are in their Jiabao are aware of the anti-Shanghai Faction sentiments 50s and 60s – will toe the Jiang line on foreign policy. After among cadres and residents in the hinterland regions. They all, it is likely that Jiang will continue to be a major influence are also conscious of the negative fallout of fast-paced inte- from behind the scenes for some time.19 However, it is also gration with Western economies, such as income level dis- true that despite his ambiguous persona, Hu has ideas of his parities. Much of the opposition to China’s accession to the own and that he is conscious of the need to quickly modify WTO – particularly the concessions that Beijing has made policy to suit China’s fast-changing political landscape. It is to the American and other Western governments – comes reasonable to expect that Hu could, if required, make signifi- from the central and western provinces, which stand to lose cant shifts in foreign policy before his first term as party chief the most from an influx of foreign goods and produce. Hav- ends in 2007. ing served long years in the heartland and western prov- While it is difficult to make predictions about most things inces of Gansu, Guizhou, and Tibet, Hu has a good under- having to do with the CCP and its secretive leaders, several standing of the needs and biases of officials there. points can be made about Hu’s foreign policy, particularly Hu and the new Politburo must also contend with the with regard to the US. First, despite his reputation as a light- rising tide of nationalism. Given the near-obsolescence of weight, colorless apparatchik who owes his meteoric rise to Communism, nationalism is virtually the only card that the an ability to cultivate patrons such as Deng, Hu has a keen CCP leadership can play to promote cohesiveness, and to intellect and a desire for reform. According to a senior West- divert attention from disasters such as massive riots that may ern diplomat who was with Hu for part of his European tour, be caused by worsening unemployment. Sinologist Jean- the vice-president had a good grasp of matters beyond his Pierre Cabestan, who heads the Hong Kong-based French portfolio of party affairs. “Hu surprised us with his thorough Center for Research on Contemporary China, said Hu could understanding of international economics,” the diplomat said. face more pressure from nationalistic, conservative and anti- “At one meeting, Hu was asked about his views of the Japa- American groups in the party, army and society to be tougher nese and Asian economies. He gave a well-rounded assess- with Washington on certain issues. Cabestan indicated that ment of the situation in just ten minutes.” due to his lack of a strong power base, “Hu may be in a weaker Since early 2001, Hu has put together several think tanks position than Jiang to thwart pressures” from such groups.22 to help him formulate policies on areas including the economy, Nationalistic and anti-US sentiments have manifested political reform, and foreign affairs. Since late last year, the themselves the past year in thinly veiled attacks on Jiang

Harvard Asia Quarterly Spring 2002 21 and his “weak and soft US policy.” Jiang has been taken to bal climate. Partly because of Tang’s visit to the US, Jiang task by nationalistic intellectuals and army generals over a called upon the PLA to “make solid preparations for military range of developments including his failure to check Bush’s struggle” in the course of national reunification. Diplomatic “pro-Taiwan” policies and acquiescing to US actions in Cen- analysts say the top cadre had not used such tough language tral Asia. Despite the Jiang administration’s relatively tight for some time. Moreover, the analysts said, a number of mili- grip on the mainstream media, nationalistic feelings can of- tary deputies to the NPC had privately criticized Premier Zhu ten be seen in the chat rooms of a number of websites. Given for not mentioning in his annual government report to the his hold on power, however, Jiang has been able to rein in legislature that Beijing would never renounce the use of force critics of his US policy, including PLA officers. against Taiwan.25 It is true that Hu is not given to nationalistic excesses It is likely that as long as the “pro-business” and “pro- and that he is aware of China’s considerable economic de- West” leaders are in charge in Beijing – and that the Taipei pendence on the US. Yet the vice-president is untested and administration does not seek aggressive steps to change the lacks national stature. On sensitive matters such as Taiwan, status quo of the Taiwan Strait – differences between China Hu must show the world that he can and the US can be contained within stand up to the Americans if he is to manageable parameters. Tangible avoid an ugly confrontation with benefits that both sides can derive hardliners both within and outside the Diplomats are under tremendous from trade and investment might serve PLA. At this stage, most of Hu’s ad- pressure from hardliners, to obscure their differences. Bilateral visers on the US, including the head including PLA officers, to “act ties also hinge on Washington’s per- of the America Institute of the Chi- tough” with the US. ception of how much the US needs nese Academy of Social Sciences, China to defuse possible crises in the Wang Jisi, are considered moderate figures who have also Korean Peninsula and South Asia. However, China itself is played a role in shaping Jiang’s “great power diplomacy.” also undergoing rapid changes on economic and political However, Hu’s aides are also aware of his need to be seen as fronts, and it is probable that nationalism will exert a more tough. In a recent article, Wang cited the imperative of being marked influence on diplomacy. While there is no need to be more assertive with the US. “The nature of America’s [China] pessimistic about how the Hu Jintao administration might policy is aggressive, while ours is a diplomacy of peace geared handle ties with the US, it is reasonable to assume that rela- toward self-preservation,” he argued, adding that Beijing tions will continue to be informed by the yin and yang of needed effective means to counter the incessant demands that cooperation coupled with confrontation. Washington was making on China. Wang also made an implicit criticism of cadres who wanted to make concessions to the US in order to maintain a good Sino-US relationship. “It ENDNOTES is true that relationships count on the world stage,” he wrote. “Yet relationships are only a means, while [national] inter- 1 For an analysis of the impact of the fight against terrorism ests are an end. It won’t do to give up interests in return for on Sino-US relations, see, for example, Catharin Dalpino and relationships.”23 Minxin Pei, “Beijing’s chance to forge true alliance,” South China Morning Post, September 19, 2001; and Cheng Li, SINO-US TIES: STILL A DIFFICULT BALANCING ACT “Assessing Sino-US relations after the APEC Shanghai meeting,” Center for Strategic and International Studies occasional That Sino-US relations still remain relatively fragile paper, http://www.csis.org/pacfor/li_cheng.pdf. despite tentative gains made at the Jiang-Bush summit is 2 The figure provided for Sino-US bilateral trade is based on obvious in the aftermath of two incidents in early March: Chinese customs statistics. The US calculates trade statistics Taiwan Defense Minister Tang Yao-ming’s visit to Florida; according to a different formula. and the leaked Pentagon report about the possible use of 3 Cited in Willy Wo-Lap Lam, “China plays waiting game nuclear weapons against seven countries, including China. with the US”, at www.cnn.com/Asia, February 13, 2002. While Beijing’s reactions did not go beyond protests made 4 For a discussion of Bush’s readiness to defend Taiwan, see by the Foreign Ministry – and it is unlikely that planned vis- “The End of Strategic Ambiguity,” Editorial, Washington its to the US by either Hu or Jiang will be affected – these Times, April 27, 2001; and Robert Kagan, “Bush’s Straight incidents have from China’s perspective undermined the ele- Talk on China,” Carnegie Endowment for International Peace ment of trust that is essential to a “constructive, cooperative Newsletter, April 30, 2001. relationship.”24 5 For a discussion of Jiang’s US policy, see Matt Forney, Moreover, the significantly more strident rhetoric used “China’s Great Wall,” Time (Asia), April 23, 2001; Francesco by Jiang and his colleagues at the National People’s Con- Sisci, “China, US and the New World Order,” Asia Times gress (NPC) of March 5 to 15 has further confirmed the fact online edition, September 19, 2001. that the LGFA and other party and government diplomatic 6 For a discussion of the impact of US actions in Central organs are under tremendous pressure from hardliners to “act Asia on Beijing’s strategy considerations, see Niklas tough” toward the US. During the NPC, generals who have Swanstrom and Svante E. Cornell, “China’s Trepidation in remained largely quiet during the past year became outspo- Afghanistan,” Central Asia Caucasus Analyst, October 10, ken concerning the need to develop state-of-the-art weapons 2001. to guard against what they consider the still-treacherous glo- 7 For an account of the alleged bugging of the Chinese Air

Harvard Asia Quarterly 22 Spring 2002 Force One, see Reuters “China Says President’s Jet Bugged,” the Chinese military,” at http://www.uwmc.uwc.edu/ January 19, 2002. See also stories about the bugging in the political_science/MIIIE/Chinacurrentshape.htm Financial Times (London) and Washington Post, January 19, 18 Jiang’s writings, collected in The Selected Works of Jiang 2002 Zemin, are due to be released before the 16th Communist 8 For an account of Zhu’s speech at Tsinghua University, Party Congress. For a discussion of Jiang’s writings, see, for see, for example Reuters, “Zhu Rongji Says Reforms Will example, Willy Wo-Lap Lam, “Jiang Battles to Save His Slow Down,” June 8, 2001. Legacy,” www.cnn.com/Asia, November 28, 2001. 9 Beijing, for example, is keenly aware of the growing de- 19 For a discussion of Jiang’s succession crisis and his role in pendence of Boeing on the Chinese market. Thus, when Vice- the army, see, for example, David Shambaugh, “Comment Minister of Planning Zhang Guobao signed a multi-billion on Civil-Military Relations in China: the Search for New dollar deal to buy 300 Boeing aircrafts soon after September Paradigms,” Rand Corp. papers; http://www.rand.org/publi- 11, Zhang pointed out that “China won’t forget our friends in cations/CF/CF160/CF160.ch2.pdf need.” For a view of the signing ceremony, see “Chinese 20 For a discussion of Hu Jintao’s trip to the US and his think- Airlines Sign Procurement Contracts with Boeing Company,” ing on foreign policy see, for example, Willy Wo-Lap Lam, website of the Chinese embassy in the US, October 2, 2001. “Hu Jintao in the Wings,” China Brief (http:// 10 In his analysis of 30 years of relations with the US, Vice- china.Jamestown.org), Jamestown Foundation, February 28, Premier Qian Qichen expressed optimism that both coun- 2002. tries would focus on their common interests rather than let 21 For a discussion of the “collusion” between party bureau- their differences get out of hand. See “Qian Qichen: China crats, capitalists and multinationals, see Wu Li, “The Situa- and the US can Lessen Troubles and Confrontation in the tion In and Out of China After May 8,” at www.redflag.com Coming 30 Years,” China News Service, February 25, 2002. website, http://redflagsh.myetang,com/redsee/wu58.html. 11 For a discussion of the mechanisms for Sino-American 22 Author’s interview with Cabestan, February, 2002. dialogue, see, for example, “High Level Strategic Dialogue 23 See Wang Jisi, “It Won’t Do to be Passive and Concilia- will be Boosted,” in Wen Wei Po, February 22, 2002; Reuters, tory,” in www.pen123.net., June 25, 2001. “FBI to Set Up Office in Beijing,” March 13, 2002. 24 For a discussion of the impact of the leaked Pentagon re- 12 For a discussion of the arrests of Uighurs in Xinjiang, see port on Beijing’s Taiwan strategy, see “America’s New Marwaan Macan-Markar, “Asian Governments Seen Exploit- Nuclear Strategy and the Situation in the Taiwan Strait,” Hong ing September 11,” in Asia Times online edition, December Kong Economic Journal, March 14, 2002. 14, 2001. The US State Department report on human rights 25 For an analysis of Jiang’s response to the views of hardline conditions in China, released on March 4, 2002, criticized PLA elements on the Taiwan issue, see “Jiang Orders ‘Mili- Beijing’s suppression of legitimate religious practices by tary Struggle’ Against Taiwan,” Ming Pao, March 13, 2002. Uighurs in Xinjiang. 13 For a discussion of Taiwan Defense Minister Tang’s visit to the US, see Tom Wolf, “US Grants Taiwan Defense Min- ister Visa,” Reuters, March 6, 2002. After Bush got into the White House, he and senior officials have refused to repeat the so-called Three Nos policy on Taiwan (no to Taiwan independence; no to one China, one Taiwan; and no to Taiwan joining global bodies that require statehood as admission cri- terion) that was enunciated by former president Bill Clinton in 1998. 14 Cited in Willy Wo-Lap Lam, “Trade Ties Taiwan to China’s Leash,” in the www.cnn.com/Asia website, January 29, 2002. In the famous Chinese classical novel Journey to the West, the legendary monkey fails to escape the control of Buddha Rulai. 15 Western diplomats in Beijing have expressed doubt as to whether a motion censuring China’s human rights records will be tabled at the UN Subcommittee on Human Rights due to be convened in Geneva in May 2002. They say that since the US is no longer a member of the committee, it is doubtful whether any European country will raise the motion. 16 For a discussion of the 2002 military budget, see “China’s Military Budget to Increase by 17.6% to 166 Billion Yuan,” in Ming Pao, March 4, 2002. 17 For a discussion of China’s latest weapons development, see Anthony Cordesman, “Weapons of Mass Destruction and China,” Center for Strategic and International Studies, Wash- ington DC, February 2001; and “What is the current shape of

Harvard Asia Quarterly Spring 2002 23 INTERVIEW WITH SADAKO OGATA JAPAN AND THE RECONSTRUCTION OF AFGHANISTAN

BY EMILY PARKER HAQ: In January you co-chaired an international conference in Tokyo to raise aid money for the reconstruction of Afghanistan. At the conference, Japan pledged up to 500 million dollars over the next two years. Sadako Ogata is currently Japan’s special envoy Were you satisfied with this amount of aid? for Afghanistan assistance. From 1991 to 2000, she served as United Nations High Commissioner for Refugees. She is currently a Resident Scholar Ogata: Well, I think it is a very good start. at the Ford Foundation in New York, where she is working on a book examining the impact of HAQ: What do you think was Japan’s primary motivation for giving such global trends on the refugee protection regime. Ogata received a Ph.D. in Political Science from extensive aid? the University of California at Berkeley in 1963. Ogata: I think you should look at the way that Japan has approached the problem of Afghanistan. The whole region has been important for Japan, but Afghanistan specifically is very important both strategically and cul- turally. Japan has had a considerable interest and commitment to help Afghanistan over the years. In 1996, when Kabul fell into the hands of the Taliban, there was an attempt to re-establish some sort of stability. Japan took the initiative in calling for political negotiations between the Taliban and the mujaheddin, and there were some attempts to bring them together for consultations. Japan did not succeed at that time because I don’t think that the objective situation really warranted a political settlement. But I think that Japan’s interest in trying to bring peace and stability to Af- ghanistan is not all that new. The second important point is that when the September 11 attacks took place, many countries pledged support to the US fight against terrorism. Prime Minister Koizumi came to the United States and met with President Bush, and said that Japan was fully committed to supporting the fight against terrorism, but Japan’s means would not be primarily military. At this point, the idea that Japan would take a lead in the reconstruction effort, while the US would take the lead in military action, was understood and appreciated. This background is important for understanding why Japan is now playing such a central role in organizing the reconstruction in Afghanistan.

HAQ: Given the problems facing the Japanese economy, and the fact that the government is in the midst of radical cost-cutting and structural reform, do you think that the Japanese public is generally supportive of such generous aid?

Ogata: In the course of the Afghan reconstruction debate and the partici- pating governments pledging aid packages, there was a lot of support in Japan. I was very pleased about that. I think the fact that the situation in Afghanistan warranted a lot of support for the sake of peace and stability was quite widely understood. There was a lot of sympathy on the part of the public. I tried my best to talk to the public, and I was pleased with their response. Although it is always more difficult to come up with major assistance when the economy is not good, economic assistance is not a question of recession or non-recession. Rather, assistance should be based on different levels of development. Aid should be seen as assistance from countries and an economies that are far more advanced, to countries that are far below them in GNP and standard of living. And nobody argued

Harvard Asia Quarterly 24 Spring 2002 against the reasoning that I presented. When it comes to bilateral channels, there are a lot of expectations on the part of the Afghan interim authorities HAQ: Was there any opposition at all to Japan’s pledge? that there will be contributions through the Japanese government. Of course, the capacity of the Afghan government for Ogata: I don’t think so. The November 22 conference in implementation requires strengthening too, for example Washington was the first attempt to have a meeting to gather through capacity building of ministries and officials. You can international support for the reconstruction of Afghanistan. also try to facilitate implementation, so that funds flow Although many countries came to this conference, the US through the central government to the provincial government and Japan took the main initiatives. The primary goal was to and to the various community leaders and community build- use reconstruction as a way to achieve the political developing programs. This is really a learning process for the Af- ment necessary in Afghanistan. The November meeting took ghan government and also for the Afghan people. But I think place before the Afghan interim authority was set up, and it that this is a learning process for the donors as well. showed the strong effort at that time to set up a governing body in Afghanistan. It was there that it was decided to have HAQ: In light of the recent controversy in the Japanese for- the first formal international conference to support the re- eign ministry, what do you think is the ministry’s first pri- construction in Afghanistan, with To- ority? kyo as the host. The clear message was political, to show that Japan was behind Ogata: There are two priorities. First, the political effort by committing to re- I think the Self-Defense Forces they have to carry out the necessary construction. function within the spirit and the reforms to correct what has to be cor- principles of Article 9 of the rected. But the other priority is to make HAQ: When you spoke at Harvard last Japanese Constitution. sure that the foreign policy of Japan fall, you mentioned that you were very does not suffer. In fact, it should get concerned about inward-looking trends in Japan. In light of even stronger. Although strengthening is the objective, I think these concerns, were you surprised by such extensive public temporarily the Japanese government and public are paying support for aid? a lot more attention to reforming the organization. Reform should end up strengthening foreign policymaking and per- Ogata: Yes, I was very pleasantly surprised. And I think forming capacity. Koizumi was very pleased. Because public support makes it easier for the government to take initiatives. One of the rea- HAQ: Last fall the Diet authorized the dispatch of Self De- sons why Afghanistan became the hotbed of terrorism was fense Forces to support the war in Afghanistan. What do because of international neglect. If we let a country be for- you think are the implications of this decision? gotten and allow terrorism to fester there, what will happen to the people of that country and to the world? That kind of Ogata: I think it meant a lot for the United States that Japan message was well-received by the Japanese public. was also trying. The Anti-Terrorism Special Measures Law was passed by the Diet and Self-Defense force vessels are HAQ: Does this mean you see Japan moving away from its supplying fuel to US and UK ships in the Indian Ocean. Also, inward-looking tendencies? Japan has not been using its military for active defense or fighting, but for peace-keeping purposes – for example, the Ogata: Oh, I don’t know about that. The Afghan situation current dispatch of an engineering core of 680 to Timor for brought a lot of interest and attention from the global com- its reconstruction. I think these are very welcome develop- munity. Japan’s security and economic base is really global, ments. and I think that was felt in Japan. Public interest depends a lot on what political leaders say and what the media says. HAQ: What are the implications of this dispatch for Article But since the end of the Afghan reconstruction conference, I 9 of the Japanese Constitution? think the issue has been receding from the public eye, and I am a little worried about that. Because the need in Afghani- Ogata: I think there is no contradiction. Some people ques- stan has not changed at all. tion the constitutionality of the Self-Defense Forces to begin with, but I think the SDF functions within the spirit and the HAQ: Are you concerned about the effective distribution of principles of Article 9. I think that the SDF’s participation in the aid to Afghanistan? peace-keeping missions does not violate Article 9, because I think that military functions have been changing as well. In Ogata: Japanese economic cooperation is provided through today’s world, war is not necessarily inter-state war like the two channels. One is through multilateral organizations, and kind that Japan lost in World War II. In those days, the mili- the other is through the central government. For the multilat- tary was looked at as primarily an aggressive combat force. eral channels, such as UNICEF or UNHCR, the distribution Now, the military is taking on peace-keeping and peace-build- of funds is not a problem so long as the programs are pre- ing functions. sented correctly and in a way that agrees with the priorities and plans of the Japanese government. I think the bulk of HAQ: The US has been vigilant in its war on terrorism, but humanitarian work takes place through multilateral channels. are you concerned about how thoroughly the US will deal

Harvard Asia Quarterly Spring 2002 25 with the humanitarian aftermath and the reconstruction pro- HAQ: Do you think the current attention on Afghanistan cess? could lead to the neglect of humanitarian needs in other regions? Ogata: The US is still carrying out the war in Afghanistan. At the same time, the US is committed to reconstruction. Ogata: Well, the Africans for example are very worried, and And it is important that the government and the public sup- even the Balkans think that they are no longer an issue, which porting the US efforts also look at the importance of recon- is not the case. Both of these areas need continuing support structing a stable society in Afghanistan because that is also and attention. And I think professional organizations like the a very strong way to keep the country on the right track. You one I led, UNHCR, have a major role to play. It is an uphill can not solve a problem by military means alone, although it battle to maintain interest and try to get the funds so that is necessary to eliminate the dangerous elements. The Al other forgotten refugee problems will not be totally neglected. Qaeda and the Taliban have to be eliminated. At the same It is not easy, as I have seen in the case of Afghanistan. But I time, in order to really make the country stable, you have to hope the lesson of Afghanistan will be that total neglect of a rebuild it from the bottom up. very volatile situation is dangerous. We need to be repeatedly reminded of this. HAQ: Are you concerned that the US I think this year will probably be has been too unilateral in its approach all right, but we will have to have a to Afghanistan? real conference again. There are con- I have observed that the public as ferences, maybe too many confer- Ogata: I think that the US, in its mili- well as governments tend to have ences, right now. There is one on the tary activity, is moving on its own a short attention spans when humanitarian part of the operation, lot. At the same time, I think that in dealing with international crises. there is one on the development part the long run no one country can re- of the operation, and there are all sorts ally determine the fate of the world of small meetings going on right now. and everyone in it. You have to have coalition building, sup- These are very useful in implementing the requirements of port building, at both the government level and at the public rehabilitation and humanitarian needs and reconstruction, but level. If this unilateralism undermines the coalition then that if you really want to mobilize public support, you have to is not useful. organize well-managed, publicly supported conferences. I think it is also important for the other parties, like Ja- pan and the European countries, to maintain their commit- HAQ: So far, do you think the international humanitarian ment and involve the US, or maybe I should say work with effort has been truly multilateral? the US. Japanese people were very supportive at the time of the Afghan reconstruction conference. I hope that Japan be- Ogata: It is multilateral. Of course there are major donors ing active will keep Americans active as well. If Japan lets and less significant donors. But one of the things that was this process fail, then I think it will be bad for the Americans very encouraging in the Tokyo meeting was that the 61 states as well. that came – and many of the ones that pledged – were not only the traditional big donors but a lot of their neighboring, HAQ: A major theme in your talk at Harvard last fall was small countries as well. Asian countries came, such as Viet- the international neglect of refugee problems, and the lack nam and Thailand. It is very interesting that that they came to of international cooperation for humanitarian solutions. You show that they want to do whatever they can. This was a very said that there has recently been more attention paid to the encouraging sign. Both Pakistan and Iran came, and pledged problem. Do you think that the international community has a considerable amount. But you have to appreciate and en- shown more concern for the current Afghanistan refugee courage this effort and make sure that it is a partnership ex- problem? If so, do you see this as an enduring concern or a perience. short term one? HAQ: In general, does the international response to this cri- Ogata: Right now it is a real concern, because there is the sis make you optimistic about the future of humanitarian potential for four to five million refugees and up to one mil- intervention? lion internally displaced returning home. Their return and re-integration is a very high priority issue in the reconstruc- Ogata: So far it has been moving in a good direction, but I tion of Afghanistan. At the same time, international attention am not completely optimistic. To make sure that a globaliz- is always at its height in a crisis situation and then it tends to ing world means an interdependent world, you have to work recede. Now the most important thing is for governments at it all the time. and leaders to carry out their commitments, and if public interest wanes, to try to arouse and maintain it. This year, I suppose the funding for the reconstruction will be all right, but whether it will continue next year or the year after that, I am not sure. I have observed that the public as well as governments tend to have short attention spans when dealing with international crises.

