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The Williamsburg Conference 1997

1997 Williamsburg Statement

Managing Change in Asia

This is a year of historic changes in Asia, perhaps the most dramatic being Hong Kong's reversion to China. Other momentous shifts are also under way in the region as it experiences slower economic growth and grapples with a new set of social, political, and security challenges.

To contribute to understanding of these changes and their implications, the Asia Society brought together leaders in government, business, academia, and journalism from 19 countries and economies on both sides of the Pacific for the twenty-fifth Williamsburg Conference. Held in Hong Kong on May 1619, 1997, the conference was convened by Tommy Koh of Singapore, Yoshio Okawara of Japan, and Nicholas Platt of the United States. Participants examined five principal issues: Hong Kong and its relationship with China, regional security, prospects for reconciliation and growth in South Asia, Asia's economic outlook, and U.S. policy toward Asia.

Conference participants were generally positive about Hong Kong's prospects, provided the transition period is handled with sensitivity by China, Hong Kong, and the international community. There was a consensus that everyone involved wants the "one country, two systems" policy to succeed: China, which wants to show the worldincluding Taiwanthat the concept works; Hong Kong, whose people are deeply attached to their way of life; and other countries, which share strong interests in the maintenance of Hong Kong's freedoms and prosperity. Nonetheless, concerns are understandable; this formula has never been implemented, and risks are inherent in a change this momentous. Participants expressed hope that Hong Kong would be allowed time to test the concept. In this context, the renewal of China's most-favored-nation trade status was seen as vital.

Participants heard that India and Pakistan now have what may be their best opportunity since Partition to make genuine progress toward peace. As demonstrated by the May 1997 summit in the Maldives, both countries have new prime ministers who are committed to reducing tensions. More important, the peoples of both countriesinspired in part by East Asian economic successare starting to demand a redirection of massive military resources into economic development and social programs.

The conference concluded that Southeast Asia is entering a new, more complex phase of economic growth, as the basis of growth shifts from increased inputs to improved productivity. In this stage of economic development, emphasis needs to be placed on economic and political management, with greater investment in infrastructure and education, including worker retraining. Competitive pressures require that countries maintain their commitment to economic liberalization, but governments have a role to play in economic restructuring and in addressing the human costs of economic globalization.

Conference participants reaffirmed their strong support for the Asia-Pacific Economic Cooperation (APEC) forum, which has a major role in promoting a rules-based, free-market system. APEC's advocacy of "open regionalism" and its commitment to liberalized trade and investment were also endorsed. The conference called for the United States to maintain its commitment to APEC and acknowledged that it is an invaluable forum for informal talks among regional leaders. To fulfill its role in driving regional cooperation, APEC must make concrete progress, involve business in its policy making process, and mobilize public support. It was noted that North America and Europe remain the final destinations for the bulk of Asian exports, despite a rise in intra-Asian trade.

Throughout the region, the rise of the middle class is creating increasing pressure for governments to become more open and responsive to their citizens. The conference concluded that there is a growing urgency to ensure government accountability and significantly reduce the gap between rich and poor, a major concern across the region. Discussion of human rights by nongovernmental organizations has encouraged positive changes in the region. Some participants stressed the usefulness of quiet diplomacy and a multilateral approach.

Critical developments are under way on the Korean peninsula. The food crisis in North Korea has implications for the survival of the Pyongyang regime, but it also gives the international community an opportunity to engage the North and encourage movement toward peace talks. The efforts of the Korean Peninsula Energy Development Organization (KEDO) and the development of other practical approaches were endorsed. Of the possible scenarios for North Korea, the best may be gradual integration with the South. Successfully managing this reunion would require significant involvement of the international community.

Participants stressed the need for the United States to remain engaged with the region, including the maintenance of a credible military presence. This applies even if reunification of the Korean peninsula is achieved. Concern was also voiced over friction in U.S.-China relations. There was a consensus on the need for President Bill Clinton to show strong leadership on Asia policy. China could also do more to address American concerns, for example, in managing human rights issues and promoting military transparency.

Successful management of the momentous changes taking place in Asia will require deft leadership buttressed by strong popular support. The participants of the Williamsburg Conference believe that their discussions revealed both the complexity of these changes and the necessity of artfully managing them, in Hong Kong, South Asia, the Korean peninsula, and elsewhere.