Mood Is Grim at Southeast Asian Summit

What a difference a few years make. Not long ago, the annual summit of Southeast Asian leaders was a clubby affair where business was done on the golf course and the upbeat talk was of soaring economies and the coming “Asian Century.”

But Tuesday, at the start of the latest, two-day summit, the mood was somber and golf was not on the agenda. Dark shadows hang over the region and its 500 million inhabitants. The economic miracle has turned into a fiscal nightmare. Development was yesterday’s theme; recovery is today’s.

For the nine leaders--five prime ministers, two presidents, one sultan and one general--the task at hand in Hanoi is both straightforward and elusive: to formulate a strategy that will restore business confidence and recharge economies in the beleaguered region.

It is a tall order, and few economists expect any far-reaching plan that goes much beyond well-meaning words. But at the same time, Western diplomats are encouraged by the fact that the leaders are making no attempt to mask the depth of their problems or the need for reform if the Assn. of Southeast Asian Nations, or ASEAN, is to regain its competitiveness and health.

“ASEAN is facing its greatest challenge since its founding 31 years ago,” Philippine President Joseph Estrada said. “The financial crisis that started in the region now plagues the entire world. In place of phenomenal growth, recession now stalks countries in the region. The human toll of the financial crisis is even more disturbing.”

Singaporean Prime Minister Goh Chok Tong was equally grim in his assessment. “All our economies have been badly damaged,” he said. “Our wealth has been decimated. Millions of people have lost their jobs. The political fallout has fractured the affected societies.”

According to ASEAN officials, the economic crisis that began with the devaluation of the Thai baht 17 months ago has pushed 40 million Asians into poverty. In Indonesia alone, 20 million people have lost their jobs. Growth rates that were routinely averaging 8% to 10% a year have fallen into negative territory in several countries.

One of the problems ASEAN has in responding to the crisis is that the nine member states represent myriad ideologies, cultures, religions, races and political philosophies.

Myanmar, the country formerly known as Burma, is run by a group of draconian generals, while the Philippines is a full democracy. Vietnam clings to a state-controlled economy, while Thailand embraces a freewheeling capitalistic system. Malaysia has adopted currency controls--to isolate itself from international “predatory speculators,” Prime Minister Mahathir Mohamad said Tuesday--while Singapore has no controls and promotes policies favorable to investors.

ASEAN was formed, with U.S. backing, in 1967 with five members: Indonesia, the Philippines, Malaysia, Singapore and Thailand. Although never intended to be a military alliance, it became a bulwark against the spread of North Vietnamese communism. During the Vietnam War, it was the world’s only pro-American regional forum other than the North Atlantic Treaty Organization. Ironically, its host for this summit, Vietnam, remains one of the world’s last Communist nations.

In addition to the economic crisis, the civil chaos in Indonesia--ASEAN’s most influential member and the seat of the association’s secretariat--is haunting the summit. President Suharto, who was forced to resign during a popular uprising in May, was a major power in establishing ASEAN and promoting its international influence and credibility. He had transformed Indonesia from a regional bully into a regional partner for promoting prosperity.

ASEAN leaders worry that a continuing economic meltdown could lead to further social upheavals in their countries. They are also concerned about China’s growing influence in the region and its intentions in the Spratly Islands, a strategic island chain west of the Philippines in the South China Sea that is claimed in whole or in part by China, Taiwan and four ASEAN member states. China has increased its military presence there recently.

ASEAN’s members are Vietnam, Laos, Thailand, Brunei, Myanmar, Singapore, Indonesia, Malaysia and the Philippines. Southeast Asia’s 10th country, Cambodia, was denied membership after a coup last year. Now that it has a coalition government, ASEAN leaders said Tuesday that Cambodia will be granted membership, probably within a month.