Harvard Asia Quarterly 26 Spring 2002 Harvard Asia Quarterly Spring 2002 27 THE BREAKTHROUGH GENERATION DALIT YOUTH IN CONTEMPORARY INDIA

BY MARIKA VICZIANY ndia’s reputation as a country of violence and a high risk for foreign investment is based, at least partially, on what have become known in India as “harijan atrocities.”1 This paper looks Marika Vicziany is Professor and Director of the I at a more positive side of Indian development. Despite centuries of social Monash Asia Institute at Monash University, 2 Victoria, Australia. She is the co-author, with discrimination and economic deprivation, India today is producing the Oliver Mendelsohn, of The Untouchables: first generation of tertiary educated untouchables in significant numbers. Poverty, Subordination and the State in Modern While tertiary education is not an entirely new phenomenon among India’s India (Cambridge University Press, 1998). dalits or untouchables3 , the turn of the 21st century is beginning to see enough of these graduates to term them the “breakthrough generation.” In breaking through the traditional boundaries that have kept India’s untouchables in conditions of extreme poverty and engaged largely in back-breaking work in rural India or on the fringes of modern cities, the new generation of college educated dalits is positioning itself for elite urban jobs. Whether or not these aspirations will be met is the subject of my current research project tracing the career paths of dalit college students in the city of Mumbai who embarked on a Bachelor of Commerce degree in the year 2000. This addresses another dimension of this “breakthrough generation” – how their values and aspirations are changing relative to those of their parents and their counterparts in rural India. The lives of the “breakthrough generation” in the vast cities of India stand in stark contrast to the horren- dous violence that all too frequently blights the lives of rural untouchables. The second part of this paper will show how the daily life of rural dalits differs from the college educated dalits of Mumbai. The students that form the focus of this paper are currently enrolled in colleges affiliated with the University of Mumbai. These students are the success stories of the dalit communities of India. They are often the first fully literate member of their family, and with few exceptions, the first family member to study at a university college. They are upwardly mobile in a manner very different from the mobility that characterizes dalits in rural India. By understanding dalit college youth, I hope to reflect on the manner in which urbanization is transforming the lives of people who until very recently were prohibited from any kind of learning. One of the distinguishing characteristics of the Mumbai dalit college students on whom this study is based is their insistence on being described as “Bhod” or Buddhist. They do not object to the word “dalit” but they prefer to think of themselves as Buddhists. Both words – Dalit and Bud- dhist – are associated with the political radicalism of Dr. Ambekdar’s attempt to mobilize untouchables after India’s independence in 1947.4 The term “dalit”, however, stresses the economic nature of the subordination of India’s untouchables. It literally means ‘ground’ or ‘broken or reduced to pieces’ and over time has increasingly come to mean those people who are very poor. It is also a term that attempts to cross the barriers of caste, by focusing on socio-economic or class divisions in Indian society. Despite this, dalits in India are typically untouchables. The Mumbai college students who insist that they are “Buddhists” are describing themselves as such because they wish to go beyond socio- economic parameters to the very heart of untouchable or dalit consciousness. They are reminding themselves and others that in following Ambedkar’s original conversion to Buddhism in 1956,5 they are also as-

Harvard Asia Quarterly 28 Spring 2002 serting a consciousness that is distinctively different from The uncle has two very young children who cannot yet help Hinduism. In contemporary Mumbai, to identify oneself as a with the business. Situ hopes to find employment as an ac- Buddhist remains as radical a statement as Ambedkar’s origi- countant at her uncle’s firm when she finishes her degree in nal declaration in 1935 that he would not die a Hindu. March 2002. Among dalit families with extended branches, Mumbai, the heart of Indian business, has been governed by the upper caste pattern of cooperation appears to have dis- a coalition government of the BJP (Bharatiya Janata Party) placed the earlier tendency for families to split up. In the and the Shiva Sena for over a decade. Both political parties past, the division of the families was driven by poverty that represent the new Hindu fundamentalism and the assertion frequently impelled family members to go their own way. of a strident Hindu cultural consciousness that has tradition- These days, with less desperate poverty and better educa- ally marginalized and even rejected the untouchables, includ- tion, families are better able to help each other and simulta- ing those who assert a dalit or Buddhist identity. neously solve the problem of what to do with their children In this article, the term “dalits” rather than “Buddhists’” when they finish their degrees, given the unemployment that is used in describing the college students of Mumbai. This faces them. convention makes the problems of the dalit youth more ac- Situ, who is already the same age today that her mother cessible to an international readership that might otherwise was at marriage, has given no thought to her life as a house- become side-tracked into concerns about the nature of Bud- wife. She reminds herself that Ambedkar’s message was “edu- dhism in contemporary India. While the nature of Buddhism cate and organize” so for her, education is the only priority among the dalits of Mumbai is an important issue, it is not for the moment. On the subject of how to find a marriage the subject of the present article. This account of dalit family partner, her views are flexible and combine elements of tra- life in contemporary Mumbai begins with the viewpoint and ditional and modern practice. She would not object to her experiences of three students currently studying for the Bach- parents arranging her marriage if they wished. Nor would elor of Commerce (B.Com) at one of the colleges affiliated they object if she found a suitable boy and married him for to the University of Mumbai. The article compares their atti- love. Both approaches were acceptable to Situ, reflecting a tudes and experiences with those of their parents and the fi- strong and trusting relationship between her and her parents. nal section addresses the question of There is no strong cultural compul- how the values and struggles of sion to insist on an arranged mar- Mumbai dalit youth today differ from riage. Nor is there any commitment rural dalit youth in other parts of In- to dowry. Gifts will be given by the dia. girl’s parents to the boy’s parents, but they will be modest. I asked her THE REJECTION OF EARLY MARRIAGE whether any of her girlfriends had been married. She replied yes, two Although she is only 18 years of them had married recently at the old, Situ’s life and aspirations are age of 18, but they were Hindus, not very different from her mother’s.6 Buddhists – in other words, not Within a single generation the expec- dalits. tations and outlook of young, urban On the subject of children, Situ dalit women has changed dramati- has also moved a great distance from cally. Situ is one of four children. Her her mother. She plans to have only mother has been a housewife for her one child and would prefer that it was entire adult life, having married at the a girl. Her one “traditional” value on age of 18, after studying up to 9th stan- the subject of marriage is the desire dard.7 Situ is completing the first year for a husband who is older than her of her B.Com in a Mumbai college by some years. Situ also hopes that but she represents an entire genera- she will fall in love and marry the tional shift in the direction of tertiary man she loves. I asked her where all education. Her older sister completed these new ideas came from. Situ an arts degree a year ago, and her shrugged. “Was it TV?” I asked. younger sister has just enrolled in a “No, not TV,” although her favorite science degree program. show was the Star Plus soap opera Situ’s father and brother are both Kahhi Kisse Roz.8 This show deals factory workers but one uncle runs a with the traditional conflict between printing business employing a dozen mother-in-law and daughter-in-law, workers in Mumbai. This diversifi- a theme that has enormous entertain- cation of employment is an impor- Bodybuilding is one of the professions that has ment interest for Situ although it tant indicator that India’s dalits are attracted dalit youth in Mumbai. In 1999, Ravi won bears no relationship at all to her life nd moving away from the traditional 2 place in the Mumbai Body Building champion- or that of her mother’s. Her parents ships. Given the uncertainty of the job market of jobs as hard manual laborers in agri- Mumbai, however, he is keeping all his options migrated from rural Maharashtra to culture and as haulers, stone-cutters open by completing a Bachelor of Commerce de- Mumbai the year Situ was born. As and common laborers in the towns. gree. a result of migration Situ’s parents

Harvard Asia Quarterly Spring 2002 29 have never lived near their parents-in-law. But the tension a marriage partner rather than force a choice on their daugh- between mother-in-law and daughter-in-law is one of the great ter. Once married, Rita expects to have no more than one themes of Indian popular culture, classical literature and child and would welcome a girl or a boy. Boys have no spe- modern sociology. The distance between these paradigms and cial importance in her family. In this respect there is a great untouchable reality are a source of fascination and amuse- difference between dalit families and caste families in In- ment for Situ. dia. With modernization, Indian families have shifted in the direction of an enhanced preference for sons. In some parts MARRYING A SUITABLE MAN of India the privileging of a son is taken to the extreme of female infanticide or the abortion of female fetuses after the Rita is two years older then Situ, but her opinions and sex has been determined by amniocentesis. Upwardly mo- expectations are not substantially different from Situ’s.9 If bile untouchable families are often caught up in this mod- anything, Rita is much more focused on making a success of ernization paradigm. In Mumbai, however, there is no evi- her B.Com and seems to be more determined to proceed to dence of this amongst the dalit college students I have been higher studies. This reflects both the maturity of her greater working with. The one point of difference with Situ is that age and her academic ability. The older an Indian student Rita’s family will give nothing at all on marriage – there is becomes, the more aware she is of the no dowry but there will be some ex- vast scale of graduate unemployment change of gifts. She plans on a very that surrounds her. Proceeding to big wedding but only because her fam- higher studies is often a short-term so- The older an Indian student ily is so large. lution to unemployment. For Rita, becomes, the more aware she is Both Situ and Rita are very at- marriage is not a consideration until of the vast scale of graduate tached to Dr. Ambedkar and what he the age of 24 or 25. Her pragmatism unemployment that surrounds represents to Maharashtrian dalits. For is also tempered by a less romantic out- her. some days prior to our meeting, both look than Situ. Situ and Rita had been involved in cel- Rita represents the first generation ebrating the 100th birthday anniversary in her family to achieve tertiary education. Her father, a fore- of Ambedkar. In Mumbai, Ambedkar’s birth and death have man in a public sector company in Mumbai, studied up to grown into large public festivals that bring thousands of un- 11th standard. Her mother, who has been a housewife all her touchables into the city from surrounding rural districts. The life, also studied to 11th standard. Like Situ’s siblings, Rita’s press of people is so great that the Mumbai police suspend are college students. One 22-year old brother studied for a all their rules against squatting so that the dalit visitors from B.Com at the same college where she is presently enrolled. rural India are legally permitted to sleep and live on the streets He also pursued computer studies with a major Indian soft- without harassment. The main role of dalit girls is to serve ware company over a period of two years while simulta- food cooked by resident dalit families to the thousands of neously studying in college, but these efforts have not im- visitors who throng the streets. Situ and Rita had both served proved his job prospects. Rita pointed out that her brother’s at various food stalls as part of the celebrations. marks were too low and his English was poor. This has made it difficult for him to compete in the Mumbai job market. He AN EMERGING DALIT LEADER remains at home and is unemployed, with only the TV breaking the monotony of his life. My third mini-biography is of a young man, an emerg- Rita is willing to take any job when she finishes college ing student leader and most likely a major dalit leader in and clearly has different ideas from her brother. Her English later life.10 In late 2001, Sanjay and his friends launched a is very good so her prospects are also better. Like her brother, student magazine that will report on the life of students and she is taking extra computer classes to expand her skills and staff at the Mumbai University. When necessary, they in- knowledge in various software programs relevant to the ac- tend to use the magazine to articulate grievances surround- counting profession. These classes cost Rs.550 for three ing issues of equity and fair practice in employment and ex- months, which makes them over three times more expensive amination procedures. Two years ago when we first met, than a year at Mumbai college for the B.Com degree Sanjay was involved in student theatre, but now his time is (Rs.660). This is one indicator of the investment that dalit taken up by another kind of theatre. “Instead of performing, families are prepared to make to improve their children’s I am directing,” he said. This eloquent metaphor captured job prospects. Like Situ, Rita also has an uncle involved in a his shift out of being a mere player in student drama perfor- small business. He runs a cloth shop in Sattara district, in mances to a leadership role in the much larger drama of stu- the hinterland of Mumbai. Like her uncle, Rita is thinking dent politics in Mumbai. of setting up her own business, given the graduate unem- Of all the students I have met, Sanjay is the most pro- ployment affecting B.Com students. gressive in his outlook. Like Situ and Rita, many of his friends Rita’s personal expectations and opinions differ little come from other castes; on the day I interviewed him he from those of Situ. Her parents would agree to her marrying was followed by a posse of magazine helpers who clearly a suitable boy that she loved; on the other hand, she would look to him for leadership. Sanjay has many admirers. His agree to an arranged marriage with a suitable partner. In both one love affair was with a caste Hindu girl.11 But after a cases the important adjective is “suitable”, a word that indi- year, she called it off in response to parental pressure. The cates the parents’ willingness to reach a joint decision about girl’s parents disapproved of a cross-caste relationship. De-

Harvard Asia Quarterly 30 Spring 2002 spite this disappointment, Sanjay is confident that he will tion skills in general and he is obviously applying the les- marry a girl he loves. For him and his family, the caste iden- sons of his banking experience to the new venture of the tity of his future wife is of no concern. “Caste is rapidly student magazine. vanishing in India; we share coffee together at college; we work together. Like the British, the new generation does not A COMPARISON: THE VALUES OF TODAY’S DALIT care about caste.12 It is only a problem for the older genera- COLLEGE YOUTH AND THOSE OF THEIR PARENTS tion,” he said. For the moment, he has no thoughts of marriage but is preoccupied with his career. If and when he does As the three case studies above show, Mumbai’s dalit marry, however, there will be no dowry involved. Sanjay college youth represent a break with the traditional life of has strong views on dowry: it is very bad and not widely India’s untouchables in many ways. Unlike their parents, not practiced amongst Mumbai’s Buddhists. He went on to ex- only are the youth literate but often the first generation of plain: “Dowry is like selling a son. My father would wish to their families to obtain a degree. They plan to continue their invest in me, not sell me,” he said. By investment, he meant studies and have no plans for immediate marriage, compared continuing with his education. with the early marriages of their parents. They oppose dowry Sanjay has mapped out a five-year plan: first to com- and believe in marrying partners they love, although they plete the B.Com and then proceed to would not oppose an arranged marriage a Master of Commerce in Management because they expect their parents to Studies. Then, if he has the necessary consult them. They mix comfortably grades, he hopes to study law. Since The most distinctive thing about with non-dalit students and do not re- we met at the start of his enrollment in these college students is their ject the possibility of an inter-caste the B. Com. less than two years ago, overwhelming sense of marriage. At the same time, they rec- he has become sharply focused on optimism. They are forward ognize that inter-caste marriages are where he plans to go in the next few looking and see caste as a dying opposed by the non-dalit communities. years. In contrast to Situ’s and Rita’s institution. Finally, it is important to note that col- parents, Sanjay’s father has a degree lege education is no longer regarded – a rarity twenty years ago for dalits. as something only for dalit boys. Young The Bachelor of Arts degree is from the same college where women also attend colleges and their expectations are not Sanjay currently studies commerce. His father’s story was substantially different from those of young men. one of genuine struggle beginning as a sweeper for Central The most distinctive thing about these college students Indian Railways. He progressed upwards to become the head is their overwhelming sense of optimism. They are forward typist. The success of his father has given Sanjay enormous looking, have plans for the future and see caste as a dying confidence. He admires his father greatly and they are good institution. They are confident and increasing numbers of them friends and confidants. Together they are active in the speak English – a critical ingredient in any modern Indian college’s council. success story.15 This impression is confirmed by earlier work Another source of his confidence comes from a life based on a questionnaire distributed to 51 Mumbai dalit col- where he has experienced no caste discrimination. His fam- lege students in early 2002.16 The responses to the question- ily home is located in the midst of hutments13 belonging to naire showed that the majority of them aspired to better things his uncle and grandfather. His parents are dedicated to his even though they did not always expect their lives to become education, despite the criticisms from his uncle who thinks easier (Table 1). The responses to the questionnaire are also they are “wasting” too great a part of their income on Sanjay’s interesting because they show the social conservatism of dalit education.14 They moved hutments in order to be closer to a students when it comes to their parents – 96 percent of them private school that taught in English. It was not a convent hope to look after their elderly parents. During the in-depth school and employed teachers from various caste and reli- interviews conducted over the last two years, I sensed that gious backgrounds including Christian, Hindu, and Muslim. today’s college students feel much gratitude to their parents The third inspiration in Sanjay’s life has been the teach- who sacrificed many comforts to enable them to finish school ings of Ambedkar and the values of Buddhism. Buddhism is and pursue a college education. They are also conscious of not a religion for Sanjay; it is way of living. He applies Bud- the fact that their parents lived in times when there was more dhist principles to almost everything “My studies have taught social discrimination, as a result of which their lives were me that anyone can become a Buddhist – it is not a religion, more difficult ten or twenty years ago. This realization has not a caste and not a community. It is a bank of knowledge, produced a strong bond between today’s college youth and a library, a path,” he explained. A year ago, Sanjay had a their parents. short-term job with a bank in Mumbai earning Rs.3000 a Mumbai, in other words, is beginning to generate posi- month plus bonuses for bringing in more business. But mak- tive social changes that go beyond a mere accommodation to ing money is of no consequence to him. He has no regrets the conveniences of living in modern cities. In an earlier work, about his decision to forego earnings in the interests of pur- Oliver Mendelsohn and I argued that social discrimination suing his five-year plan. At the same time he learned a great in the sphere of public life had largely vanished but that dis- deal about communication skills from his short-term expo- crimination persisted in private life.17 In the three case stud- sure to the world of marketing. Sanjay has his own philoso- ies above, the reader can see how discrimination in the pri- phy about the values of marketing: he spoke at length about vate sphere has also started to erode among Mumbai’s col- the connection between marketing and good communica- lege students, with dalit and non-dalit students sharing cof-

Harvard Asia Quarterly Spring 2002 31 Discrimination in Schools Table 1 While there can be Aspirations of Dalit Youth in Mumbai’s tertiary colleges little doubt about the transforming effects of urban life Survey Statement % who strongly agreed on the lives of India’s dalit with the statement youth and their non-dalit ______friends, it is equally clear I expect to travel in India 98% that rural India has not I expect to improve my occupation 96% caught up with the new and I expect my children to attend an IIT1 96% more open values. Drinking I hope to look after my parents when they are old 96% coffee and chatting with I expect my children to attend university 90% friends in a college in Mumbai contrast strongly I expect life to become easier 76% with the violence that I expect to own my own computer 76% awaits rural dalits if they I expect to earn more money 75% I expect to travel abroad 65% transgress even modest social boundaries. Although I expect to investment on the stock exchange 45% children have little or at best I expect to own my own mobile phone 39% imperfect knowledge of the I expect to spend more money on clothes, restaurants, entertainment 20% norms of caste behavior, I expect to have more holidays 18% this did not prevent one teacher in the village of Source: Author’s database of responses to a questionnaire to 51 Mumbai dalit college Kattunaickenpatti students. (Tamilnadu) from beating a 1 IIT = Indian Institute of Technology. India’s IIT’s are the elite tertiary institutions training five-year-old untouchable India’s leading engineers, scientists and business leaders. girl for drinking from a cup “normally reserved for upper caste students.”21 On the other side of India, in fee and conversations; common social goals in, for example, Viraatnagar, Rajasthan, harrassment of Balmiki22 (formerly the establishment of an inter-caste theatre group; political the sweeper caste23 ) students has pressured them to drop out goals within the university environment and collaboration in of school as a result of which Balmikis have the highest drop- the production of a student magazine. Increasingly, emotional out rate in that area. attachments also cross caste barriers and while frequently Harassment ranged from degrading verbal insults to sit- broken in response to parental pressure from the non-dalit ting on the floor at the back of the classroom, near the shoes side, they do represent an important emotional engagement of the other children, rather than on the mat where the other that defies caste rules. Moreover, cross-caste relationships children sit.24 Balmiki students in urban Rajasthan, by condo not typically bring upon urban dalits the extreme violence trast, fare much better – in the slums of Jodhpur, for example, and retribution that is normal in Indian villages. their enrollment in primary school is 80 percent of eligible Balmiki children. As in Mumbai, the rising literacy of urban COMPARISON WITH DALITS IN RURAL INDIA Balmiki is starting to be reflected in the diversification of employment away from the traditional practice of collecting In the following comparison between the values and night-soil. One possible reason for the difference between expectations of Mumbai’s dalit youth and their rural coun- rural and urban Balmiki lives is the small number and isola- terparts, I have momentarily set aside the worst case sce- tion of sweepers in villages compared to the greater safety of narios associated with the extreme violence that all too fre- larger numbers in Indian towns and cities. Urban India is quently mars the family lives of rural untouchables. The dis- also a more intense and reactive political environment, invit- figuring impact of rural violence on daily dalit lives is a ing closer scrutiny from political parties and the press. This subject of great complexity. As a recent report noted, vio- contributes to the assertiveness of urban dalits. lence in rural India ranges from the organized repression of landlord armies in Bihar18 to the spontaneous, insane envy Dalit Refusal to Perform Traditional Rituals of Tamilnadu’s other backward castes (OBCs).19 Urban In- dia, too, has it moments of extreme caste violence, but how Traditional forms of discrimation in rural India also per- this has impacted dalit youth is beyond the scope of this sist, creating unique pressures and tensions on dalit family paper.20 With these caveats, I now turn to an account of how life. One method of ritual subordination over many centuries the family lives of rural dalits differ from the optimistic sce- has been the requirement by the “clean” caste Hindus25 that nario that emerged from case studies of dalit college youth dalits perform especially degrading functions during festi- in contemporary Mumbai. vals such as the slaughter of sacrificial animals. The rejection of such obligations became a major expression of dalit

Harvard Asia Quarterly 32 Spring 2002 rural protest from the nineteenth century onwards.26 Cases Changing Names to Avoid Discrimination of conflict continue to be reported. The village of Jadimalkapur (Medak district), Andhra Pradesh, required one Changing one’s name is another kind of response to op- dalit family to slaughter 35-40 buffalos in the triennial pression, although this is more common in urban than rural Durgamma Jatara festival. In 1993, an educated dalit youth India for the obvious reason that in one’s ancestral village named Ratnam refused to perform this ceremony.27 His frail everyone knows who you really are. Dalit government offic- 60 year-old father volunteered to do the job to prevent vio- ers in many parts of India report that they must change their lence against his son and family. Ratnam fled to Hyderabad, names to something “neutral” because an obvious dalit name but three years later the conflict re-emerged. This time will prevent them from finding rental accommodation in the Ratnam’s father’s health had declined and he lacked the cities: “I was a ‘Choudhary’ for three years!” Laughs Chunni strength to slaughter so many animals. The village panchayat Lal Jatav in Kumhere village of Bharatpur district. “That was sent for Ratnam, and then ostracized the family when Ratnam in Jaipur between 1975-1977. I was a savings officer of the refused to perform the ritual. A relative of his then “inher- government of India.”31 ited” the task, an act that prompted Ratnam to complain to A “neutral” name is typically a high caste name. The the District Collector, the highest government servant in ru- above experience relates to the 1970s but social norms re- ral India. The outcome was that his entire family was threat- main largely the same. Sainath reports that dalits working in ened with murder. They all had to leave the village and Ratnam Trichinopolly for BHEL (the large public sector electricity gave up further studies to support his parents. giant Bharat Hiindustan Electricity Limited) find it necessary to hide their dalit names in order to get accommodation Dalit Assertiveness and Emulation of High Caste Rituals even within BHEL’s own housing estates.32 In rural India, changing one’s name is typically an act Dalit assertiveness sometimes takes the form of emulat- performed not by a single individual or family but an entire ing the customs and habits of the high castes. The noted In- caste. The Valmiki or Balmiki of northern India is a good dian anthropologist M. N. Srinivas called such imitative be- example of this practice. Today the traditional word ‘bhangi’ havior “Sanskritisation.”28 One common manifestation of is never used to describe the sweeper caste because of its “Sanskritisation” affecting the lives of rural dalit families is associations with the horrors of collecting night-soil often in the popularity of taking grooms to weddings on horseback. wicker baskets which leaked onto the heads of bearers. In- A hundred years ago, only high caste grooms were allowed stead, the name Valmiki or Balmiki has been adopted not to do this. Today, landlords of all caste backgrounds ride only because the sweepers revere the Ramayana but also horses or tractors to their weddings. But when their landless because in claiming a relationship to the mythical ancestor dalit laborers do likewise, the result is often rural violence as and author of the Ramayana they are also claiming self-re- the landlords and their hired hands seek to unseat presump- spect and honor in the eyes of the wider Hindu community. tuous dalit grooms.29 In some cases, the violence that has exploded in response to dalits literally riding higher than their Emergence of Dowry in Rural India traditional status permits can best be described as “extrava- gant forms of revenge” – as was clearly the case in the Almora Within the confines of family life, it is possible to dis- District incident in May 1980. On that occasion, some 14 cern aspects of “Sanskritisation” that do reflect a deeper untouchables were killed, including six youths who were burnt change in values. In rural Bihar, untouchable castes like the to death in a house to which they had fled. They had been chamars have traditionally paid a “bride price” on marriage. carrying the groom in a palanquin when caste Hindus de- This requires the groom’s parents to pay the bride’s parents manded that he dismount. The caste Hindus claimed that for the privilege of receiving a bride. The practice probably unless the groom dismounted at the entrance to the village, reflects the long history of matrilineal customs amongst many the Hindu deity in the Temple would be offended.30 untouchable castes. With modernization, however, the high Despite the respect accorded to Srinivas’s analysis of caste tradition of giving dowry in the form of substantial upward social mobility by low castes, “Sanskritisation” may amounts of money and goods is gradually asserting itself.33 not be the best word to describe the above phenomena of In contrast to the bride price, dowry is given by the bride’s riding horses or lounging in palanquins. It is possible to un- parents to the groom. According to Jack Caldwell, the noted derstand the motivation of rural dalits without assuming that demographer of India, dowry today increasingly represents they actually believe in the intrinsic value of any of these the economic pressure to “buy” a suitable groom for one’s acts. Rather, dalit grooms and their parties might simply be daughter. In one case I studied in the Patna district in 1983, asserting that they have as much right as anyone else to “ride the gold earrings of the dowry were used to finance a young high” in marriage processions. As such, “Sanskritisation” is man’s Masters degree at the University of Patna. The family not so different from other forms of assertive behavior by were chamars or traditional leather workers. In modern Bihar, dalits. The form of assertiveness might appear to condone they are among the most upwardly mobile untouchable traditional upper caste behavior, but the meaning of protest groups. Unlike the desperately poor and down-trodden might be more closely associated with the radicalism of musahars (the rat-catchers and rat eaters of Bihar) the chamar Ambedkar than anything else. family I studied were not only reasonably well off (they had a magnificent bull tethered near their own tap, which in particular is a rarity for rural untouchables) but the head of the household was also the local representative of the Peasant

Harvard Asia Quarterly Spring 2002 33 and Workers Party. ents have a strong preference for marrying their daughters Since 1983, dowry is increasingly common amongst just before or immediately after the onset of the first menses. upwardly mobile rural dalits. As the marriage of Dhanraj and Marriage protects a girl’s reputation – even if rape results in Kuchchi reveals, even modest amounts of dowry are impor- pregnancy, there is no way of connecting the pregnancy to tant in rural India. Dhanraj was 24 when he married 20 year- the rape once a girl lives with her husband. This is especially old Kuchchi in 1989. Kuchchi’s dowry consisted of “rice, so if the woman does not tell her husband about the rape, wheat and dal or pigeon peas – 10 pounds of each.”34 This is which is likely for reasons of fear, shame and retribution. the smallest dowry I have come across in my research. The case of Dhanraj and Kuchchi, however, is known not because Inter-caste Marriage in Rural India of the issue of dowry but the circumstances in which Dhanraj was murdered. Both Dhanraj and Kuchchi worked for a land- The three case studies at the start of this article showed lord in the Indian state of Uttar Pradesh (of the Thakur caste) that inter-caste friendships are more tolerated in urban than who demanded to sleep with Kuchchi. Dhanraj and Kuchchi rural India. Inter-caste marriages are also increasing, but there refused. For their defiance, Dhanraj was soaked in kerosene is still very strong opposition and resentment especially from and set alight the very same day. When he died almost two the high castes. In October 2001, a Jat girl married a dalit days later, the landlord accused him of stealing Rs. 50 under boy in New Delhi. The Jats, a “clean” caste renowned for its the influence of alcohol and suggested to the police that entrepreneurial drive both in agriculture and industry, were Dhanraj had set himself alight in shame. outraged and the dalit boy’s family were accused of kidnap- “Sanskritisation” amongst some rural dalits takes many ping. There were grave fears for the couple’s safety espe- forms of which dowry is only one. There cially for the Jat girl whose female rela- is some limited evidence that sati might tives told reporters that she needed “to also have appeal to some dalits wishing be eliminated to redeem the lost pride to achieve self-respect. Sati, the custom In rural India, it is much easier of the community.”38 of a widowed woman voluntarily agree- to find and kill couples who In rural India, it is much easier to ing to be burnt on the death of her hus- cross caste boundaries through find and kill couples who cross caste band used to be a practice limited to marriage. boundaries through marriage. One re- very few, high castes and geographically cent murder in Purnia (Bihar state) in- restricted to areas like Rajasthan. Some volved a 35 year old backward caste upwardly mobile families might be tempted to imitate the woman and her 22 year old dalit lover.39 From the viewpoint rare practice of sati as a way of not only trying to equal the of a foreign observer, this kind of marriage might seem higher castes but indeed outdoing them. An example of sati unproblematic because the backward castes are also typically amongst the dalits occurred in the district of Bundelkhun poor and disadvantaged relative to the higher castes. But the (Uttar Pradesh state) in November 1999 when a 50 year old barriers that divide the backward castes from the untouch- widow with a large family and six acres of virtually useless ables are just as insuperable as the barriers between high castes land committed sati after her husband died.35 and untouchables. Indeed, some of the worst violence in rural India has occurred between backward and untouchable Early Marriage Among Rural Dalits castes. This is because the backward castes have only recently become upwardly mobile. Typically, upward mobility In contrast to the values and practices of urban dalits, among the “backwards” is achieved through small land ac- early marriage is common among rural untouchables. For quisitions. These land purchases then convert the “backwards” example, in one study of 33 dalit women in Bidar district, into petty landlords who employ untouchable laborers and Karanataka, 30 percent had married between the ages of 7 frequently exploit them just as ruthlessly as traditional, high and 16. Of these ten, one was widowed, two separated from caste landlords. Beyond these economic considerations there their husbands, three married to a close relative, and there is the more fundamental fact that the rituals of caste in India were two instances of polygamy.36 Age of marriage is also define the “backwards” as being “clean castes.” As such, they positively related to level of schooling attained. The higher are ritually separated from the permanently unclean, impure the age of marriage, the higher the level of educational and polluting untouchables. achievement is likely to be. Primary education for the dalit If the partners of a cross-caste marriage manage to sur- girls in Bidar district was a real possibility because of the vive the wrath of their families and castes, the parents of the activities of a Women’s Association (the Mahila Samakhya). high caste partner might be compelled to endure social hu- Even so, attending school was difficult (in contrast to the miliation. One recent report noted that when a Brahmin girl Mumbai situation) because of many factors including the fear marries a dalit boy, she must go to live in the untouchable that the girls will come to harm. The distance between home section of the village. The Brahmin community can only tol- and school poses a danger to girls, especially those who have erate this humiliation if the girl’s parents declare that their had their first menstruation. The families fear that the girls daughter has died. As a public declaration of this “ritual death” will be raped and that they will be subject to corporal pun- the father is required to shave his head and drink gobar pani ishment at school by male teachers.37 (cow urine). All visits between daughter and parents are for- One of the greatest pressures encouraging the early mar- bidden. These ritual punishments, or worse, are decided by riage of rural dalit girls is the risk of rape by landlords and the relevant caste council that controls caste law and proto- higher caste men. As numerous observers have noted, par- col at the village level.40 Even if the parents sympathize with

Harvard Asia Quarterly 34 Spring 2002 a daughter who decides to defy caste rules, they cannot con- gence in India of a new “civic culture” driven by a “sense of travene the ruling of the caste council unless they are willing convenience and utility” rather than a more profound behav- to be ostracized. ioral change in more intimate social situations.43 Living in The degree of violence that inter-caste affairs and mar- cities requires the easy sharing of public utilities – it is sim- riages engender varies from region to region and depends on ply not practical to discriminate against individual users of a wide range of circumstances affecting inter-caste relation- trains, buses, cafes and offices. Discrimination in the private ships in particular areas. As with land disputes, it is impor- sphere – where resistance to social and behavioral change tant to remember that some of the worst violence can occur has been most enduring – is an entirely different matter. How- between untouchable dalits and other low castes that are not ever, evidence from the life stories of dalit college youth in much above them in the rural hierarchy. For example, the Mumbai today suggests that by the beginning of the 21st cen- Indian constitution recognizes the need to provide special tury, the personal lives of young dalits are also freeing up, as concessions and protection to Scheduled Castes (or SCs) and social interaction with higher castes becomes more accept- Scheduled Tribes (or STs). The former term is the bureau- able. This explains their new optimism. By 2030 about half cratic name for dalits or untouchables who form some 15 of India’s population will be living in cities, a good omen for percent of the Indian population while the latter term is how grass roots democracy and freedom. the Indian administration describes the 12 percent of the In- A number of factors have empowered young urban dalits, dian population who come from tribal backgrounds. Both the most significant being education. Despite ongoing dis- population groups are severely disadvantaged in compari- crimination and caste prejudice from the older generation of son to the “clean” castes of India. Despite the low position higher castes, bright young urban dalits are able to be lead- shared by SCs and STs in the gen- ers, attracting support and admi- eral scheme of Indian society, there ration from across the caste spec- are also sufficient differences be- trum whether their endeavors are tween these two groups that can Evidence suggests that by the focused on college theatre or stu- give rise to violence if circum- beginning of the 21st century, the dent politics. All this represents a stances arise in which the ritually personal lives of young dalits are also major shift in outlook and oppor- higher caste feels offended. The un- freeing up, as social interaction with tunities. Not surprisingly the mod- touchables are never the “higher higher castes becomes more ern generation of college dalit caste” in such circumstances. acceptable. youth also have different family In Bellary district (Karanataka ideals that begin with the notions state), for example, an affair be- of choosing their life partners, tween a Valmiki41 scheduled tribe woman and a dalit man marrying for love, delaying marriage, continuing with their were the occasion for inter-caste violence in the village of education and repudiating dowry. None of these values have Vannenur. The local Valmiki tribe are the numerically domi- any special connection to Buddhism. They are, however, a nant caste in the village from which the couple came. They reflection of the impact of Ambedkar’s political teachings: also own land and they regard themselves as superior to the educate, organize and agitate. They are also values shared dalits. The couple initially escaped from the village, but even- with millions of undergraduates across the world. However, tually the woman was caught and brought back for punish- Mumbai’s dalit college youth have come to articulate these ment. The man was never caught, but his dalit friends were values through the teachings of Ambedkar who made “mod- attacked and the dalit woman who had allegedly encouraged ernism” relevant to them. the affair was severely beaten. Violent cases of this kind can The “breakthrough generation” has begun to break be prosecuted under the Prevention of Atrocities Act of 1989 through the social and political barriers that have tradition- for Scheduled Castes and Scheduled Tribes, but this was not ally divided India’s untouchables from the rest of society. possible on this occasion because the perpetrators of the vio- Just how difficult this process is can be gauged by the kind of lence were themselves members of a Scheduled Tribe which social violence that continues to define the lives of dalits in the Act of 1989 seeks to protect. In this situation, the Protec- rural India. This violence is not only between high castes tion of Civil Rights Act of 1955 had to be invoked. The eight and dalits, but also between dalits and other very low castes Valmiki attackers (including three women) were arrested but and tribal communities that do not appear to be much better when released on bail, the five men disappeared from the off than the dalits themselves. By the standards of Indian area. Further prosecution of the case, despite widespread villages, the lives of dalit college students in Mumbai have publicity and media coverage, appears unlikely. The Indian improved in ways that are unthinkable to the majority of land- justice system is no more likely to succeed in cases of this less dalit laborers today. kind of conflict than in cases under the Prevention of Atroci- ties Act (1989) involving higher castes who carry out violent attacks on untouchable dalits and Scheduled Tribes.42 Author’s acknowledgements: A special word of thanks to Dr Savia Viegas of K C College, Mumbai, for her assistance with this project. CONCLUSION Fieldwork in Mumbai during the last few years has also been supported by grants from the Faculty of Business and Economics Freedom of association has been a long struggle but had (Monash University) and the hospitality of the Hyderabad Sind been sufficiently achieved in large Indian cities by the early National Collegiate Board, Mumbai. 1990s. In 1998 Oliver Mendelsohn and I noted the emer-

Harvard Asia Quarterly Spring 2002 35 ENDNOTES grade. 8 The family has color, cable TV that they watch late into the night. 1 The documentation of violence against India’s untouchables be- This particular program begins at 11.30pm. The cable TV fee is gan with the reports of the Commissioner for Scheduled Caste and Rs.100 per month. Scheduled Tribes after the 6th Report of 1956-7, which noted com- 9 Interview by the author, Mumbai, Tuesday 11 December 2001. plaints about the gross mistreatment of “harijans.” Over time, re- 10 Interview by the author, Mumbai, Thursday 13 December 2001. portage on the number, frequency and severity of violent incidents 11 I am using Sanjay’s words to describe his former girlfriend. By against untouchables increased. The Commissioner’s Report for contrast, the dalits or untouchables of India are regarded as being 1971-3 included an enlarged complaints section titled: “Cases of beyond the pale of caste. They do not belong to the original four- Atrocities and Harassment.” Over time, the Indian media also be- fold Varna division of the Indian caste system. Hence the literature gan to report on the rising level of violence and in doing so, the often talks of the untouchables as being permanent outcasts of In- term “Harijan atrocity” slipped into common usage. The term dia. For a discussion of these concepts, see Mendelsohn and “Harijan atrocity” covers a range of violent incidents including rape, Vicziany, op.cit., pp.5-8. murder, beatings and arson. The worst examples of atrocities in- 12 The role of the British in breaking down caste barriers is a fre- volve mobs and private armies (representing the interests of land- quent refrain amongst the dalits. While the British were too fright- lords, often petty landlords) attacking not only individuals but en- ened to directly challenge caste for fear of destabilizing what they tire harijan families and villages. Women and children are not, typi- already regarded as an unruly society, they nevertheless behaved in cally, spared in such attacks. For a discussion of “Harijan atroci- a manner which undermined the ritual prejudices of caste, e.g. they ties” see Oliver Mendelsohn and Marika Vicziany, The Untouch- employed untouchables servants within their own homes as cooks ables: Subordination, Poverty and the State in Modern India, chapter and butlers. This was unthinkable within the parameters of tradi- 2, “The question of the ‘Harijan atrocity’’’, pp.44-76, Cambridge tional India where one’s home had to be quarantined from the pol- University Press, Cambridge, 1998. The chapter distinguishes be- luting presence of untouchables. tween ‘traditional’ forms of violence against untouchables and 13 Dalit homes are called “hutments” because they are typically too ‘modern’ forms arising from disputes about land, wages and social small and modest to be called houses. oppression. 14 The fees for Sanjay were Rs.30 per month in the early 1980s; 2 Ibid., chapter 1 ‘Who are the Untouchables?’, pp. 1-43. Rs.60 per month in the late 1980s; Rs.100 per month in the early 3 The term “dalit” has gained acceptance as a descriptor for “un- 1990s. Regrettably data about household income is not yet avail- touchables” in many parts of India. In western India and Mumbai, able. urban untouchables in particular, often prefer to describe themselves 15 The interviews reported in this article were conducted mainly in as “dalits.” In doing so, they are identifying themselves with a radi- English with occasional questions to Dr. Savia Veigas who, when cal stream of untouchable politics that dates from Dr. Ambedkar’s necessary, was able to clarify things in the local Marathi language. attempts to mobilize untouchables. 16 With the help of Dr. Savia Veigas, we distributed a simple ques- 4 Dr. Ambedkar remains India’s most famous untouchable leader, a tionnaire to a sample of 51 dalit college students enrolled in the man who had the education and authority to challenge Mahatma Bachelor of Commerce degree in Mumbai. The returns were used Gandhi’s claim that only he “the Mahatma” represented all Indi- to create the dalit database on which Table 1 is based. Thanks to ans, including untouchables. The famous contest of wills and phi- Tim Thornton (Project Officer, Monash Asia Institute) for setting losophy between Ambedkar and Gandhi, as illustrated by the events up the database. leading up to and following on from the Poona Pact of 1932 (see 17 Mendelsohn and Vicziany, op.cit., pp. 266-267. Mendelsohn and Vicziany, op.cit., pp. 104-117) is one of the best 18 Ibid., “The case of Bihar”, pp. 55-69. documented events of the history of pre-partition India. Ambedkar 19 Human Rights Watch, Broken People: Caste Violence Against was a Maharashtrian mahar untouchable, whose position contin- India’s Untouchables, New York, London, Washington, Brussels, ued to rise despite the concessions he made as a result of the Poona March 1999, chapter V: The Pattern of Abuse: Southern District Pact. He eventually became the principal draftsman of the Indian Clashes in Tamilnadu and the State’s Response: http://www.hrw.org/ Constitution and therefore, also the architect of the concessions reports/1999/india/India994.htm, accessed in November 2001. The and reservation policies which the Constitution establishes in the violence against dalit Pallars has been caused mainly by the Thevars, interests of untouchables (officially called Schedule Castes) and an OBC (Other Backward Caste) group. The other backward castes/ tribal peoples (official termed Scheduled Tribes). classes or OBCs is a term which has emerged in post-independence 5 Dr. Ambedar decided to convert to Buddhism in 1956, taking India to recognize that it is not only the untouchables who suffer millions of maher untouchables with him. In doing so he carried poverty and disadvantage. While this is true, we still need to recog- out the declaration he made in October 1935 at the Yeola Confer- nize that the untouchables suffer far worse forms of economic dep- ence that he would “not die a Hindu.” This statement led to deep rivation and social discrimination. divisions amongst caste Hindus and the untouchables themselves. 20 For example, police violence against the dalits of Ramabai Between 1935 and 1956, Ambedkar considered a wide range of Ambedkar Nagar in Mumbai when the dalits protested against the options to Hinduism, including Sikhism. In the end he opted for desecration of a statue of Dr. Ambedkar in 1997. See ibid., chapter Buddhism because he saw values that were compatible with mo- VI “The Ramabai Killings.” dernity, in particular a belief system based on egalitarianism. See 21 Case cited in Submission by the Ambedkar Centre for Justice ibid., pp. 114-117. and Peace to the UN Committee on Human Rights, Geneva, 20-27 6 Interview by the author, Mumbai, Tuesday 11 December 2001. July 1997 on the website of the Ambedkar Centre for Justice and The real names of the three students whose mini-biographies are Peace, http://saxakali.com/CommunityLinkups/dalits3.htm, ac- the subject of this paper have been changed in the interests of safe- cessed in November 2001. guarding their privacy. 22 Balmiki or Valmiki is the assumed name of the former sweeper 7 Indian schools are based on the British model. Schooling is fin- (Bhangi) caste of northern India. They have adopted the name after ished when students complete their 12th standard or 12th year, after the poet and author of the renowned Hindu “Story of Ramayana” which they can go either to university colleges or technical schools. or the Ramayana that dates from about the 3rd century BC. Follow- Completing the 9th standard is the equivalent to completing junior ers of Balmiki or Valmiki are often identified with the devotional school. It is doubtful that Situ’s mother actually completed the 9th stream of Hinduism known as bhakti, the bhakti tradition, which is

Harvard Asia Quarterly 36 Spring 2002 closely associated with low and even untouchable castes. The change saxakali.com/Saxakali-Publications/dalitwo2.htm accessed in No- of name occurred over a period of time from the turn of the twenti- vember 2001. eth century as part of the self-respect movement amongst the sweeper 37 Ibid. caste. 38 “Dalit Boy Marries Jat Girl, Community Bays for Blood”, The 23 The sweepers of India remain amongst the most despised and Statesman, 3 October 2001 from Dow Jones Interactive Database discriminated untouchable caste. Traditionally, their function was accessed in November 2001. to remove nightsoil, dead animals and other very dirty and highly 39 Bhuvaneshwar Prasad, “Livid at ‘Unholy Alliance’, Moral Guard- polluting tasks. As part of their attempt to gain respect, they changed ians Kill Couple”, The Times of India, 20 September 2001 from their names to Valmiki. Dow Jones Interactive Database accessed in November 2001 24 P. Sainath, “This is the way they go to school”, The Hindu, 28 40 In the case of the Brahmin community, this caste council is the November 1999 from Dow Jones Interactive Database accessed in Brahamana Samaj. See P. Sainath, “Four Weddings and a Funeral”, November 2001 The Hindu, 6 February 2000 from Dow Jones Interactive Database 25 The concept of the clean Hindu castes arises from the view that accessed in November 2001 the four Varna that make up the non-untouchable/non-tribal com- 41 This Valmiki tribe is not related to the untouchable, dalit Valmiki ponent of Indian society only suffer from temporary impurity and of northern India, but no doubt adopted the name Valmiki for the temporary ritual pollution. Such temporary impurity can be ex- same reason – to increase social respect in the eyes of Hindu soci- punged through prayer and ritual washing. The untouchables, by ety. contrast, are permanently unclean because they are permanently 42 The case above was reported by Parvathi Menon, “The States: polluted as a result of history, prejudice and some of the traditional Another Caste Crime”, Frontline, vol. 18, no. 19, 15-28 September tasks they used to perform. No amount of physical cleansing or 2001, http://www.hinduonnet.com/fline/fll11819/18190420.htm. prayer can remove their ritually permanent “unclean” or polluted The reporter noted the high failure rate of prosecutions by the state. Civil Rights Enforcement Cell in Bangalore under the Prevention 26 One reason for the involvement of dalits in traditional rituals of Atrocities Act of 1989. Between 1991 and June 2001 a total of was the belief that they had special connections with the under- 11,170 offences were registered. Of these 8,282 cases were charged world and were therefore better able to appease demons. In the late but the total number of convictions was only ten and after 1998 nineteenth century, the Madigas of Andhra Pradesh, for example, statistics about the number of convictions were not even available. were subjected to violence for their refusal to propitiate the evil These figures can be treated as one index of the failure of the In- spirits which afflicted village life. See Mendelsohn and Vicziany, dian justice system to deal with violent caste crimes. op.cit., p.85 43 Mendelsohn and Vicziany, op.cit., pp.266-267. 27 P. Sainath, “Whose Sacrifice is it Anyway?”, The Hindu, 6 Sep- tember 1998 from Dow Jones Interactive Database accessed in November 2001. 28 M. N. Srinivas, “The Social System of a Mysore Village”, in McKim Marriott (ed.), Village India, Chicago: University of Chi- cago Press, 1955, p. 17. 29 “Opposition Walkout in Rajasthan House”, Hindustan Times, 10 April 1999 from Dow Jones Interactive Database accessed in November 2001. This article concerns an incident to which the BJP responded by storming out of Rajasthan assembly in protest against the alleged indifference of the Congress Party. 30 Mendelsohn and Vicziany, op.cit., pp.51-53. 31 P. Sainath, “A Dalit by Any Other Name”, The Hindu, 17 Octo- ber 1999 from Dow Jones Interactive Database accessed in No- vember 2001. 32 Ibid. 33 Marika Vicziany 1983, “Below the Poverty Line: Musahar and Chamar Women in a Bihar Village”, Manushi, vol.4, no.1, Novem- ber-December, pp. 8-15. 34 Mark Fineman, “Death of a Martyr Shakes the Land of Untouch- ables”, Los Angeles Times, 14 May 1990, from Dow Jones Inter- active Database accessed in November 2001. 35 Subash Mishra, “Medieval Madness”, India Today, 29 Novem- ber 1999 from Dow Jones Interactive Database accessed in No- vember 2001 36 Moses Seenarine, “Dalit Women: Victims or Beneficiaries of Affirmative Action Policies in India – A Case Study”, Paper presented at a brown bag lecture held at the Southern Asian Institute, Columbia University, 10 April 1996. The study was conducted through the auspices of the Mahila Samakhya, a local NGO. The author notes in another paper that “One and a half centuries ago, my dalit fore parents left South Asian shores as indentured labourers bound for Caribbean plantations. Now, 150 years later, I was returning as an American graduate student on a year’s scholarship provided by the University of California, Berkeley…” in M. Seenarine, “Dalit Female Education and Empowerment”, Dalit In- ternational Newsletter, vol. 2, no. 1, February 1997 in http://

Harvard Asia Quarterly Spring 2002 37 THE THREAT OF “ISLAMIC TERRORISM”? A VIEW FROM SOUTHEAST ASIA

BY EVA-LOTTA E. HEDMAN n the aftermath of September 11, President George W. Bush promptly declared a “global war on terrorism” in which gov- Iernments around the world had but two choices: to be, in his words, Eva-Lotta Hedman is Research Fellow in Political “with us or with the terrorists.” Not surprisingly, this call from Washing- Studies at the School for Oriental and African ton D.C. focused attention on the reactions of the European allies under Studies in London. She is the co-author with John Sidel of Phillipines Politics and Society in the the security umbrella of the National Atlantic Treaty Organization (NATO) Twentieth Century: Colonial Legacies, Post- as well as on the predominantly Muslim nation-states in the Middle East, Colonial Trajectories (Routledge, 2000) and the Central and South Asia. The attacks and the ensuing sea-change in US guest editor of Human Rights Law Review foreign policy, however, have also had important, if highly variegated, (Special Issue: East Timor in Transition, 1999). implications for governments in the Association of Southeast Asian Na- tions (ASEAN). Indeed, both the Philippines and Indonesia were quickly identified by the Bush administration as potential sites for anti-terrorist intervention. Malaysia, on the other hand, is seen by Washington as something of an Islamic version of the “Third Way” between East and West, and between Muslim society and secular modernity. Finally, Thailand came under considerable pressure from the US government to abandon its adopted public stance of “neutrality” in favor of one more supportive of American foreign policy and military strategy. Such reassessments of the role and significance of these four “core” ASEAN states in international politics raise critical questions about the social landscapes and domestic politics that have contributed to the shaping of government policies and responses in Manila, Jakarta, Kuala Lumpur and Bangkok to the threat of terrorism in the name of Islam. In this regard, the historically strong bilateral ties that developed during the Cold War between many Southeast Asian governments and Washington, and the associated weakness of institutionalized regional frameworks, including ASEAN, further underscore the importance of focusing attention on such cross-country variations. Whether in the predominantly Muslim societies of Indonesia and Malaysia, or in the Philippines and Thailand, where Is- lam is relegated to “minority” status, the changing transnational environment after September 11 has spelled out very different constraints, challenges and opportunities. Such variations also provide a useful backdrop for any attempt at tracing the inroads made and difficulties faced by the wider transnational network of Al-Qaeda on the regional map of South- east Asia.

JIHAD IN SOUTHEAST ASIA?

After the September 11 attacks and the subsequent US bombing of Afghanistan, many observers were indeed dismayed that the calls for jihad against America reverberated throughout parts of Southeast Asia. Targeting the US embassies in Jakarta and Kuala Lumpur, for example, Indonesian and Malaysian Muslim radicals organized demonstrations that featured some protesters burning effigies of Bush and wearing t-shirts with pictures of bin Laden. While such demonstrations shocked the media and diplomatic circles, many observers have since stressed the limitations of popular support for anything akin to so-called “militant” Islam. However, there have also been numerous reports of the Al-Qaeda network attempting to establish linkages with local Muslim groups and individuals in Southeast Asia in the 1990s.1 In the case of the Philippines,

Harvard Asia Quarterly 38 Spring 2002 such efforts appear to have focused on the Abu Sayyaf recently, the uncovering of an alleged plot to target US military (“Bearer of the Sword”), based on the island of Basilan in and corporate facilities in Singapore has reportedly revealed the Sulu Archipelago, although recent reports have pointed links between Al-Qaeda and a local network of terrorists with to increasing evidence of Al-Qaeda ties with the much larger a leadership based in Malaysia. In short, an interlocking Moro Islamic Liberation Front (MILF). Having earned its directorate of Islamic terrorist groups was revealed to be reputation through a series of bombings, kidnappings and operating on a regional scale in Southeast Asia. Yet, as extortion, the Abu Sayyaf was allegedly founded by illustrated below, there is considerable variation across the Abdurajak Janjalani, a Libya-trained Filipino mujahideen region in terms of the opportunities and constraints faced by veteran of the Afghanistan war in the 1980s. In addition to such groups. its own predatory fund-raising activities, the Abu Sayyaf has also reportedly enjoyed the financial patronage of Osama bin THE PHILIPPINES Laden’s brother-in-law, Jamal Khalifa, through such non- governmental organizations as the International Islamic Relief In Manila, the official government response to the Organization (IIRO) and Mercy September 11 attacks and the International. Finally, it is believed subsequent “war on terrorism” was that Abu Sayyaf leaders and members one of immediate and full support for have received combat training in Al- An interlocking directorate of US military action. Indeed, president Qaeda camps in Afghanistan, as well Islamic terrorist groups was Gloria Macagapal-Arroyo promptly as from Al-Qaeda operatives in the revealed to be operating on a offered use of the very naval bases Philippines. regional scale in Southeast Asia. which the Philippine Senate had In an apparent attempt to expand closed to American forces in 1991. In the reach of Al-Qaeda into Indonesia, the weeks following the attacks, US two close associates of bin Laden, Ayman al-Zawahiri and officials started arriving in the Philippines to brief their the late Mohammed Atef, alias Abu Hafs, reportedly visited Filipino counterparts on terrorism. In November 2001, Maluku and West Papua in 2000. By July 2001, an Al-Qaeda Macapagal-Arroyo went to Washington to shake hands with envoy was said to be seeking to develop ties with several Bush on a $92 million military aid package, as well as a Indonesian groups, including the notorious Laskar Jihad personal pledge of support, for her government to step up (“Jihad Squad”) whose leader, Jaffar Umar Talib, allegedly “pacification” efforts in Muslim areas of Mindanao and the declined such overtures on the grounds that Al-Qaeda was Sulu Archipelago. During the last days of January 2002, some “too radical.” In the aftermath of the US bombing in 660 US soldiers, including 160 Special Forces, joined Afghanistan, Jaffar reportedly changed his mind and Philippine government troops in training exercises at a volunteered his Indonesian Laskar Jihad troops to fight for military base in the vicinity of Zamboanga City. In the Al-Qaeda. Meanwhile, according to Indonesian intelligence following month, the US Special Forces have joined sources, armed contingents of Al-Qaeda were training Laskar Philippine troops in military maneuvers on Basilan Island, Jihad forces in Maluku and the Central Sulawesi town of widely believed to be the base of operations for the Abu Poso. Finally, the Front Pembela Islam (“Front to Defend Sayyaf. Islam”) has reportedly received training from Al-Qaeda While the outcome of such joint US-Philippines military fighters in Afghanistan, as well as in Mindanao and on an operations remains to be seen, the short-term political unknown Indonesian island. considerations and the longer-term historical backdrop According to FBI reports, close bin Laden associate shaping this process are perhaps more readily discerned at Khalid al-Midhar reportedly met with other bin Laden this stage. First of all, the irregular transfer of power from followers in Malaysia in January 2000. In the next few months, previous President Joseph Ejercito Estrada by means of so- Malaysia witnessed a series of bank robberies, killings and called “People Power” protests in January 2001 left his kidnappings by the “Jihad gang” and a major arms heist at successor (and former vice-president) Macapagal-Arroyo in Gerik, Perak carried out by another so-called militant Islamic an unusual position vis-à-vis other civilian politicians, as well group, the al-Maunah, in June 2000. After their capture on as the military top brass, for purposes of consolidating her June 7, 2000, members of the “Jihad gang” reportedly government. Indeed, the new President’s efforts to secure a revealed prior experience as mujahideen in Afghanistan, and broader popular mandate in the May 2001 local and Senatorial as students at Islamic universities and madrasahs in Pakistan, elections were made more difficult by entrenched politicians Egypt and the Arab states. By August 2001, the Malaysian who remained loyal to Estrada. At the same time, Macapagal- government had detained ten Islamist activists due to alleged Arroyo also initiated a major reshuffling in police and military involvement with a clandestine group called the Kumpulan ranks to replace key Estrada appointments. In this context, it Mujahidin Malaysia (KMM, or the Malaysian Mujahideen was no coincidence that she opted to reverse Estrada’s Movement). In the same month, the government warned that declared “all-out war” strategy against the Moro Islamic underground networks of “Islamist militants” were operating Liberation Front (MILF) and, after months of negotiations in the cross-border regions between Malaysia, Indonesia, the and informal arrangements, signed a formal ceasefire in Kuala Philippines and Thailand. Indeed, visitors to the southern Lumpur on August 7, 2001. In another important reversal of provinces of Thailand, where an Islamic separatist movement government policy under Macapagal-Arroyo, key political once claimed considerable popular support, noted a surge of support was subsequently withdrawn from the Moro National local interest in bin Laden and his jihad campaign. More Liberation Front (MNLF) leader Nur Misuari as Governor

Harvard Asia Quarterly Spring 2002 39 of the Autonomous Region of Muslims Mindanao (ARMM).2 elected officials at the municipal, gubernatorial, and congres- Second, there is a more protracted history of “internal sional level. Local economic activities – legal and illegal – colonization” of the Islamicized southern parts of the Philip- likewise link MILF commanders and their troops to govern- pines, begun under Spanish and then American colonial aus- ment programs (such as road construction) and private busi- pices, and continuing into the post-colonial period of what is nesses (such as smuggling) in ways that draw them into the sometimes referred to as “Manila imperialism.” Inasmuch as status quo and discourage outright rebellion or “Islamic ter- Spanish colonization focused on evangelization, for example, rorism.” Overall, the MILF appears to operate less as an the Muslim – or, in local parlance, “Moro” – population of armed separatist movement and more as a shadow govern- Mindanao and the Sulu Archipelago found itself at a distinct ment of sorts. It coexists, however uneasily, with the struc- disadvantage in terms of cultural assimilation, capital accu- tures of the ARMM and the Philippine Republic, and en- mulation, and political integration. In many ways, this pro- gages in conflicts with government forces over turf along the cess of internal colonization gained further momentum in the lines of a local protection racket rather than an insurgent army American period due to the deferred expansion of Philippine or a terrorist group. colonial democracy into the During the final year of Estrada’s Islamicized south compared to else- beleaguered presidency, certain where in the country. Finally, the long developments contributed to the authoritarian reign of Ferdinand E. The “war against terrorism” in reactivation of the “Muslim threat” Marcos (1972-1986) interrupted the Basilan is only a part of the larger to political stability in Mindanao and integration of Muslim Mindanao and process of bargaining between the Sulu Archipelago. First of all, in the Sulu Archipelago into the electoral Manila politicians and various an important departure from prior politics of the post-colonial Philip- Muslim groups in the southern frequent but limited breaches by both pines, thus encouraging local politi- Philippines. sides, the Estrada government cians to sponsor a Muslim Indepen- launched full-scale military dence Movement, as well as the arm- campaigns against MILF camps in ing and training of Muslim guerrilla fighters in the 1970s. Mindanao in May 2000, thus prompting the collapse of the In the Islamicized parts of Mindanao and the Sulu Cessation of Hostilities Agreement of July 1997. After a five- Archipelago, local resistance to the martial law regime year interlude, moreover, the Abu Sayyaf resurfaced with a converged upon the Moro National Liberation Front (MNLF), series of widely publicized kidnappings of foreign tourists in under the leadership of Nur Misuari. By the mid-1970s, the 2000 and 2001. Meanwhile, there was a deepening sense that armed conflict in Muslim Mindanao and the Sulu Archipelago the central government in Manila had failed to deliver on the had claimed as many as fifty thousand lives, displaced terms agreed upon under the ARMM accords in 1996, thus thousands of families, and caused extreme hardship for many slowly eroding the political clout of its governor, MNLF residents of the southern Philippines. Even after the Tripoli leader Nur Misuari. Accord of 1976, the government’s promise of regional Having thus inherited a reactivated armed insurrection autonomy, and the MNLF’s agreement to call a cease-fire, and terrorist threat in Mindanao and the Sulu Archipelago, pockets of Muslim Mindanao and the islands of the Sulu the new administration in Manila under Macapagal-Arroyo Archipelago remained in the hands of the MNLF or splinter moved swiftly and decisively in the aftermath of September groups like the MILF. Occasional clashes between Armed 11. With minimal risk of a political backlash reaching pre- Forces of the Philippines (AFP) troops and Muslim rebels dominantly Catholic Manila, the Macapagal-Arroyo govern- continued over the years. ment seized the opportunity to attract more US military as- Muslim Mindanao and the Sulu Archipelago were known sistance and other support. Without the kind of nationalist- to be the among the most dangerous areas of the Philippines left opposition which helped end the US-Philippine bases well into the 1990s, with kidnappings, killings, and assorted treaty in 1991, Macapagal-Arroyo has effectively reversed acts of violence occurring with greater frequency and impu- that decision and also arranged with Washington for joint nity than elsewhere in the archipelago. Such problems have military training and other maneuvers with Philippine and persisted to this day, despite the peace accord of 1996, which American troops. saw the demobilization of the MNLF in exchange for the In view of the highly publicized violence of the Abu empowerment of the Autonomous Region of Muslim Sayyaf, as well as the numerous reports of Al-Qaeda linkages Mindanao (ARMM) and other bodies, the election of MNLF and sightings in the country, it is perhaps unsurprising that leader Nur Misuari as ARMM governor, and the integration the administrations in both Manila and Washington deem the of many MNLF troops into the Philippine National Police southern Philippines an important target in the “war against and the Armed Forces of the Philippines. The MILF, which terrorism.” However, it is important to recognize that split off from the MNLF in the late 1970s, still claims sub- Macapagal-Arroyo also faces a more protracted struggle for stantial influence and commands large numbers of troops in “hearts and minds” in Muslim Mindanao and the Sulu the provinces of Cotabato, Maguindanao, and Sultan Kudarat, Archipelago. In this regard, it remains unclear what may and fighting between MILF forces and local police and mili- follow from her courting supporters from among competing tary units has occurred sporadically as well as periodic threats MNLF factions, thus provoking the ill-fated return to armed of a more sustained conflict. struggle by MNLF founding leader Misuari in early 2001. In At the same time, the MILF is clearly involved in local this context, the “war against terrorism” in Basilan is only a elections and amply represented, indirectly or otherwise, by part of the larger process of bargaining between Manila

Harvard Asia Quarterly 40 Spring 2002 politicians and various Muslim groups in the southern associated with organized Islam in Indonesia. Indeed, these Philippines. At the same time, there are many questions as to were the politicians who prevented Megawati from assuming the limits of the Macapagal-Arroyo administration’s efforts the presidency in the 1999 MPR session despite her party’s to bring increasing numbers of MILF supporters into the orbit plurality in the elections a few months earlier, and whose of the ruling political coalition. cooperation was necessary for her to replace Abdurrahman Wahid during the MPR session in mid-2001. INDONESIA Viewed more closely and in context, however, neither the much-feared threat of “Islamic Terrorism” nor the often In contrast with the Philippines, the Indonesian lamented vagaries of Indonesian government policy are cause government response to the US-led “war against terrorism” for excessive alarm. In fact, groups like Laskar Jihad and was much more equivocal. While condemning the September Front Pembela Islam represent not the rise of an insurgent 11 attacks, Indonesian President Megawati Sukarnoputri Islam in Indonesia but the declining fortunes of the most publicly expressed reservations about the American bombing militant Muslim forces in the country in the past few years. campaign in Afghanistan. Anti-US Strident advocates of Islamicization in protests and threats of “sweepings” Indonesia enjoyed unprecedented (i.e. round-ups) of American citizens freedom and access to state patronage by militant Islamic groups in Armed activity in the name of in the last years of the Suharto era and Indonesia heightened concern in Islam represented desperate rear- the brief Habibie interlude, as Washington. By early 2002, bellicose guard reactions to a sudden elements in the government sought to statements by US Deputy Defense reversal of political fortunes for use the banner of Islam – and various Secretary Paul Wolfowitz – a vocal militant Islamic groups. groups dedicated to the promotion of advocate of military action and a the faith – to champion the interests former ambassador to Indonesia – and aspirations of an ascendant suggested that American pressure on Jakarta to crack down modernist Muslim middle class, and to defend themselves on Islamic groups allegedly linked to the Al-Qaeda network against a rising tide of political opposition. Thus, militant was intensifying. As of this writing, however, there is no Islamic groups rallied behind the Suharto government when evidence of new government moves against the small pockets it ousted Megawati Sukarnoputri from the PDI-P leadership of armed Islamic activity exemplified by Laskar Jihad. in 1996, joined in the government’s anti-Chinese campaign At first glance, this apparent lack of action against during the economic crisis in early 1998, and provided “shock “Islamic terrorism” in Indonesia seems to reflect the troops” to counter anti-Habibie demonstrations in late 1998 sensitivity of the government to a predominantly Muslim and early 1999. population and political forces – both civilian and military – As for Laskar Jihad itself, this group was formed in that are hostile to US foreign policy aims in the Middle East January 2000 after the fall of Habibie and more than one and the Muslim world in general. Indeed, Megawati’s own year after Abdurrahman Wahid’s presidency. The leader of political party, Partai Demokrasi Indonesia-Perjuangan (PDI- the “traditionalist” Islamic association Nahdlatul Ulama, P or the Indonesian Democratic Party of Struggle), commands Wahid had long promoted multi-faith religious tolerance and only a plurality of seats in the parliament, and she rose to the pursued alliances with Christians and secular nationalists presidency in mid-2001 through backroom-dealing with a against the threat to his constituency represented by modernist coalition of other parties, among which various Islamic Islam. His rise to the presidency was thus viewed as a major organizations and interests were well-represented. setback to the cause of promoting Islam in Indonesia, and his Her own vice-president, Hamzah Haz, is the head of the efforts to protect Muslims in areas of inter-religious conflict United Development Party (PPP or Partai Persatuan like Maluku and Central Sulawesi were seen as woefully Pembangunan), the single most popular Islamic party in the inadequate by those who claimed to represent the faith. Thus, country, and her ministers of defense and justice are leaders anti-Wahid politicians rallied behind the cause of jihad in of other Muslim parties. More importantly, perhaps, the the mosques of Jakarta in early 2000, and anti-Wahid elements speaker of parliament, Akbar Tanjung, is a former leader of in the military establishment aided the armed teams of Laskar the influential Muslim university student association HMI Jihad dispatched to Maluku to assist their co-religionists (Himpunan Mahasiswa Islam) and the head of Golkar, the against armed Christian attacks. second strongest political party. The head of the People’s Overall, these forms of armed activity in the name of Consultative Assembly or MPR (the supra-parliamentary Islam represented desperate rear-guard reactions to a sudden body which elects the president and vice-president) is Amien reversal of political fortunes for militant Islamic groups in Rais, the former chairman of the influential modernist Muslim 1999. In the June 1999 elections, the parties representing association Muhammadiyah and the head of another modernist Islam performed poorly compared to parties like predominantly Muslim party, PAN (Partai Amanat Nasional PDI-P, Golkar, and those parties like PPP and Wahid’s PKB or National Mandate Party). Because these politicians control which drew strength from a “traditionalist” Islamic constitu- large blocs of votes in the parliament, the MPR, regional ency. While modernist Muslims had experienced an unprec- assemblies, and the Cabinet, and has sympathizers in various edented surge of upward social mobility and enhancement of echelons of the civilian bureaucracy and the military access to state patronage in the late Suharto era and the brief establishment, they are in a position to make trouble for any Habibie interlude, they remained a small, privileged minor- government that ignores those interests and aspirations ity of urban middle class, university-educated professionals

Harvard Asia Quarterly Spring 2002 41 in a country whose population remained overwhelmingly attract popular support. The calls for jihad in Maluku and in poor, illiterate and unschooled in the modernist notions of the mosques and religious schools of Jakarta and other what it meant to be a “proper” Muslim. Thus with the turn to Indonesian cities and towns in early 2000, inspired only a competitive elections in 1999, modernist Muslim parties were few thousand Muslims to join Laskar Jihad and other groups. greatly disappointed to find that their constituency was far The small-scale anti-US protests in Jakarta and elsewhere in smaller – and more divided – than their leaders had hoped the country in late 2001 likewise fizzled. To be sure, there and claimed over the years. In contrast, parties representing are small numbers of Muslim preachers, teachers, students, more traditional, more syncretic, and more ecumenical ap- and activists in Indonesia who are deeply disappointed with proaches to religion were in the ascendance. Those small the lack of momentum towards a more “genuinely” Islamic groups working to promote a more thoroughgoing society and state in the country, and who draw support, Islamicization of Indonesia, who had enjoyed shelter, sup- encouragement, and inspiration from militant Muslim groups port, and a sense of entitlement in the late Suharto era and in the Middle East. In addition, there are politicians in regional under Habibie, now found themselves facing a much more assemblies and the national parliament, and military and uncertain future. police officers as well, who turn a blind eye – or lend a helping Indeed, Megawati Sukarnoputri’s rise to power has hand – to such activities in the hopes of short-term political represented the culmination of these downward trends for or pecuniary advantage. There must also be elements in the modernist Islam in general, and for militant Islamic groups ruling political elite and the military and intelligence in particular. Like her father’s Partai Nasionalis Indonesia, establishment who find the existence and activities of groups Megawati’s PDI-P has emerged as a political machine capable like the Laskar Jihad useful, to justify security measures and of attracting millions of Indonesians of diverse faiths and to expedite and expand the resumption of US military backgrounds through a combination of patronage and populist assistance to the Indonesian Armed Forces. Yet in the most appeal. Since her assumption of the presidency, the party’s populous Muslim country in the world, what is most striking prospects for future electoral victories have only been is not the strength and growth of “Islamic Terrorism” but its strengthened. While capturing the vote of millions of ordinary, decline and weakness. nominally Muslim voters, the PDI-P has also – from its inception in the early 1970s as a forced fusion of Christian MALAYSIA AND THAILAND and secular nationalist parties – represented small but influential pockets of Protestant and Catholic voters around In contrast with the Philippines and Indonesia, the threat the archipelago, and it enjoys generous support from ethnic of “Islamic terrorism” has appeared much less menacing in Chinese businessmen as well. Megawati and the PDI-P are Malaysia and Thailand. The Malaysian government has also thus not only much more inclined towards an alliance with steered a careful course in staking out its official positions traditionalist Muslims who are more syncretic in their on international terrorism and US foreign policy. Prime Min- religious practices and preferences than most modernists, but ister Dr. Mahathir Mohamed issued an early condemnation also sympathetic to the concerns of Indonesia’s small of the September 11 attacks, accompanied by public condo- Christian minority. In Maluku, where violence between armed lences to the victims’ families. Within a day of the start of groups of Christians and Muslims has claimed thousands of the US-led military campaign in Afghanistan on October 7, lives since 1999, the ruling PDI-P is overwhelmingly however, Mahathir told a press conference held in Parlia- Protestant, as it is in violence-torn Poso, Central Sulawesi, ment that he had strong reservations about the wisdom and where Laskar Jihad has also sent its troops. In a much- effectiveness of fighting terrorism with war. While giving publicized incident in late 2001, Laskar Jihad elements voice to wider concerns about attacks on Islam and Muslims clashed with PDI-P forces in the East Javanese town of Ngawi, around the world, Mahathir also swiftly declared Malaysia in a conflict that pitted local protectors of illegal gambling an “Islamic state” – albeit one characterized by political sta- operations against the promoters of a stricter observance of bility, economic prosperity and a “plural society.” the fasting month of Ramadan. Whether viewed from the perspective of international Against this backdrop, it is clear that Megawati and the relations or domestic politics, Malaysia presents perhaps the PDI-P have faced Laskar Jihad long before the September most dramatic instance of a reversal in the political fortunes 11 attacks on New York City and Washington D.C. Indeed, of the incumbent regimes surveyed here, at least in the short- as Megawati’s influence in the military establishment – and to medium-term after September 11. In a world seemingly the inevitability of her rise to the presidency – grew in early besieged by so-called “Islamic terrorism,” Malaysia’s 2001, government security forces launched a crackdown on renewed significance as a moderate and progressive Muslim Laskar Jihad in Maluku and elsewhere in the country. In nation-state quickly overshadowed prior international Ambon, the provincial capital of Maluku, Army troops shot criticisms against the Mahathir government for its imperious dead more than a dozen Laskar Jihad members, and leaders handling of the 1997 financial crisis and of the 1998 protest of the group soon found themselves under arrest and facing movement in Kuala Lumpur demanding Reformasi prosecution for various offences. Security measures and (government reforms). Indeed, during their first meeting after civilian conflict resolution efforts in both Maluku and Poso the terrorist attacks at the APEC summit held in Shanghai on have worked to prevent Laskar Jihad from turning popular October 20, President Bush reaffirmed the US government’s sentiments against local Christian communities. appreciation for the support shown by the Mahathir More generally, the promotion of a stricter, “purer” and administration, especially in the face of challenges from the more state-backed form of Islam in Indonesia has failed to domestic political opposition, the Pan-Malaysian Islamist

Harvard Asia Quarterly 42 Spring 2002 party (PAS). Both leaders reportedly agreed to increase trade questions about variations across different national contexts. as well as security cooperation. In Southeast Asia, there are considerable differences across The ruling United Malays Nationalist Organization the region. Moreover, there is only a relatively weak regional (UMNO), under Mahathir’s leadership since 1981, has also infrastructure in place for articulating responses to interna- gained much domestic political capital as its main contender tional shocks, as evidenced in the aftermath of both the 1997 for the majority Malay-Muslim vote, PAS, openly declared financial crisis and the 2001 terrorist attacks. Since Septem- support for jihad against the US and other Western powers. ber 11, the Philippines, Indonesia and Malaysia have report- After two decades of intensifying competition over the Malay- edly started exploring the possibility of establishing an intra- Muslim vote, PAS in many ways emerged the primary regional framework for sharing intelligence on terrorist ac- beneficiary of the political fallout from the 1997-98 economic tivities, controlling cross-border flows of weapons, and un- crisis. This was evidenced by unprecedented gains in dertaking joint law-enforcement operations. However, the subsequent elections, both nationally and at the state level, nature and direction of any such regional or transnational most notably in the state of Kelantan, which they now control. efforts are necessarily contingent on the complexity of short- However, the position of PAS in the aftermath of September term political considerations of ruling parties or coalitions, 11 alienated many Malays who had lent their support in as well as the long-term trajectories of Muslim movements previous elections as a “protest vote” against UMNO rather and splinter groups. than as an endorsement of the country’s Islamicization. As a result, Mahathir was allowed to play the time-honored role of “middle-of-the-road” consociationalist, promoting “moderate” Malay sentiment against the threat of Islamic ENDNOTES extremism both for Malays, non-Malays whose support for UMNO, and its Chinese and Indian partners in the National 1 See, for example, Rohan Gunaratna, “Al-Qaeda’s infrastructure Front (Barisan Nasional) in the last elections. in Asia,” Jane’s Intelligence Review, January 1, 2002. The If Malaysia has witnessed the most obvious of political following brief account of Al-Qaeda’s ‘outreach’ into Southeast realignments in the region since September 11, then perhaps Asia draws heavily on this article. 2 Thailand represents the opposite end of this spectrum. Despite For historical background on the MNLF and the MILF, see especially, Thomas M. McKenna, Muslim Rulers and Rebels: prime minister Thaksin Shinawatra’s public proclamation of Everyday Politics and Armed Separatism in the Southern “neutrality” in the US war on terrorism, there is little to suggest Philippines (Berkeley: University of California Press, 1998). any significant changes in relations between Bangkok and Washington over the past several months. While the Bangkok media was debating whether any assistance should be extended to the US-led military campaign, for example, the Thai government continued to grant the US full access to the U-Tapao airbase as per existing treaty obligations. Indeed, the Thai government had reportedly obliged all US requests for support from the outset, public declarations to the contrary. In contrast to the governments in Manila, Jakarta and Kuala Lumpur, the Thaksin administration has refrained from any attempts to step up military campaigns or otherwise in- tensify pressure upon the various slumbering separatist movements and small Islamic groups in southern Thailand. In addition to the two major Muslim separatist movements – the Pattani United Liberation Organization (Pulo) and the Barisan Revolusi Nasional (BRN) – there are also reports of Gerakan Mujahedin Islam Pattani (Pattani Mujahedin Islamic Move- ment) and some 40 splinter groups of the Pulo and the BRN. While relatively small-time compared to their counterparts in the southern Philippines, these groups have been linked to various incidents of political violence, including some bombings during 2001. However, perhaps their comparative in- significance, in combination with the much bigger stakes of gaining an electoral foothold in the predominantly Muslim south, cannot but deter Thaksin and his party from focusing international as well as domestic attention on any would-be threat of Islamic terrorism.

CONCLUSION

As suggested by this brief overview, the notion of “global war” and the threat of “Islamic terrorism” beg further

Harvard Asia Quarterly Spring 2002 43 Harvard Asia Quarterly 44 Spring 2002 KOREA’S NEW DEVELOPMENT PARADIGM PREMIER BUSINESS AND CULTURAL CENTER IN ASIA

BY KIHWAN KIM here is little question that South Korea is in need of a new development paradigm. The old paradigm of the developmental state no longer serves, as the economy has become far too large and its Kihwan Kim is Chairman of the Seoul Financial T structure far too complex for the government to intervene in the activities Forum and Korea National Committee for Pacific Economic Cooperation. He also serves as of private sector on a regular basis. Moreover, in the new era of the WTO, International Advisor to Goldman Sachs. the rest of the world simply will not permit Korea to pursue what amounts to a mercantilist policy of development. It can also be argued that the fundamental cause of the 1997-98 financial crisis was the country’s failure to discard its old paradigm in time and adopt a new one appropriate to a changing global environment. There is one other compelling reason for Korea to adopt a new paradigm. Over the past four years, Korea has implemented many reforms not only to overcome the 1997-98 crisis but also to regain international competitiveness. To this day, however, it is not at all clear that the country has achieved this goal. Korea has yet to implement many reforms to remove the institutional weaknesses that brought about the crisis in the first place. This shortcoming is due in no small measure to Korea’s failure to design and implement reforms in a consistent and sustained fashion. This failure, in turn, can be traced to the absence of a clear vision and overall strategy for the nation’s long-term development.

ABSENCE OF A VISION

Korea has been without a clear vision for national development for quite some time. Looking back on the history of Korea’s modern economic development, it was during the 1960s and 1970s that Korea had a vision that was capable of mobilizing its people. At that time, President Park Chung Hee provided a powerful vision called the “modernization of the fatherland.” It was easy to see why this was so powerful. Koreans then knew all too well that the primary cause for the great hardship they suffered under Japanese colonial rule was their failure to modernize as the Japanese had done. Thus, Park’s vision was synonymous with a call not only to catch up to but also to get ahead of Japan. Due to the great humiliation that the Koreans had experienced under the Japanese, any idea that even remotely suggested overtaking Japan was enough to energize the whole nation. Park not only came up with this powerful vision, but also presented a concrete export-led development strategy to realize it. Unfortunately, subsequent administrations have failed to do the same. During the presidency of Chun Doo Hwan (1980-88), the stated goal of national development was “building an advanced nation.” This vision was at best a mechanical extension of Park’s “modernization of the fatherland.” What was lacking was any mention of a particular benchmark country or countries for comparison, the absence of which made the motivation of ordinary Koreans difficult. There were greater problems with the vision presented by the suc- ceeding Roh Tae Woo Administration (1988-93). President Roh presented the extremely vague expression “regaining national self-respect” as the goal for national development. It was no doubt meant to instill a sense of pride in the Korean people, especially on the basis of their dazzling economic achievements over the preceding decades, but it failed to signal

Harvard Asia Quarterly Spring 2002 45 any direction for the country. words, for some time to come, the Korean peninsula will be The vision presented by the Kim Young Sam govern- looked upon as an ideal place for economic activities and ment (1993-98) was even more problematic. In the early international commerce, rather than a strategic place in terms months of the administration, “building a new Korea” was of military planning and the actual conduct of war. touted as a national vision. However, apart from the message The other major opportunities and challenges to be taken implicit in the act of removing many of his opponents, in- into account have to do with globalization, which has been cluding high-ranking military officers, the administration accelerated by rapid development in information technology failed to specify what the president meant by a “new Korea.” (IT). As globalization and the IT revolution progress, na- To make matters worse, the administration’s goal for national tional borders will increasingly cease to be barriers to the development kept changing. For the first year, it was “a new movement of final goods and services as well as to many Korea”; for the second, it was “internationalization”; for the factors of production, including capital, technology, and third, “globalization”; and for the remaining years of the ad- highly trained manpower. ministration, the goal was “righting the wrongs of history.” Even as globalization proceeds, however, some factors Needless to say, it was very difficult to of production cannot easily move from manage national affairs in a consistent one country to another. They are the poli- and effective manner under these shift- cies and institutions of a country and its ing goals and priorities. Korea has been without a physical environment. Hence, if in the What about the vision for national clear vision for national course of globalization a country fails to development presented by the current ad- development for quite some make itself attractive to economic play- ministration led by President Kim Dae time. ers by upgrading its policies, institutions, Jung? During its first year in office, the and physical environment, the country administration’s vision was “the parallel will not only fail to draw capital, tech- development of democracy and a market economy.” How- nology, and highly trained professionals from abroad, but it ever, as unemployment rose in the course of overcoming the will also be unable to retain them domestically. This will rel- financial crisis, the administration found it necessary to in- egate the country to a cultural and economic backwater. By clude a new objective in its vision, namely “productive wel- the same token, if a country succeeds in making itself attrac- fare.” To be sure, the explicit incorporation of both democ- tive through policy reforms and environmental improvements, racy and market economy in the vision for national develop- capital, technology and highly trained manpower will flow ment marked an advance over the previous administrations. in, making the country a vibrant center of economic activity. This does not mean, however, that Kim Dae Jung’s vision is In short, what Korea ought to do in this century is to without problems. The triad of ideas is far too abstract for make good use of its new geopolitical environment as well ordinary Koreans. What is more, the first two concepts in as the new opportunities brought about by globalization. The particular represent universal values being pursued in all strategy Korea should follow to achieve this objective is to developed countries. Thus, they fail to take into account the position itself, first, as a new business center in Asia and unique challenges and opportunities facing Korea at this par- ultimately, for the whole world. This is the new development ticular point in its history. In addition, there are grounds to paradigm for Korea. believe that a market economy and productive welfare are incompatible. While a market economy aims to achieve maxi- NEW PARADIGM FOR KOREA mum efficiency, productive welfare – the term “productive” notwithstanding – seeks to achieve greater equity by distort- What is a business center? More than anything else, it ing market mechanisms. is a convenient place to do business, particularly international business, because of its institutions, high quality of NEW CHALLENGES AND OPPORTUNITIES manpower and agreeable physical environment. It is also a place that supplies high value-added goods and services that What are the particular challenges and opportunities are indispensable to its neighboring countries in several key faced by Korea in its effort to formulate a new vision and a areas, such as finance, trade, media, data processing, research paradigm for development at this juncture? Basically, they and development, high-tech manufacturing, logistics, tour- are two-fold. The first concerns Korea’s new geopolitical ism and engineering. Owing to the high degree of freedom environment. Although there are still many remnants of the for economic activities it provides, a business center also Cold War on the Korean peninsula, Korea’s geopolitical en- serves as a leader in entrepreneurship, innovation and tech- vironment is undergoing fundamental changes. Virtually all nological development for neighboring countries. At present, of the major countries surrounding the Korean peninsula, there are two such business centers in Asia: Singapore and including China and Russia, are now placing the highest policy Hong Kong.1 priority on economic development and improving the stan- A business center gives rise to many benefits for its dard of living for their people. Even more importantly, they population, one being economic. Per capita income of a have chosen to achieve this goal through the expansion of business center is usually very high compared to its neigh- trade and investment rather than through war and territorial bors due to its high value-added economic activities. With acquisition, as they did in the past. In this new environment, its leadership in innovation and entrepreneurship, a busi- the strategic value of the Korean peninsula is to be assessed ness center also enjoys abundant opportunities to earn many more in commercial terms than in military ones. In other kinds of economic rent.2 This, in large measure, explains

Harvard Asia Quarterly 46 Spring 2002 why per capita GDP of a country like Singapore was close or more, including mega-cities such as Tokyo, Osaka, Shang- to US$27,000 in the year 2000, a figure at least seven times hai, Beijing, Tianjin, and Chongqing, are located within three higher than that of neighboring Malaysia and forty times and a half hours of Seoul by air. What all this means is that higher than Indonesia for the same year. as a business center, Korea will soon have the world’s larg- The other major benefit of being a business center has est market in its hinterland. to do with national security. Since a business center sup- Korea’s domestic conditions for becoming a business plies neighboring countries with indispensable goods and center are equally favorable. Thanks to the high value Koreans services, its peace and stability are important to everyone in place on education, the quality of Korea’s workforce is rapidly its vicinity. In addition, since many multinational corpora- improving. As of the year 2000, over 22% of Korea’s labor tions from industrially advanced countries locate their re- force consisted of college graduates, and the percentage of gional headquarters in the business center, their home coun- high school graduates obtaining tertiary education was about try governments take great interest in the peace and stability 70%, which was higher than the figure in the US and second of the center. This explains in part why a city state like only to that in Israel. Hence, Korea’s workforce will soon be Singapore has prospered without seri- one of the most highly educated in the ous threats to its national security, al- world. though it has not spent an inordinate Korea is also investing heavily in amount of money for national defense. Korea’s conditions for the infrastructure that is essential to its For Koreans who cannot do anything becoming the premier becoming a business center. To cite just about their physical location between business center in Asia are a few examples, deep-sea ports on the China and Japan, two major powers very favorable. southern coast, particularly Pusan and whose actual or potential military capa- Kwangyang, are being improved. bilities will always surpass those of Construction of a high-speed railway Korea, this benefit of being a business center takes on spe- between Pusan and Seoul is underway. Furthermore, the new cial significance in terms of national security. international airport at Inchon was opened in March 2001. The airport, when fully completed, will be the largest hub KOREA’S POTENTIAL AS A BUSINESS CENTER airport in Asia. Korea’s telecommunication infrastructure is also second to none in Asia and it is a leader in the use of The critical question then is whether or not Korea has Internet technologies. With three-quarters of Korean the potential to become the premier business center in Asia. businesses connected to the Internet and over two-thirds of The short answer is “yes.” Korea’s conditions, both internal stock transactions being conducted online, Korea is ahead of and external, are very favorable. Speaking of external con- other countries in Asia in the conduct of business activities ditions first, tensions on the Korean peninsula have signifi- on the Internet. Korea is also far ahead of other Asian nations cantly eased since the end of the Cold War. There are no in the use of the Internet in general. According to an estimate longer any countries that support a North Korean military by Goldman Sachs, the percentage of the population using adventure against the South. To be sure, it is in China’s in- the Internet regularly last year was over 51% in Korea terest to keep North Korea communist for some time to come. compared to 40% in Taiwan, 29% in Japan, 24% in Hong Likewise, Russia will want to continue to give support to Kong and 21% in Singapore.3 Over 63% of Internet users in North Korea because it wants to regain its influence over Korea have access to broadband, high-speed Internet service, the Korean peninsula. One thing is very certain, however: making the percentage of the population using this service neither China nor Russia will want to extend unqualified the highest in the world. support to North Korea in total disregard of their existing Korea is also richly endowed with cultural resources, economic and political relations with South Korea. More- especially compared to other business centers in Asia. This over, it is not unreasonable to expect that the talks between is particularly true in the area of performing arts. Korea’s the US and North Korea, which have stalled since the ad- traditional Samulnori seldom fails to captivate audiences from vent of the Bush administration, will resume sooner or later, around the world. Korea also has produced numerous world- notwithstanding the September 11 terrorist attacks. When class violinists, pianists, cellists and opera singers, including that happens, military tensions on the Korean peninsula will the Chung siblings, Keunwoo Paik, Hanna Chang and Sumi ease even further. Jo. Encouraged by the success of these artists, thousands of With all major powers in Northeast Asia giving priority Korean families have sent their children to leading music to economic development rather than strengthening military and art schools all over the world, and many have already capability, the volume of trade among countries in this re- returned to Korea to pursue their careers. But unfortunately, gion will continue to expand. Now that China is in the WTO, some of them have yet to find opportunities to demonstrate Northeast Asia, which has 25% of the world population and their talents, thus creating a sort of excess capacity in this accounts for 22% of global GDP, is likely to emerge as the field. Korean movies have also come of age, winning many most dynamic economic region in the world. Given the high international prizes and recognition. Lately, Korean pop songs growth rates achieved in Northeast Asia compared to those have become very popular in China and Southeast Asian in the rest of the world in recent years, it is not unreasonable countries, and even in Japan. Thus, if only political and to project that this region’s share of world GDP will increase business leaders in Korea can be persuaded to undertake a to about one third in the next ten years. It is also noteworthy little more investment in these fields, especially in physical that no fewer than 43 cities with a population of one million infrastructure, Seoul in particular could well emerge not just

Harvard Asia Quarterly Spring 2002 47 as a business center in the league of Hong Kong and Singapore Completing the Four Sector Reforms but also as an exciting cultural center à la Vienna or New York. In order to change policies and institutions, Korea should first complete, in a focused and systemic way, the ANY OBSTACLES? implementation of the reforms started by the Kim Dae Jung government in four sectors: financial, corporate, labor and There are, of course, some conditions that are not entirely government. favorable for Korea’s emergence as a business center. Some In the financial sector, three major issues have yet to be point out that the low level of English proficiency in Korea addressed. Although the amount of non-performing loans will be an obstacle. This problem, however, should not be carried by financial institutions has been reduced significantly, exaggerated. When Singapore set out to become a business this problem requires continued attention. Due to the center in the late 1960s, there were at most 100,000 remaining non-performing assets, the rates of return on Singaporeans, or about 5% of the total population, who were investment in the financial sector remain low by international comfortable with the English language. There are no reliable standards. The second problem yet to be addressed has to do statistics as to how many Koreans have a good command of with the optimal scale of financial institutions. Considering English. Nonetheless, it is encouraging that Koreans of all the impact of the IT revolution, not a single bank in Korea is ages are eager to learn English, and with today’s IT large enough to exploit the full economies of scale. The third technologies coupled with the influx of American culture, issue concerns the state of the nation’s capital market. Over learning English is no longer as difficult as it was in the past. the past two years, the government had to intervene a number Some believe that Koreans are far too inward-looking in of times to help roll over a large amount of the bonds issued orientation. The point made in this regard is that due to their by private corporations in the wake of the financial crisis. long history as an inward-looking nation – having earned Although the Korean stock market has shown a remarkable the dubious reputation as the “Hermit Kingdom” – Koreans recovery over the past several months, the market is not ready will have difficulty living and working with foreigners. As to absorb a substantial placement of new equities. with the previous point, one should not push this argument Thus, what the government has to do in the financial too far. It is not true that Korea has been inward looking sector is clear. It should provide more incentives for financial throughout its entire history. In the periods when it was, the institutions to take the initiative in compelling non-viable orientation was not Korea’s own choice. It was imposed by firms to exit. One way to do so is to inject additional public the Chinese empire, much as Eastern European nations were funds in order to bolster the capital positions of financial cut off from the rest of the world by the Soviet Union in the institutions, although this would be highly unpopular post-World War II period. politically. With regard to the need to attain economies of In any event, Korea’s inward orientation began to erode scale, the government has so far relied mainly on its role as a during the Korean War. In the course of the war, many behind-the-scenes matchmaker to bring about mergers and Koreans, particularly those in the South, discovered that acquisitions of financial institutions. However, that is not the foreign troops were willing to make sacrifices to help them. answer and the government should instead put in place It was this positive experience of working and fighting management with a more robust sense of ownership. With a together with foreign troops against a common enemy that stronger sense of ownership among the management, prepared Koreans to pursue an outward looking development corporations would not need prodding from anyone to figure strategy with emphasis on exports with great success in the out what is good for them. The best way to bring about this 1960s. This outward orientation was further reinforced when outcome is to expedite re-privatization of those financial Koreans overcame the financial crisis of 1997-98 with the institutions that have become de facto nationalized in the help of multilateral institutions and foreign governments. course of overcoming the 1997-98 crisis. In the area of capital Thanks to this experience, there are few Koreans today who markets, it is critical for the government to resist temptations do not appreciate the benefits of attracting foreign investment. to pursue quick fix measures that may distort the market. It Conceptually, it is only a short step from appreciating the should rather concentrate on strengthening the institutional value of foreign investment to playing the role of the premier underpinnings, such as increased transparency and regional business and cultural center. accountability in corporate governance. There are also three key issues in corporate reform that BASIC STRATEGY have yet to be addressed. First, far too many companies with questionable financial viability are still allowed to remain in It is one thing to say that Korea has many favorable the “workout” process. In this process, creditors and debtors conditions for becoming the premier business and cultural are compelled to work together to restructure the companies center; it is quite another to say that it will actually become in order to avoid outright bankruptcies. Similarly, the sale of one. Korea needs to implement a well-designed strategy to several financially troubled companies, including Daewoo achieve this goal. The strategy is surprisingly simple, with Motors and Hynix, to overseas buyers has been delayed too two main components. One relates to restructuring policies long. Second, although a very large number of chaebols were and institutions, and the other to improving the physical allowed to fail, several major chaebols that have survived environment. continue to have as many subsidiaries as before the crisis, casting doubt on whether they have indeed strengthened their core competence. Third, while there is little question that

Harvard Asia Quarterly 48 Spring 2002 corporate governance has greatly improved over the past four created. An incentive-based salary system was introduced years, the country still has a long way to go before it can hold into the civil service in the early days of the present up its corporate governance as a model for others. government, but to this day the new system applies to only a Thus, what the government has yet to do in the corporate small number of senior officials. As for the privatization of sector is also clear. More than anything else, it should shorten public enterprises, only six of the eleven targeted have been the workout process and force non-viable companies to exit privatized so far. speedily. For companies experiencing liquidity problems but In response, the government should make efforts to obtain judged to be viable, lending institutions should convert their public consensus on its role in a genuine market economy. debts into equity without further delay. While the injection At the minimum, the creation of new ministries and the of additional public funds will be necessary, care should be proliferation of commissions should stop. The incentive-based taken to ensure that such funds are not spent to prolong the salary system should be extended to the majority of life of non-viable firms. The government should enforce government workers, if not all of them. Public enterprises competition laws more vigorously to improve the core should be more expeditiously privatized. The practice of so- competence of chaebols. Ultimately, it should be market called “parachute” appointments given to politicians and forces that discipline the chaebols rather than the multifarious retiring senior bureaucrats should come to an end. regulations currently relied on by the government. To further Apart from insufficient progress with reforms, there have improve corporate governance, it is essential that more been problems in their implementation. There were many rigorous corporate auditing standards be applied and that instances of reforms inconsistent with market principles, one outside board members are chosen on the basis of professional case being government compulsion of chaebols to swap their competence rather than political connections. business lines in 1998, and another forcing commercial banks Of the four sectors that have been subject to extensive to form a bond stabilization fund in the summer of 2000. The reform, progress in the labor market has been most limited. government also failed to maintain the momentum of reform, The idea that workers should not be paid salaries for the in anticipation of the general election in April 2000. Yet, the periods they were on strike under the “no work/no pay” government did not resume the pressure after the election principle has been debated since the 1980s, but this principle because it feared an adverse impact on the North-South has yet to be implemented. Moreover, Korean companies are Summit that was to be held in two months. The government still required to pay salaries to workers engaged in full-time also failed to maintain a sense of priority in its reform efforts. union activities. In addition, companies have great difficulty A case in point was the government initiative to realign the discharging workers for restructuring purposes due to the division of labor between medical doctors and pharmacists. onerous conditions they must meet, such as the requirement In retrospect, one wonders if the need for this initiative was for the advance consent of labor unions and the near-bankrupt so urgent that it took precedence over other reforms. In any condition of a company before employees can be discharged. event, the drive generated an untold amount of controversy Furthermore, the tripartite labor commission – created in the and social strife, using up much of the government’s political wake of the financial crisis to formulate public policy on labor- capital and causing “reform fatigue” prematurely among the management issues based on consensus among labor, business public. and government – has become a problem in that its very The moral is clear. In all future reform efforts, market existence has politicized virtually all labor-management principles must not be compromised. Reforms must be disputes. implemented with a clear sense of priorities. In this regard, There is no excuse for further delaying the having a clear long-term vision helps. Once a reform agenda implementation of the “no work/no pay” principle. With has been started, the government should stay the course. regard to the payment of salaries to employees working full- Otherwise, not only will the momentum for reforms be lost, time for the unions, the government should reconsider the but the credibility of the government itself will also be decision it made in the spring of 2001 postponing for another impaired. five years the termination of company payment of salaries. As for the restricted ability of companies to lay off workers Key Reforms for the New Paradigm during restructuring, the stringent requirements should be relaxed. The government should also consider abolishing the In addition to completing the four sector reforms in the tripartite commission altogether, because in a genuine market manner indicated, Korea ought to undertake several key economy, labor-management issues should be resolved first reforms to become the premier business and cultural center and foremost by the parties directly involved. in Asia. Structural reform in the public sector has not gone very The first of these relates to education, particularly higher far either. One important reason for this has been the failure education. Although Korea has made remarkable strides in on the part of the current government to define precisely the this area, the progress to date has been mostly quantitative, role of the government in a genuine market economy and not qualitative. That none of Korea’s institutions of higher obtain public consensus on this issue. As a result, many learning ranks among the top 50 educational institutions in reforms in the public sector have been carried out in a the world is most telling. The basic cause is the failure to haphazard manner at best. The number of government expose the nation’s higher education to competition both at ministries was substantially reduced three years ago, but over home and abroad. Thus, one effective remedy for this situation the past year and a half, this trend has been reversed. In would be to allow foreign universities to open campuses in addition, many new cabinet-level commissions have been Korea. The Korean government would do well to study the

Harvard Asia Quarterly Spring 2002 49 various kinds of incentives – including subsidies for initial adopt a personal income tax with few exemptions or operations and generous funding of research projects deductions and a proportional rate structure, as is the case in undertaken jointly with local institutions – offered by the Hong Kong today. Korea should also drastically reduce the government of Singapore to first-rate foreign institutions to corporate income tax rates, following Ireland’s example. operate in that country. Ireland adopted a 10% corporate tax rate in 1981 for The second major strategic reform Korea should manufacturing activities, the lowest of its kind in the European undertake lies in the area of immigration policy. Historically, Union, with the result that it has succeeded in attracting more Korea was unwilling to accept any significant inflow of foreign direct investment than any other EU member. This, immigrants because its limited domestic resources might not in turn, has helped Ireland sustain the highest economic be sufficient to support a larger population. However, Korea’s growth in the EU for the last 15 years. Actually, Korea can problem today is very different. It will need more talented do better than Ireland. Korea should abolish the corporate and creative people from overseas if it is to play the role of a income tax. As it stands, the tax does much harm to the world-class business center in the global economy. For this economy: it entails double taxation, discourages management reason, Korean immigration policy needs to be changed from maximizing profit, and encourages them to rely more fundamentally. In order to make up on debt than on equity financing. for the shortage of workers in labor- A fourth major reform Korea intensive industries, the Korean needs to undertake is strengthening the government has allowed the inflow of Korea will need more talented rule of law. Without the rule of law, a growing number of unskilled and creative people from no country can possibly hope to be- workers to do what is called 3-D overseas if it is to play the role of come a vibrant business center. For (“dirty,” “dangerous,” and a world-class business center. example, unless the rights and prop- “demeaning“) work shunned by erty of the people are properly pro- locals. However, when it comes to the tected, few would undertake invest- inflow of highly trained professionals, the government has ment. Even a casual look at what has transpired over the past been issuing long-term visas only sparingly. Like Singapore, year alone should suffice to convince anyone that Korea still the Korean government should grant permanent visas to all has a long way to go. For instance, many believe that the foreigners who meet certain standards and criteria in terms auditing of the media by the national tax authority was not an of professional competence. In this regard, the government impartial enforcement of law. Similar doubts surround the should also learn from the experiences of such countries as investigations by the Office of Prosecutor-General into the the United States and the United Kingdom, which have allegations of corruption involving politically well-connected benefited enormously from a liberal immigration policy as individuals. The fact that many foreign enterprises, includ- far as highly trained professionals are concerned. ing those already operating in Korea, would rather sign im- Fundamental reform should also occur in the area of portant contracts in Hong Kong or Singapore than in Korea taxation. Korea’s system of taxation is not conducive to the is an indication that they have less than full confidence in creation of a good business environment because it Korean courts when it comes to the enforcement of these discourages people with ability and talent from working hard. contracts. Korea’s personal income tax rate structure is overly For the rule of law to take root in Korea, it is essential progressive. The highest marginal tax rate is 39.6%, one of that Koreans eliminate the cronyism that is deeply embed- the highest in the world. This high marginal tax rate applies ded in their culture. Koreans should also accept the view that to an annual taxable income of 80 million won, or roughly they must abide by all laws regardless of whether they are US$64,000, and above. As for corporate income tax, the good or bad. For this change in the popular attitude to occur, highest marginal tax rate is 29.7%, which is applicable to however, the government should streamline the current body any corporation with profits of more than one hundred million of laws in the nation. In the course of introducing modern won (roughly US$80,000) during any tax year. legal systems from the West, Korea has incorporated far too On the surface, such high marginal tax rates appear to many laws and regulations that are either too idealistic or achieve an equitable redistribution of wealth through taxation. totally unsuited to local conditions. Unless this reform is The actual results are very different, however. As marginal undertaken, it would not be possible for Koreans to respect tax rates increase, taxpayers are tempted to reduce their tax all laws and abide by them, and effective enforcement would burden in unusually creative ways. The upshot of this is three- likewise be difficult. fold. First, as many exemptions and deductions have been For the rule of law to prevail in Korea, it is also impera- adopted thanks to taxpayers’ lobbying efforts, the tax structure tive that the government abide by law as much as individual has become extremely complicated and non-transparent, citizens. All laws must be enforced equally, impartially and giving rise to opportunities for corruption. Second, tax in a transparent manner. One of the most urgent issues Kore- exemptions and deductions decrease the tax revenues ans should resolve in this regard is to insulate the nation’s significantly. Third, such tax rate structures make little law enforcement agencies, particularly the Office of Pros- difference in terms of income distribution after tax, since ecutor-General, from partisan politics. The judiciary should exemptions and deductions favor the wealthy. In short, both also be given full independence. To this end, the nation should personal and corporate income taxes with steep progressive review its constitutional arrangements for the separation of rates result in high social costs with few social benefits. powers among the three branches of government, given that One way to deal with these shortcomings would be to one of the biggest obstacles to the rule of law lies in the “im-

Harvard Asia Quarterly 50 Spring 2002 perial” powers and prerogatives enjoyed by the President. In growth for a considerable time to come. The general consen- undertaking these and other reforms, Korea should open its sus among Korean economists today is that since the Korean legal profession to outside competition. The resulting ex- economy has now reached maturity, it can no longer be exchange of legal knowledge would not only greatly enhance pected to grow as rapidly as it did over the past four decades. legal professionalism in Korea but also strengthen the rule of For this reason, the potential growth rate of the Korean law. economy over the next five years is believed to be 5-6% at Finally, one should not overlook the fact that in order most. Needless to say, this estimate of Korea’s potential for a country to become a business or cultural center, an at- growth rate does not take into account the reforms proposed tractive physical environment is necessary. Although Korea above. Nor does it take into account the fact that as a busi- is endowed with a pleasant climate and much geographical ness center, Korea will provide leadership for entrepreneur- beauty, pollution has become a serious problem as a result of ship, innovation and technological progress. In performing its headlong industrialization. One way to deal with this prob- these roles, it will attract highly creative and talented people lem is to give police powers to officials responsible for moni- from all over the world. This will all add up to higher pro- toring environmental damage, which would lead to timely ductivity and growth. and effective enforcement of environ- As Korea undertakes reforms in its mental laws and regulations. Unlike the higher education, its society will Ministry of Environment, the police can undergo a significant transformation as initiate direct investigation into viola- This economic downturn has well. With improvement in the quality tions of law even against the will of the convinced many of the need of education and physical environment, parties involved. In addition, the police for a new perspective. Korea will become an attractive place can take actions to stop criminal viola- for intellectual and creative talent. This, tions in progress without obtaining per- in turn, should make Korea not just a mission from prosecutors, whereas most other departments business center, but a cultural center as well. As Korea’s tax including the Ministry of Environment can take actions only system becomes more simplified and transparent and the rule after violations have become fait accompli. Korea should also of law is strengthened, there will be less corruption in both recognize that the basic layout as well as the infrastructure government and business, making the economy even more provided in many cities fall short of international standards, productive. In a corruption-free society, all citizens will enjoy making it difficult for foreign professionals to work greater and more equal opportunities to develop their full efficiently.4 To address these problems, Korea should ideally potential. This will reinforce the willingness of all Koreans redevelop all of its cities. As this will require far too many to work together for their common future, thus making Korean resources, however, the government might consider devel- society more cohesive. Furthermore, as Korea becomes home oping or redeveloping jointly with private entrepreneurs a to many multinational enterprises from industrially advanced few select cities to serve as models for others. nations, their home governments will be more willing to extend cooperation and render assistance in securing peace THE FUTURE SHAPE OF KOREA and stability on the Korean peninsula. This too will help Korea sustain high growth, better preparing it to achieve peaceful I have been promoting the strategy outlined above for unification on the peninsula, which in turn will improve the the past eight years. Initially, these ideas and proposals re- prospects for peace and stability for the whole of Asia. ceived only a limited acceptance. Over the past year and a In conclusion, what Korea needs more than anything else half, however, they have been more widely embraced be- at this stage of its development is a clear vision and concrete cause the nation’s economy once again experienced a sharp strategy to realize its full potential. Korea should aim to downturn beginning in the second half of 2000, in spite of become the premier business and cultural center in Asia the many reforms implemented by President Kim Dae Jung. through a series of reforms designed to achieve this goal. This economic downturn has convinced many of the need for a new perspective in the future direction of Korea. President Kim seems to follow this view. In his New Year press conference this year, he announced that the trans- ENDNOTES formation of Korea into a business hub in Asia should be a national goal. As a result, many government ministries are 1 Some may wonder why Tokyo is not mentioned as a business expected to formulate strategies to achieve this goal by the center in Asia. The reason is that most of the businesses conducted end of March this year. Although this is a welcome develop- in Tokyo are domestic in nature, rather than for clients in neighboring countries. Many also would not consider Tokyo as a conve- ment, it is too bad that President Kim failed to espouse this nient place to do international business due to over-regulation. paradigm much earlier. Given that his administration has less Hence, Tokyo should be regarded more as a national business cen- than one year remaining in office, the best that one could ter than an international one. hope for is that it will lay down the foundation for imple- 2 The term “rent” in economics is used to designate that part of mentation of the strategies outlined above. returns to any input used in the production process over and above What will Korea look like if the major reforms outlined the returns it could earn in a purely competitive market. above are implemented as key components in Korea’s strat- 3 The sources include CNNIC, Ministry of Information and Com- egy to emerge as the premier business and cultural center in munication of the Republic of Korea, NASSCOM and IDC. 4 Asia? First and foremost, Korea will be able to maintain high The impairment of efficiency is of course not limited to foreign

Harvard Asia Quarterly Spring 2002 51 professionals. But greater attention must be paid to them for two reasons. (1) They are used to higher standards than domestic pro- TRANSLATORS fessionals. (2) Without a substantial presence of foreign professionals, talents and other creative people from abroad, a country cannot hope to become a first rate business center. U.S. Goverment office seeks experienced Uyghur-English contract translators.

Successful candidates must be able to translate written Uyghur into good, idiomatic English, and must be able to read both Latin and Arabic forms of Uyghur. Candidates will work from home, must provide their own computers, and have access to and familiarity with the Internet and e-mail. Please send to the e-mail address below a cover letter and resume in English, which includes the following information:

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Harvard Asia Quarterly 52 Spring 2002 HARVARD ASIA BUSINESS CONFERENCE 2002: PHOENIX RISING

On February 1-2, students, academics, entrepreneurs and pro- KEYNOTE SPEECH 1: DEEPENING THE REFORM fessionals converged at the Harvard Business School to attend AND OPENING UP PROGRAM IN THE CONTEXT the 2002 Asia Business Conference, organized by students of the Harvard Law School and Harvard Business School. Titled OF GLOBALIZATION “Phoenix Rising”, the conference examined the state of the VICE-MINISTER JIN LIQUN, PEOPLE’S REPUBLIC OF CHINA Asian economies in the aftermath of the 1997 financial crisis and the global recession of 2001. The Harvard Asia Quarterly Chinese Vice-Minister of Finance Jin Liqun presented a provides full coverage of the keynote speeches and plenary panels, along with a selection of the discussion panels. sunny view of the future of his government’s “Deepening Reform and Opening Up” program in the context of China’s HAQ Conference Editors: Rebecca Culley, Weishi Li, Jin Pao, recent entry into the World Trade Organization (WTO). He Victor Shih, Alice Yu, Wei Lily Zhou. began by noting that the Chinese economy has demonstrated a high degree of resilience in the general global recession. For example, China’s GDP increased 7.3% last year, while OPENING REMARKS its export growth was 6.8% and import growth was 8.2%. He CHRIS ZOOK, DIRECTOR, BAIN & COMPANY attributed these achievements to the “Deepening the Reform and Opening Up” program and to the success of new reform Despite the conference’s optimistic “Phoenix Rising” measures. theme, opening speaker Chris Zook said that the present “China is determined and has the ability to meet the ex- “world synchronized recession” makes a quick Asian eco- pectation of the other WTO members,” said Jin, adding that nomic recovery difficult. Against this background, he dis- China has a good record of keeping international commit- cussed the concept of sustained profitable growth by sharing ments. Implementation of China’s WTO commitments is the three observations and applying them to Asia. “necessary and logical step forward” in carrying out the re- First, the business environment has become increasingly forms for the country’s overall sustainable growth. pressurized, and performance expectations of top business Jin also talked candidly about the “real and tangible” executives have never been higher. Conversely, the penalty challenges faced by the Chinese government and the Minis- for poor performance has never been so severe, and the at- try of Finance. For example, in keeping with its WTO com- tainment of sustained profitable growth is more difficult than mitments, China has already reduced tariffs from 15% to 12% ever before. Today, the price-earnings ratios for most big in 2002, which will be followed by a further reduction to companies’ stocks are over 20, while the average period that 9.4% in 2005 for a number of products and sectors. The tar- a stock is held has shortened to less than a year. With the iff reduction is especially threatening for industries lacking average turnover rate for top executives at 22% in the US in competitive advantage, such as the automobile industry. and 27% in Korea, the shortened duration of corporate lead- Hundreds of reform measures are being pursued to en- ership and strategy has increased the tension between short sure China’s smooth transition into WTO membership. Bank term results and long term growth. reforms are a key part of the financial sector reform. Within Second, sustained profitable growth – defined by Zook five years, all restrictions on foreign banks’ entries into the as a 5.5% annual increase in revenue and net income over Chinese market will be phased out. “Commercial banks in ten years – is inherently difficult to achieve. Currently, this is China, whether state-owned or not, have independent deci- reached by only 13% of US public companies. The percent- sion making ability,” said Jin, and these banks should not age is even lower among the largest companies in Asia, with view foreign banks as competitors, but as coaches. The goal only 9% of Chinese companies, 7% of Korean companies of the public financial system reforms is to eventually free and less than 5% of Japanese companies experiencing sus- the government from micro-management, so that it can fo- tained profitable growth respectively. cus its efforts on providing public goods and services, such Third, it is important to identify and succeed in a core as education, technological development and environmental market. Thirteen percent of US public companies that have protection. achieved sustained profitable growth have created more than Following the discussion of China’s reform measures, one-half of the value and captured more than one-half of the Jin turned to the importance of the Sino-US relationship. In investments in the market. Among these most successful com- the past decade, trade between the two countries has qua- panies, 80% are built around core businesses, and only 20% drupled. Today, the US is China’s second largest trading part- are high-tech companies. The key to success is to “dominate ner and China is the fourth largest trading partner for the US. a core market and then use it to branch out.” Jin also stressed China’s commitment toward cooperation with

Harvard Asia Quarterly Spring 2002 53 the US in fighting terrorism, saying that “the Chinese people KEYNOTE SPEECH 3: ASIA’S STRENGTHS AND are friendly toward the American people... [They felt] out- CHALLENGES IN THE YEARS AHEAD raged by the September 11 attack on America.” JEFFREY R. SHAFER, MANAGING DIRECTOR, SALOMON SMITH BARNEY

KEYNOTE SPEECH 2: CHINA’S WTO ACCESSION: Jeffrey Shafer provided a look back to the Asian finan- NEW DEBATES IN A NEW ERA cial crisis of 1997, as well as a look ahead to the future in AMBASSADOR CHARLENE BARSHEFSKY, FORMER US TRADE Asia. He began by going over some broad macroeconomic REPRESENTIVE facts. The Asian financial crisis led to lower growth across the region. Yet, Asian economies are much less vulnerable to Charlene Barshefsky – the chief negotiator and princi- shocks now than before 1997, due to a number of reasons: pal trade policy maker in the Clinton Administration from more flexible exchange rates (except in Hong Kong, China 1996-2001 – addressed three major issues stemming from and Indonesia); improvement in the ratio of international re- China’s accession into the World Trade Organization: China’s serves to short term debt; renewed confidence that has al- role as a shaper of the global trading system, China’s internal lowed governments to follow counter-cyclical policies; and economic development and the Sino-US relationship. inflation under good control. Asian economies are also less Barshefsky began by addressing the future impact of susceptible to swings of the Japanese economy now than four China’s role as a shaper of the global trading system. As op- years before. Japan has become just another country having posed to reacting to international changes, “membership in a recession and will not be as likely to have catastrophic ef- the WTO will give China the chance to shape the WTO for fects on the rest of Asia. its own interests, in Pacific diplomacy and cross-straits rela- While acknowledging the fact that growth slowed in 2001 tionships.” Barshefsky was cautiously optimistic when she – with Singapore, Taiwan and Hong Kong going into reces- emphasized that China was very pragmatic in its trade policy sions due to their high investments in information technol- and therefore would likely be a source of growth for smaller ogy and consequent vulnerability to the US recession – Shafer countries in the region. Turning to the cross-straits relation- indicated that consumer confidence and other indicators are ship, she said that since trade between Taiwan and China has positive. Always a good barometer of recovery, stock mar- increased, it will be important to see “what role economic kets have been up recently everywhere but in China. As a convergence can play in ameliorating political conflict.” result, Shafer was optimistic about the Asian economic out- Regarding the consequences of membership for China’s look. Citibank economists have projected positive growth in internal economic development, Barshefsky said that WTO 2002 for all Asian countries. Nevertheless, this growth is still membership will “force China into developing a more com- below what the Asian countries can aspire to. The challenge petitive domestic economy.” The elimination of tariffs will is to restore growth commensurate with the region’s high sav- result in easier access to technology and reinforce the impor- ings record and potential. tance of rule of law. Although cautious in predicting a new Three things need to happen before this restoration can direction for political change, she said political pluralism may occur. First, Asian governments need to push for corporate result in China in the long term. and economic restructuring. Although needs vary from coun- Finally Barshefsky turned to the Sino-US relationship, try to country, there is a lot of unfinished business in the elimi- underscoring the ability of trade and economic policy to unite nation of bad debt. Given that the governments are often a the two countries around common interests and shared ben- direct or indirect creditor or equity holder, they need to spear- efits. For the Clinton administration, prioritizing China’s en- head the effort. Otherwise, there will be an incentive for firms try into the WTO was a way to put the common ground be- to stall for time. In China, the focus has been on the four tween the two countries “on center stage.” In China, minis- strong commercial banks, by instituting a credit culture and tries that opposed entry are now charged with implementa- getting return for risk. A start has been made in liquidating tion of the reforms, and the US will need to work with China bad loans by auctioning off debts, but determination is re- to achieve them. “The US will need to pay attention to divi- quired to clean up their portfolios. Shafer suggested sions in the Chinese government,” Ambassador Barshefsky recategorizing the banks into three tiers: good banks, work said. Export growth in China is up 18% this year, but a larger out banks, and bad banks. question remains: “Will the China policy consensus prove Second, Asian countries need to take corporate gover- sustainable?” nance reform seriously. Governments need to provide a solid In conclusion, Barshefsky said that the biggest obstacle legal framework to target crony capitalism, and the business to a successful future Sino-US relationship is the emotion on structure must move toward private markets to achieve the both sides. National pride and differences in values could be efficient allocation of resources. Using the bankruptcy of obstacles if they are not addressed. China’s WTO entry, by Enron as an example of the universal challenge in achieving bringing a closer convergence of interests, will hopefully help corporate accountability, Shafer nevertheless cited the US as both governments to better manage crises in their future re- a model for quickly fixing what is broken. lationship. “A greater appreciation for the cost of failure” Third, Asian countries need to identify growth sectors will hopefully lead to a relationship “characterized less by and opportunities in the region and capitalize on them. While suspicion and more by cooperation and concern for the com- Shafer does not expect the US or Europe to be the main mar- mon good, peace and prosperity.” ket for Asian countries in the long term, he said that entrepreneurs in Asia should pay attention to the opportunities in

Harvard Asia Quarterly 54 Spring 2002 China. Although it was the number ten importer in the world development in theses countries, the welfare gains from lib- in 2001, China is the biggest market prize in Asia, especially eralization and the perception of China as an economic threat now that it will play by WTO rules. As China grows, its wages are, or should be, catalyzing structural reform and economic will rise and the appreciation of its currency will equalize reorientation. Accounting for 57% of stock market capitali- competition. In Shafer’s opinion, the rest of Asia is well- zation in the region, China is currently the recipient of 84% placed to sell into China and access its markets, even more of the region’s foreign direct investment (FDI), which is up so than China’s interior provinces. Moreover, cultural ties from 30% ten years ago. While China’s dominance clearly may enable Asians to do better in China than foreigners. In challenges ASEAN countries, Kharas suggested that it also sum, “it is the wrong mentality to see China as a threat.” provides an opportunity for them to focus on attracting FDI, and improving corporate governance standards and the quality of labor. He added that China presents a market opportunity PLENARY PANEL 1: ASIA’S FUTURE - REGIONAL for the exports of ASEAN countries. INTEGRATION OR REGIONAL COMPETITION? He then outlined the “hard infrastructural” elements nec- AMBASSADOR SUSAN G. ESSERMAN, PARTNER, STEPTOE & essary for future regional integration: the creation of regional JOHNSON transportation hubs, like Singapore; the improvement of HOMI KHARAS, CHIEF ECONOMIST, WORLD BANK policy compliance and efficiency of supply chain manage- ROBERT G. LEES, SECRETARY GENERAL EMERITUS, PACIFIC ment; as well as increased protection of intellectual assets. BASIN ECONOMIC COUNCIL Kharas pointed out that South Korea was leading the way in GARY L. ROGERS, VICE CHAIRMAN OF THE BOARD AND the protection of such assets by complying with the TRIPS EXECUTIVE OFFICER OF GENERAL ELECTRIC COMPANY accords. In conclusion, Kharas underscored that further regional Can we assume that Asian regional integration is the integration is the “stepping-stone” for more successful glo- model forward? And what is the role of regional integration bal opening. While liberalization brings tremendous benefits, in the age of globalization? Do they conflict with or comple- it also has social costs, and how to share those costs is a ment each other? challenge: “It is essential that the poorest countries in the Ambassador Susan Esserman, former deputy US Trade region get pulled along in this kind of regional development.” Representative in the Clinton administration, looked at the Robert Lees, drawing on his past experience as Secre- prospects for India’s further integration into the region. Not tary General of the Pacific Basin Economic Council and 20 export-led and largely marginalized in regional trade, India’s years of doing business in Asia, observed that “Asia is not a course of economic development is unique in Asia. How- monolith” and that its long-term economic growth may re- ever, she argued that a world-class hi-tech services market side in a global market orientation rather than a regional one. might change India’s history of anti-regional integration He outlined what he saw as the three necessary steps to that Citing the influence of Nehru and Gandhi, Esserman success. First, China, as an “800 pound gorilla on steroids” outlined the historical and political reasons behind India’s needs to grow and share its wealth by investing in neighbor- pursuit of economic development along the socialist autarky ing countries. Second, given that the Japanese economy rep- model. Policies emphasizing small-scale enterprises have led resents 60% of Asian GNP, Japan needs to tame its bureau- to a loss of competitive advantage against other regional com- cracy, open its culture and allow for economic growth. Fi- petitors, specifically China. In sharp contrast to other Asian nally, looking at ASEAN, Lees emphasized the need to re- countries’ export-led growth strategies, India’s limited par- build infrastructure and deal with corruption. “Just because ticipation in regional trade has increased only slightly, now your economy is in Asia doesn’t mean it will be successful,” constituting a 4% of total trade. Coupled with a suspicious he warned. view of the WTO, India’s anti-trade attitude has hampered Gary Rogers, Vice Chairman and Executive Officer of its ability to reap the rewards of being rich in resources, es- GE, contributed the perspective of his company’s extensive pecially in its hi-tech services sector. While Esserman did experience in Asia by breaking down what he saw as the not forsee dramatic changes in India’s anti-trade political ori- main trends for economic development in the region. For entation, she suggested that China’s emergence in both the Japan, he highlighted the need for the country to undergo a world and regional economies may provide a positive force restructuring like the US did in the 1980s. For India, he em- for reform. Still, she concluded that India’s broader integra- phasized its enormous intellectual capability and potential tion was unlikely to occur rapidly. in information technology. Finally, Rogers summed up the Turning to the question of regional cooperation, Homi general spirit of the panel by emphasizing China’s promise Kharas, the Chief Economist at the World Bank, laid out three as a huge consumer market, and its potential to have a posi- principles influencing the degree and nature of Asia’s inte- tive impact on the entire region. gration: consensus building, non-intervention, and informal institutions. Emphasizing the diversity of the economies and countries in the region, he pointed out that while the historical drivers of integration remained, the multilateral opening of the region had become much more difficult. Kharas then illustrated the way in which these forces are currently affecting the economic development of ASEAN, China and South Korea. Although trade is no longer driving

Harvard Asia Quarterly Spring 2002 55 PLENARY PANEL 2: CHINA’S ENTRY INTO THE fered slightly different prescriptions and outlooks. A com- WTO AND ITS IMPACT mon theme is that all participants stressed the critical role of DR. DONG-SUNG CHO, DEAN, COLLEGE OF BUSINESS the Chinese government in handling the challenges. Cho cited ADMINISTRATION, SEOUL NATIONAL UNIVERSITY the political leadership and stability as keys to China’s suc- YA-FEI HE, MINISTER AND DEPUTY CHIEF OF MISSION, cess. Shin, on the other hand, offered more practical advice: PRC EMBASSY TO THE UNITED STATES the Chinese government should speed up reforms, promote a RUDOLPH A. SCHLAIS, JR., GROUP VICE PRESIDENT, pro-business environment, transparency and rule of law, stamp GENERAL MOTORS CORPORATION, PRESIDENT AND CEO OF out corruption and honor contracts. In response, He made it GENERAL MOTORS ASIA PACIFIC clear that the Chinese government is confident and ready to MYOUNG-HO SHIN, VICE PRESIDENT, ASIAN DEVELOPMENT BANK handle the challenges and capitalize on the opportunities, given its experience with economic reform in the past 20 The central inquiry of the panel discussion was captured years. As examples of China’s preparation efforts “at all lev- by a question put forth by Rudolph Schlais of GM: Will the els,” he noted that China has enacted many new laws and has WTO tiger be tamed, or will it wreck havoc in China? The initiated major educational campaigns regarding the conse- four panelists shared a cautiously optimistic outlook for the quences of WTO entry. In addition to China’s own efforts, impact of China’s entry into WTO on China itself, on sur- the need for foreign cooperation in this process was also high- rounding nations and on the world economy. lighted. For example, He emphasized the need for improved Dong-Sung Cho started the discussion by noting that size US-China relations, quoting a US official that the US itself and rapid economic development make China a daunting “will be a big beneficiary of China’s WTO membership.” player in the world economy. It is not a question of if, “but China’s entry into the WTO will have significant impact when, China becomes No. 2 and eventually No. 1 economy on neighboring Asian countries, according to Cho. China is in the world” surpassing Japan and United States. Similarly, likely to become the “center of gravity” for international capi- Ya-Fei He emphasized the continuous healthy growth of tal. There will be increased flow of goods and capital among China’s economy against the backdrop of global economic China, Korea and Japan, leading to the potential emergence recession, calling China “the only bright spot in the world and integration of a Pan-Chinese economy in Southeast Asia. today.” More importantly, China is likely to emerge as a regional The panelists reached a consensus that the new WTO political leader, and lend help to troubled economies of neigh- membership will undoubtedly bring both benefits and chal- boring countries. lenges for China. Benefits include both tangible and intan- China’s WTO entry will impact the world economy in at gible economic benefits. According to Myoung-Ho Shin, least two ways. First, China now ranks 8th in trade. Joining China’s WTO accession will be a “turning point,” leading to the WTO should move China up the rankings, and catalyze more employment opportunities, sector-specific benefits such the expansion of international trade and the growth of the as improved textile export due to quota elimination, and long world economy. Second, as a new WTO member, China is term economic gains in the range of 1-2% of GDP. Addition- anticipated to strengthen the voice of developing countries ally, Cho noted that increased competition from multi-na- and redress the traditional power asymmetry between devel- tional corporations will likely prompt massive bankruptcies oped and developing nations in trade negotiations. and restructuring efforts for domestic firms and result in stron- Schlais from GM brings a more focused perspective to ger domestic industries. However, he also acknowledged the the panel. In his view, China’s WTO entry will bring major opposite argument, which is that increased foreign competi- benefits for the foreign auto industry, by eventually eliminat- tion may result in the loss of economic independence and ing quotas. Import quotas will be reduced from the current increased unemployment, social unrest, and political insta- 80% to 25%, and automotive financing will be available from bility. On top of economic benefits, He listed numerous long- financial institutions. He noted that the advantages for local term intangible benefits that the new WTO membership may domestic producers also abound. As an example, he pointed bring for China. For example, joining the WTO may facili- to local manufacturers’ easy access to the market of services tate China’s transition from a planned economy, strengthen and repairs as an advantage. To further emphasize that the rule of law, and foster “clear and credible commercial rela- benefits will not be lopsided for foreign corporations, he high- tionships with other WTO members.” lighted benefits that WTO membership will bring for China, The panelists identified several key industries that will at least for its auto industry. For example, increased foreign bear the brunt of the new WTO membership. Agriculture is competition will encourage consolidation of domestic auto in serious danger, since China has 800 million farmers whose industry, and hasten the elimination of failing companies. An livelihood depends on the well-being of the agriculture in- additional side effect is that investment in China will likely dustry. As an example of the threat from foreign competi- be accelerated at the expense of other South East Asia nation, He noted that the increased importation of cheaper high tions. yield soybeans from the United States has already driven many In the end, there appears to be no simple answer to the Chinese soybean producers out of business. Many other in- question of whether the WTO tiger will be tamed. At best, dustries, including banking, insurance, auto, telecommuni- China’s entry remains a “mixed picture.” cation and pharmaceuticals, resisted reform. As a result, these industries are not yet ready to face the enormous challenges brought by China’s WTO entry. In the face of the daunting challenges, the panelists of-

Harvard Asia Quarterly 56 Spring 2002 Harvard Asia Quarterly Spring 2002 57 PLENARY PANEL 3: LEADERSHIP IN ASIA’S RE- Tseng pointed out that the 9/11 attacks on the US and slow COVERY - WHO WILL EMERGE AHEAD? reform in EU and Japan meant that all three economic power KO KHENG HWA , MANAGING DIRECTOR, SINGAPORE ECONOMIC houses have fallen into recession simultaneously. Thus, glo- DEVELOPMENT BOARD bal growth is likely to be slow and is estimated by the IMF to WANDA S. TSENG, DEPUTY DIRECTOR, ASIA PACIFIC be about 2.4% in 2002. This slow growth will hit export- DEPARTMENT, INTERNATIONAL MONETARY FUND oriented and IT-dependent economies the most. As is typical RICHARD SMITH, PRESIDENT, ELI LILLY ASIA for continental economies, China and India will be the least YASHENG HUANG, PROFESSOR, HARVARD BUSINESS SCHOOL affected by the global slowdown. However, due to the high foreign exchange reserves, flexible exchange rates, and low Ko Kheng Hwa of the Singapore Economic Develop- external debts across the region, she did not expect a repeat ment Board began his remarks by voicing his optimism about of the Asian financial crisis. growth in the region. He reasoned that Asia will recover in Some of the fundamental problems that caused the Asian the near future, given the recovering US economy, fiscal financial crisis still exist. Better financial statistics across the stimulus policies implemented by governments in the region, region now reflect increasing involvement of the state in the greater resilience of regional economies, and strong growth banking sector and the transfer of debt to asset management in China and India. He reviewed familiar arguments for Asia’s companies rather than fundamental reforms. Bank profitabil- great potential: strong human capital, attention to high tech- ity has plunged due to low lending levels, a risk-averse strat- nology development, a huge emerging middle class in China egy favored by state-run banks. In order to increase efficiency and India, and governments largely committed to fostering of the financial sectors, risk evaluation within banks needs to growth. be revamped; banks need to be recapitalize to provide suffi- Asia can no longer be seen as simply a production cen- cient lending capital; and governments need to pass regula- ter for labor intensive goods but as an integral part of the tions to prevent repetition of previous excesses. Asian gov- global production process, from research and development ernments ultimately need to re-privatize banks to insure long- to downstream marketing. Focusing on Singapore, Ko attrib- term efficient allocation of capital and achieve sustainable uted its strong performance to its business-friendly macro- growth. However, Tseng was elated at the lack of a resur- economic policies, benevolent government, large talent pool, gence of protectionist policies among Asian economies, de- and good infrastructure, all of which foster the creativity nec- spite the global slowdown. This is a sign of political will essary for Singapore’s jump into the “innovation driven toward reform and opening. Tseng concluded by saying that economy.” To ease Singapore’s transition toward this new Asian countries should further increase their competitiveness phase of economic development, the government has cre- by diversifying their exports and limiting their reliance on IT ated incentives for leading universities around the world to production. set up branch campuses in Singapore and for startups and venture capitalists to set up shop in the island city. Ko was very confident in the effectiveness of these policies. STREAM 1, DISCUSSION PANEL 2: GOVERNMENT Richard Smith painted a less sanguine portrait of Asia, RESPONSES TO ECONOMIC DOWNTURN in particular China. Smith reviewed popular arguments about ALICE AMSDEN, PROFESSOR, MIT the giant potential of China, but expressed his own reserva- ZHU GUANG YAO, EXECUTIVE DIRECTOR FOR CHINA, WORLD tions about its future. First, he noted that there exists large- BANK scale social unrest and increasingly severe social inequality WANDA S. TSENG, DEPUTY DIRECTOR, ASIA PACIFIC in China. Although not often reported in the Western media, DEPARTMENT, INTERNATIONAL MONETARY FUND these problems nevertheless have the potential of derailing China’s economic development. A more fundamental prob- Wanda Tseng of the IMF began this discussion by com- lem involves the adaptability of the Communist regime to menting that China’s financial reform is tied inexorably with market institutions. The main question for the future of China reform of its lumbering state-owned enterprises (SOE). With- is this: can the current regime carry out necessary market out fundamental change in the ownership structure of China’s reforms before a crisis of confidence triggers a massive exo- industries, the government will need to inject massive amounts dus of foreign investors? During the question and answer of capital into SOEs. On the topic of non-performing loans, session, Smith further pointed out that while the pharmaceu- Tseng urged Japan to fully confront its giant non-performing tical industry is beginning cooperative relationships with loan (NPL) problem and accelerate the dissolution of bad Chinese research institutions, it is still wary of the lax en- debt. Otherwise, Japan will face slower growth in the near forcement of intellectual property rights in China. Disagree- future. China must similarly hasten to reform its state banking with Smith’s pessimistic assessment, Prof. Huang Yasheng ing system and deal with its own NPL problem. There is also countered that China’s high savings rate and export growth a need to strengthen corporate governance across Asia, so provide a cushion for institutional inefficiencies. However, that financial problems are not hidden by banks and corpora- Prof. Huang warns that the current inflated growth rate only tions. Finally, in order to effect these reforms, Asian govern- allows the leadership to delay painful, but ultimately neces- ments need to establish social safety nets to ensure a mini- sary, reform measures. mum level of welfare during the tumultuous reform process. Refocusing on the entire region, Wanda Tseng of the When asked whether or not China needed to privatize its International Monetary Fund provided a richly empirical pic- state banks, Tseng acknowledged that ownership reform in ture of regional economic conditions. Disagreeing with Ko, China’s banking sector is likely to be a gradual process led

Harvard Asia Quarterly 58 Spring 2002 by fledging joint-stock banks in China. ness. In fact, foreign companies frequently complain of local Zhu Guang Yao, who serves concurrently as executive protectionism because local officials often hold a stake in director of the World Bank’s China Office and director of local enterprises. Another problem is that China has a cash the international division of China’s Ministry of Finance, gave economy, which makes the tracing of money difficult. Until his remarks as an MOF official. Zhu first pointed out that recently, anyone has been able to open a bank account under three major developments – China’s accession to the WTO, another person’s name. While the government acknowledges Beijing’s winning bid for the Olympics, and the convention this problem and has tightened regulations on opening ac- of APEC in Shanghai – had a significant impact on China’s counts, owners of pre-existing accounts do not have to re- future trajectory. On the whole, these three major develop- veal their true identities for another three years. Finally, Chi- ments have brought China further along the path of reform nese prosecutors refuse to entrap public officials by offering and integration with the global economy. Zhu then echoed them bribes because, according to Chinese officials, “every- Tseng’s concern with SOEs and banking reform. He stated one will take it.” This perhaps speaks to a deeper problem in that changing the traditional mentality of the government will the system. be a significant yet formidable step in the overall reform pro- Professor David Kang of Dartmouth University identi- cess. In sum, the government must learn to cut off its ties fied some of the underlying causes of corruption. He cau- with SOEs. Furthermore, China must open up to the world in tioned that the elimination of corruption will be a gradual a mutually beneficial way and comply with all the interna- process in Asia. Essentially, the more power politicians have tional agreements that it enters. He ended his remarks by say- over the economy, the more incentives businesses have of ing that China sees regional cooperation as supplementary influencing politicians. In Asia, corruption was a severe prob- to, rather than a replacement for, global cooperation. lem especially during the authoritarian eras in many coun- Sounding a dissenting note to the previous speakers’ pro- tries. Contrary to traditional expectations, however, democ- reform agenda, Prof. Alice Amsden of MIT argued that many ratization often allowed businesses to influence politicians of Asia’s woes are results of the global recession, not of the more. With democratization, the cost of power increased such insufficiency of reform in Asian countries. Recalling the his- that both politicians and businesses have incentives to in- tory of development in Asia, Amsden pointed out that West- crease rent-seeking activities. The long-term solution is for ern reporting of Asian business practices has always been governments to reduce their control of the economy, but the too pessimistic, perhaps originating from jealousy or distrust integration of the government and economy is so tight in many of Asian successes. Furthermore, many Asian policy makers countries that a withdrawal is gradual at best. Economic cri- have now adopted the perspective of the West and are work- sis might become one mechanism whereby politicians are ing toward Western models of economic organization. Still, forced to relinquish economic power. the Asian model has produced extraordinary high growth Finally, Akira Kojima, managing director of the Japa- across the region. Why should Asia change? Why should nese daily Nihon Keizai Shimbun, observed that despite pro- China reform when it has a highly successful telecommuni- tracted stagnation in the Japanese economy, Japanese bureau- cations sector? Why should Japan reorganize its society when crats continue to wield enormous power. They continue to it has enjoyed unparalleled social harmony for generations? hold sway over legislative drafting, and the Diet usually ap- Her provocative comments drew many responses from the proves bills that are submitted. Meanwhile, bureaucrats all audience and from her fellow panelists, most of whom pointed look forward to high-paying private sector jobs upon their out that active state intervention popular among Asian coun- retirements. Although few outright bribes are offered, com- tries discourages private investment and severely undermines fortable retirements give bureaucrats strong incentives to the efficiency of capital allocation in these economies. promote protectionist policies for certain industries. More- over, the opaqueness of the entire process gives bureaucrats enormous discretion in policy making. Because written laws STREAM 1, DISCUSSION PANEL 3: CORRUPTION are insufficiently specific about legal behavior, businesses IN ASIA have to constantly consult the bureaucracy about their next IRA BELKIN, FORMER CHINA LEGAL EXCHANGE OFFICER, US moves. Although a law passed in 2000 forces the bureau- DEPARTMENT OF JUSTICE cracy to release more written information to the private sec- DAVID KANG, PROFESSOR OF POLITICAL SCIENCE, DARTMOUTH tor, the new statute does not affect “special administrative UNIVERSITY guidance,” which is often given orally by individual bureau- AKIRA KOJIMA, MANAGING DIRECTOR AND CHIEF EDITORIALIST, crats. This obsolete practice raises transaction costs to un- NIHON KEIZAI SHIMBUN (NIKKEI) imaginable proportions. Kojima ended his remarks by stat- ing that Japan urgently needs to make laws that force gov- Ira Belkin, a Department of Justice official who observed ernment officials to increase the transparency of the bureau- corruption investigations while on an exchange program to cracy. the Chinese Supreme People’s Procuratorate, began his remarks by noting that corruption is an openly discussed issue in China, both among the elite and the general population. Belkin made several observations about the problem of corruption in China. First, in Chinese criminal law, the defini- tion of corruption only includes the exchange of money and property, and not compensation through ownership in a busi-

Harvard Asia Quarterly Spring 2002 59 STREAM 3, DISCUSSION PANEL 2(B): MEDIA AND STREAM 3, DISCUSSION PANEL 3: LEGAL SER- ENTERTAINMENT VICES EKKEHARD RATHGEBER, PRESIDENT, DIRECTGROUP BERTELSMANN LAWRENCE A. DARBY III, PARTNER, KAYE, SCHOLER LLP ASIA YONG G. LEE, PARTNER, CLEARY, GOTTLIEB, STEEN & HAMILTON WU XIAOYONG, CEO, PHOENIX SATELLITE TELEVISION (US) DETLEV VAGTS, PROFESSOR, HARVARD LAW SCHOOL SHERYL WUDUNN, PROJECT DIRECTOR, STRATEGIC PLANNING GROUP, NEW YORK TIMES This panel examined the challenges facing the legal services sector in Asia, with an emphasis on the role of foreign The importance of the Asian media industry is linked law firms operating in Asia. Both Prof. Vagts and Lawrence with the global demographic and economic shift in favor of Darby stressed that it is critical for foreign firms to over- Asia. By 2050, Asia may account for more than 50% of glo- come the difficulties of language, culture, and knowledge of bal GDP. China and India will provide an increased propor- local legal rules. tion of human capital to the global market. The rapid growth Darby explained that the nascent legal system and the of the Internet in Asia also magnifies the impact that infor- relatively immature state of legislation in China made legal mation will have there. For example, in expanding its trans- advising difficult at times. Problems include the lack of legal portation infrastructure, China is concurrently building fi- title to property, the non-enforceability of contracts, regula- ber-optics in order for an increased number of people in less tory uncertainties, and corruption. However, Darby also rec- urban areas to have Internet access. In light of these factors, ognized that the situation was improving as China moves away Sheryl WuDunn underscored the importance of the Asian from a socialist economy toward one that embraces market media industry to “build bridges between the East and West” forces. Focusing on American firms operating in Asia, he to enable understanding and facilitate co-operation. explained that the focal point is China and that there is are at Another key to understanding the media industry is the present limited opportunities in other areas, such as South identification of the different functions played by the media East Asia. in Asia as opposed to the West. In Asian countries such as Foreign law firms in China primarily perform “due dili- China, the degree of government influence is quite substan- gence” work for listings of Chinese firms in foreign stock tial. Rather than checking the abuse of governmental authori- markets, such as the New York Stock Exchange, and legal ties, the media is often an instrument of government control. work related to the establishment of equity joint ventures be- WuDunn stated that there exists a limited degree of freedom tween foreign and local parties. The special position of Hong in the reporting of sensitive political issues. Kong in relation to China was also explored. Its role of pro- Another theme of the panel was the tension between the viding quality legal advice to foreign investors and its influ- need for Asian nations to open their borders to international ence in China’s substantive law were highlighted, particu- information flows and the preservation of local identity and larly in the area of securities regulation, where Hong Kong’s culture. In the Chinese context, the panel examined whether Securities and Futures Commission has assisted in the devel- the blocking of Internet access contradicted China’s goal of opment of Chinese legislation. economic development, increasing openness, and transpar- Several unique points about the Asian legal services in- ency. In response to this question, the panel explained that dustry were noted, including the relatively small proportion the target of censorship is generally politically sensitive ma- of lawyers in the entire population. As pointed out by Yong terial and not information used for business purposes. Lee, this may be more of a definitional rather than quantita- Wu Xiaoyong, speaking from his experience in dealing tive difference. The broad nature of legal work in Western with the Chinese bureaucracy in establishing a non-govern- countries, such as the United States, would be performed by ment controlled television broadcasting company, claimed non-lawyers such as accountants and notary publics in Asian that the key to success was high quality programming that countries. did not contain politically controversial material. When asked When asked whether there is a “glass ceiling” on the what was the central ingredient of Pheonix’s success in China, promotion prospects of Asian lawyers working abroad, Lee Wu simply responded, “we’ve got the right stuff” which was explained that overt and blatant discrimination is uncommon an allusion to both the neutral content provided and also the but conceded that there may exist unconscious factors in de- positive relationship that Pheonix enjoys with the Chinese cision-makers’ minds that work to the disadvantage of Asian government. One recent example of Pheonix’s success was lawyers. He also said that although Asian representation at its coverage of the September 11 terrorist attack, which ex- partnership level is relatively low at the moment, there are ceeded both in terms of quality and duration the coverage promising signs of it increasing in the near future. provided by the government network, CCTV. The panel concluded by examining some of the difficulties faced by the media, including the relatively low level of development of intellectual property rights in Asia, the need to create truly localized content, and the impact of media on traditional culture within Asia.

Harvard Asia Quarterly 60 Spring 2002 Harvard Asia Quarterly Spring 2002 61 CONFERENCE FOCUS INDIA: A TURNING POINT ON TRADE?

BY SUSAN ESSERMAN AND ndia has pursued a starkly different course of economic development ARUN VENKATARAMAN from the larger trading nations of Asia. While many Asian countries Ihave pursued an export-led growth strategy, India has resisted to its detriment, adopting instead an inward-looking approach based on import substitution. It has largely been marginalized from the flurry of regional Susan Esserman is a partner in the international trade and economic integration initiatives. However, recent developments, group of Steptoe & Johnson, a Washington D.C. based law firm, and served as Deputy US Trade including India’s steps toward market liberalization, the emergence of a Representative in the Clinton administration. As world class information technology sector in India, and the entry of China Deputy US Trade Representative, she was into the WTO, may prompt India to adopt a more affirmative trade strat- responsible for WTO negotiations with Europe, egy. India, Russia and Africa. She has also served as the US Trade Representative General Counsel, where she was responsible for formulating WTO EMERGING FROM THE LICENSE RAJ litigation strategy. The dominant influence in India’s economic philosophy since its in- Arun Venkataraman is an associate in the international group of Steptoe & Johnson in dependence has been India’s founding Prime Minister Jawaharlal Nehru. Washington D.C., where his practice focuses on Nehru sought to emulate what he viewed as the successes of the Soviet issues arising under the US trade and customs economic model: large-scale industrialization and government ownership laws and the WTO agreements. Prior to joining of the key sectors of the economy, in conjunction with high barriers for the firm, he was a law clerk to Judge Jane A. Restani of the US Court of International Trade. imports. This socialist approach was reinforced by Gandhian ideals of self-reliance. The 1950s and 1960s saw a particularly dramatic extension of government restrictions on the development of the private sector and on relations with foreign companies. This era gave birth to what became known as the “License Raj”, an intricate patchwork of regulations used by the government to decide, on a case-by-case basis, the extent to which private firms were permitted to import certain inputs, expand their operations, and partner with foreign companies in joint ventures. The central government’s restrictions during this time period and through the 1970s led to the withdrawal of the already very limited presence of multinationals such as Coca-Cola and IBM from the Indian market. Because of this micromanagement of the private sector, hostility to foreign direct investment (FDI), and simultaneous expansion of already-high barriers to imports, the growth of Indian entrepreneurship was limited. Private firms were not permitted to respond to market forces due to the government’s regulation of the entry of competitors into various geographical and prod- uct markets. In particular, the public sector stagnated because it failed to develop the discipline and economic efficiencies traditionally imposed by a freely functioning marketplace. The disappointing returns from Nehru’s economic legacy stand in contrast to the rapid economic growth of other Asian economies during the same time period. Between 1960 and 1985, India’s GDP per capita increased annually by less than half of one percent. During that same period, the high-performing Asian economies of Japan, Hong Kong, South Korea, Singapore, Taiwan, Indonesia, Malaysia and Thailand had a collective average increase in GDP per capita of greater than 3.5%. In addition, the opening of China, beginning in 1978, helped to stimulate economic growth: between 1975 and 1990, China’s economy grew by 15%, compared with India’s 5% for the same period. The dynamism of these other Asian economies has been premised on export-led growth strategies that emphasized the export of manufactured goods in which they

Harvard Asia Quarterly 62 Spring 2002 held a comparative advantage. toward economic reforms. Indian observers were also struck While East Asian economies reaped the rewards of mar- by the swift and severe consequences of the Asian financial ket-oriented growth policies, another dramatic development crisis. Rightly or wrongly, certain Indian policymakers, as of special consequence to India began unfolding in the late well as those in other developing countries, viewed the crisis 1980s: the collapse of the Soviet Union and the general shift as a direct consequence of excessive and overly hasty liber- towards market economies throughout Eastern Europe and alization of financial controls. the former USSR. Not only did the end of the Cold War sig- These and other factors significantly slowed the pace of nal the failure of India’s model for economic planning as a reform in the 1990s. For example, consistent with its obliga- conceptual matter, it also drastically curtailed one of India’s tions undertaken in the Uruguay Round and an adverse WTO most significant trading relationships to date – that with the ruling, India eliminated quantitative restrictions on approxi- Soviet Union and the Eastern Bloc. Whereas the former So- mately 1500 products. Unfortunately, rather than utilize the viet Union and Eastern Europe collectively accounted for liberalizing measures as an opportunity to enhance the effi- 13.4% of India’s imports and 25.5% of exports in 1990, by ciencies and competitiveness of producers in the Indian mar- 1992 those figures had dropped to 2.2% and 4.4% respec- ket, as well as to attract investment, the Indian government tively. India had to look elsewhere for has chosen to impose a maze of addi- new export markets and for those re- tional new restrictions, such as in- sources and supplies it had until 1991 creased tariffs and taxes and other been able to secure from states in the India continues to look at the complex measures. Indeed, as the re- Soviet sphere of influence. WTO in a defensive, cent India Planning Commission Re- However dramatic these develop- conservative way rather than as port notes, India’s average tariffs have ments were, a fundamental shift in an affirmative vehicle to achieve increased from 24.6% to 35.1% in the India’s economic policies did not oc- its market opening goals. last five years. By replacing the lifted cur until a balance of payments crisis quantitative restrictions with a series necessitating a major rethinking of of trade barriers, India has missed an long-held Nehruvian beliefs. In exchange for IMF assistance, opportunity to present itself favorably to the international India embarked upon the most significant economic reforms investor community. This is particularly damaging since China in its post-independence history. These reforms included the has a far more investor-friendly image, with its engagement following trade-related measures: (1) removal of certain li- in sweeping trade and economic reforms as part of its WTO censing requirements for most capital imports; (2) permit- accession. Hopefully, the Indian government will take steps ting majority foreign ownership of firms in certain sectors to reverse the situation, demonstrating to the investor com- and inviting participation by foreign firms in major infra- munity its intention to lower trade barriers on a consistent structure projects; (3) reduction in export controls/restric- basis. tions; (4) full rupee convertibility with a floating exchange rate; and (5) sizeable reductions in weighted average tariffs. INDIA’S APPROACH TO TRADE It should be noted, however, that tariffs were reduced by large amounts principally because they had been so high to begin To the extent India has engaged in trade with other coun- with. Furthermore, notwithstanding these reductions, India’s tries, it has done so primarily through the multilateral forum. tariffs remain quite high and are still among the highest in India was a founding member of GATT, although by no means the world. a leader or active proponent of the multilateral liberalization Even as various members of India’s elite embraced the of trade restrictions. As a reactive participant in a series of liberalization efforts that Prime Minister Narasimha Rao was trade rounds that resulted in a substantial worldwide reduc- forced to undertake starting in 1991, there remained a strong tion of tariffs and certain non-tariff barriers, India itself lib- undercurrent of resistance in the mid- to late 1990s, which eralized very little through GATT. India’s minimal liberal- was reinforced by a number of factors. First, India experi- ization under the GATT regime, in contrast to many other enced a series of unstable and short-lived governments after GATT members, was possible because relatively few de- Rao’s tenure ended in 1996. No single political party was mands were made on India by other states to open its mar- capable of holding office or even leading a coalition into kets, and India’s import substitution policy was inconsistent power and remaining for one full year. In the absence of ex- with self-initiated trade liberalization initiatives. Ironically, ternal pressures such as the 1991 balance of payments crisis, it would be difficult, if not impossible, for India to enter the these administrations lacked the political capital and there- WTO today with the high trade barriers it has maintained in fore the commitment to continue and extend the previous the fifty years since it joined GATT. New WTO members reforms. must comprehensively lower their trade barriers in order to External factors also raised doubts in Indian minds about join the WTO. For example, China was required as a condi- the pace and extent of reform. Events in Russia highlighted tion of WTO entry to commit to tariffs that are, on average, the difficulties inherent in the rapid transformation from a one-half of India’s. socialist to a market economy. Most notably, the massive dis- India continues to look at the WTO in a defensive, con- placement of workers, shortage of food and other goods, and servative way rather than as an affirmative vehicle to achieve drain on foreign exchange reserves, possibly followed by the its market opening goals. This is especially regrettable given rise of nationalist and other extremist political parties, coun- the richness of the Indian economy and the many opportuni- seled in favor of caution when contemplating further steps ties for India’s private sector presented by WTO negotia-

Harvard Asia Quarterly Spring 2002 63 tions. India’s traditional anti-trade stance damages its desired minimal is an obvious reflection of the fact that India and its image as a modern economy hospitable to investment and South Asian neighbors share the comparative advantage in a greater economic interaction with the outside world. At Doha, highly similar basket of goods and services. Furthermore, India took a strong position against the launch of a new round because the comparative advantage is similar, India’s neigh- of trade talks. In doing so, India purported to be the leader of bors fear that a certain inherent advantage exists for Indian the developing world, but in reality, other developing coun- producers by virtue of their significantly larger market and tries had abandoned India. Indian government representa- access to resources. Finally, because there is little intra- tives cling to this old fiction of a unified developing-country SAARC trade, there are no compelling economic rationales opposition to further liberalization of global trade, when the for liberalizing trade solely within South Asia. realities in 2002 reveal that developing countries are a diverse group of states with greatly differing needs and inter- PROSPECTS FOR A NEW TRADE STRATEGY? ests. While India was the last country opposing a new round While contiguous bilateral and regional agreements do of global trade negotiations, the round itself is in India’s in- not appear promising, several recent developments may terests. The fundamental focus of the prompt India to pursue initiatives in new negotiations is on market access the broader Asian region. These ini- in agriculture, services, and industrial tiatives are likely to produce more tan- products – all of which are areas The emergence of China as an gible results for the Indian economy where India stands to gain. India has economic powerhouse is both a than previous attempts at South Asian an interest in reducing Western agri- challenge and a provocation to trading arrangements because there is cultural subsidies that are so detri- the Indian government. a possibility of exchanging goods and mental to its own agricultural devel- services with countries with a com- opment, which will free up resources parative advantage in complementary for more pressing developmental needs. India also maintains rather than competing sectors. a comparative advantage in a number of services sectors, First, the emergence of China as an economic power- particularly in computer services, which have increased over house, overshadowing much of the continent’s economic 400% in the decade after the institution of economic reforms. development in recent years, is both a challenge and a provo- India’s particular strength in certain critical sectors, such as cation to the Indian government. While the upward climb of high-tech services, only reinforces the possibility of gains the Asian Tigers and the utter failure of the Soviet economic from a new round of services liberalization. The proposed model did not shock India out of its isolationist stance, China’s agenda for the new round is also likely to benefit India’s in- growing economic influence in India’s backyard may pro- creasing exports of garments, pharmaceuticals, gems, as well vide India with sufficient incentive to seek greater economic as IT-related goods and services. Given these strengths and linkages with its Asian neighbors and take a more pro-active especially since India is not in significant regional trading stance in the WTO. China’s accession to the WTO will only alliances, India’s interests are fully consistent with active and increase its economic dominance, as companies seek to take positive engagement in the WTO negotiations, particularly advantage of the market openings and investment opportuni- as a means of complementing the domestic liberalization ties newly available. As one Indian government official stated measures begun in 1991. recently, “With the total dismantling of the non-tariff barri- Although regionalism has not historically played a criti- ers by the developed world in the next few years and China’s cal role in its economic policy, India has taken preliminary entry in the WTO, the situation for India can only be consid- steps through the South Asian Association for Regional Co- ered ominous unless various steps are initiated at all con- operation (SAARC). Under the aegis of SAARC, India has cerned levels.” Furthermore, China’s recent overtures to entered into the South Asian Preferential Trading Area ASEAN have culminated in a jointly-expressed intention to (SAPTA), viewed as the precursor to the eventual establish- establish a free trade area between ASEAN and China within ment of the South Asian Free Trade Area (SAFTA). How- ten years. ever, integration along these lines is fundamentally unrealis- These changes add to the pressure exerted by the prolif- tic, given that political tensions between India and Pakistan eration of regional trade agreements in Asia, which involves are an ongoing and obvious impediment to genuine progress virtually every other major Asian country except India. In in SAARC trade initiatives. As a result, India has pursued the last year, regional initiatives have included (1) China and market-opening initiatives independently with individual Japan’s aforementioned offers; (2) Japan’s separate negotia- SAARC members other than Pakistan. Such initiatives in- tions with Singapore and South Korea for free trade agree- clude a 1996 agreement reducing customs duties and quanti- ments; (3) Korea’s proposed free trade agreements (FTA) tative restrictions on goods traded with Nepal; a 1998 free with Thailand and New Zealand; (4) Singapore’s proposed trade agreement with Sri Lanka; and an agreement with FTAs with New Zealand and Australia; and (5) the proposed Bangladesh to exempt Bangladeshi goods from quantitative creation of a free trade area between ASEAN and Australia- and import licensing restrictions. New Zealand. Numerous initiatives between Asian and non- These independent bilateral free trade agreements are Asian states, such as the United States, have also been unlikely to be of limited economic value, however, because in- dertaken. As Singapore Trade Minister George Yeo observed, tra-SAARC trade is negligible, still accounting for only 4% such initiatives are often driven by fear and insecurity. Given of the member states’ total trade. That intra-SAARC trade is the pattern of trade agreements developing around India, such

Harvard Asia Quarterly 64 Spring 2002 fear and insecurity arising from India’s exclusion from regional trade agreements may well become powerful motiva- tors for necessary reforms. Finally, there is likely to be more political pressure on India to pursue opportunities within the broader Asian region and internationally. First, India has strong assets in the knowledge and services industries – particularly in the software, information and entertainment services, where it pos- sesses a comparative advantage over other Asian competitors. Second, there are leading industrial companies within India that are currently looking to expand in foreign markets. These new interests and world-class export sectors stand to benefit from trade liberalization. Although India has not been an active world trader or regional player in Asia, these recent developments raise the prospect of greater trade engagement by India with its Asian neighbors and globally. Whether the government of India has the resolve to pursue such a forward-looking trade policy remains to be seen.

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Harvard Asia Quarterly 68 Spring 2002