The Williamsburg Conference 2002

The 30th Williamsburg Conference was held in Kuala Lumpur, Malaysia, from April 11 to April 13, 2002. The conference, hosted by the Asian Strategy and Leadership Institute of Malaysia, was convened by Carla A. Hills of the United States, Tommy T.B. Koh of Singapore, and Minoru Murofushi of Japan.


Agenda

The Thirtieth Williamsburg Conference was held in Kuala Lumpur,Malaysia, from April 11 to April 13, 2002. The conference, hosted by the Asian Strategy and Leadership Institute of Malaysia, was convened by Carla A. Hills of the United States, Tommy T.B. Koh of Singapore, and Minoru Murofushi of Japan.

Thursday, April 11
Opening Reception and Dinner
Keynote Speech:
Malaysia and Asia: Seeking a Balance Between Peace and Prosperity
The Hon. Dato Seri Dr. Mahathir Bin Mohamad, Prime Minister of Malaysia

Friday, April 12
Session 1: The War on Terrorism: Impact on Peace and Stability in Asia
  • How well are the United States and Asia working together on the war on terrorism? As the international coalition against terrorism focuses on terrorist activities/support in Asia, how are Asian countries responding?
  • What are the implications of the war on terrorism for the regional "hotspots" in Asia (Kashmir crisis, North and South Korea, cross-straits)?
  • Has the war on terrorism created opportunities for peace and cooperation between countries in the region? What are the implications for relations between the U.S., China, Japan, and Russia?
  • Can countries work together to combat transnational issues such as organized crime, drug trafficking, arms sales, illegal immigration, and fundamentalism?
Chair
Nicholas Platt, President, Asia Society
Opening Discussants
P.R. Chari, Director, Institute of Peace and Conflict Studies
Pan Guang, Director, Shanghai Center of International Studies
Javed Jabbar, Chairman, South Asian Media Association, MNJ Communications Ltd.
Noordin Sopiee, Chairman & CEO, Institute of Strategic and International Studies

Session 2: The Economic Downturn: Prospects for Regional Economic Relations
  • What are the causes and consequences of the current economic downturn in Asia? What must the traditional powerhouses like South Korea, Thailand, Singapore, and Taiwan, to name a few, do to turn around? What are the prospects for sustained growth in China? What are Japan's economic prospects?
  • What can plurilateral organizations in Asia (WTO, ASEAN, APEC, ADB, and others) do to help? What can governments in the region do to enhance cooperation within these organizations? What are the prospects for AFTA and a regionwide cross-production initiative?
  • How are countries in the region addressing social concerns such as aging populations, labor shortages, and women in the workforce?
Chair
Minoru Murofushi, Chairman, ITOCHU Corporation
Opening Discussants
Motoshige Itoh, Professor of Economics, Tokyo University
Joseph Lian, Member, Central Policy Unit, The Government of Hong Kong,SAR
Karim Raslan, Partner, Raslan Loong

Saturday, April 13
Session 3: Malaysia and Southeast Asia
  • As an Asian nation with a large Muslim population, how does Malaysia perceive and deal with the war on terrorism?
  • How does Malaysia see its role in the region and Asia?
  • Describe the likely next generation of leaders in Malaysia and the rest of Southeast Asia and how they are likely to deal with new leaders in China, South Korea, and other countries in the region. How are they likely to view the world and in what directions are they likely to take Malaysia and Southeast Asia in the coming years?
  • What can ASEAN+3 do to build cooperation and help the region weather the worldwide economic downturn? Are the economic fundamentals in place for a quick recovery?
Chair
Tommy T. B. Koh, Ambassador-at-Large, Ministry of Foreign Affairs
Opening Discussants
Thanong Bidaya, Economic Advisor to the Prime Minister of Thailand
Karim Raslan, Partner, Raslan Loong
Michael Richardson, Senior Asia-Pacific Correspondent, International Herald Tribune
Jusuf Wanandi, Member, Board of Trustees, Center for Strategic and International Studies

Session 4: Role of the United States in the Region
  • What are the major tenets of U.S. policy toward Asia? Do nations in the region have concerns regarding U.S. policy in the region? How are they dealing with those concerns? Are there better ways to address these concerns?
  • How have recent events affected the proposed US implementation of NMD/TMD? If implemented will it encourage a regional arms race?
  • What is the impact of U.S. domestic politics on U.S.-Asia policy? Have these changed from what they were previously?
  • How might the 2002 mid-term Congressional elections influence U.S. foreign policy?

Chair
Carla A. Hills, Chairman & CEO, Hills & Company
Opening Discussants
James A. Kelly, Assistant Secretary of State for East Asia and the Pacific, U.S. Department of State
Timothy Ong, Executive Chairman, Asia-Inc.
Norman J. Ornstein, Resident Scholar, American Enterprise Institute for Public Policy Research
Seiken Sugiura, Senior Vice-Minister for Foreign Affairs, Japan

Foreword

In April 2002 the Asia Society, in partnership with the Asian Strategyand Leadership Institute, brought together 51 leaders in government,business, academia, and journalism from 18 countries and economies onboth sides of the Pacific for the Thirtieth Williamsburg Conference.Held in Kuala Lumpur at the Sunway Lagoon Resort Hotel, this was thefirst Williamsburg Conference to be convened in Malaysia since 1987.

This year's conference continued the tradition oftranspacific dialogue on key issues in Asia. Deep in the heart ofSoutheast Asia, with a level of political and economic developmentsurpassed by some and envied by others, Kuala Lumpur provided anexcellent venue. Last year, in Okinawa, Japan, the WilliamsburgConference focused on the economics of the region, issues ofinformation technology, the transition of power in the United States,and political and security prospects.

Much has changed. This year, participants were concerned withthe global economic downturn, the prospects for a new generation ofleaders in Asia, the role of the United States in the region, and-amajor theme throughout-terrorism. The issue of terrorism, a topic thatwent largely unnoticed at last year's conference, has pervaded theconduct of global affairs since September 11. The possibility for rapidshifts in global interaction and the need to understand such changeunderline the importance of the annual Williamsburg Conference. Inlight of the new international environment, participants wereencouraged to think outside the box in their discussions, both formaland informal. They proved up to the task.

Williamsburg coconvenors Carla A. Hills of the United States,Tommy T.B. Koh of Singapore, and Minoru "Jack" Murofushi of Japanenlisted a superb group of conference participants and set forth asharply focused yet thorough agenda. They chaired their respectivepanels with great skill and impartiality. In addition, our local host,the Asian Strategy and Leadership Institute, ably led by MirzanMahathir and Michael Yeoh, went above and beyond the call of duty toensure that all of the conference arrangements were carried outgraciously and masterfully. Karim Raslan, long a friend of the AsiaSociety, kindly hosted a dinner for participants, while still findingthe time to present his thoughts in two of the four sessions. Inaddition, Francis Yeoh Sock Ping, represented by his brother Yeoh SeokKian of the YTL Corporation Berhad, graciously hosted our closingdinner.

Following the conference, Carla A. Hills, Tommy T.B. Koh,Jack Murofushi, Nicholas Platt, Mirzan Mahathir, and Michael Yeohundertook a number of efforts to ensure that the conference discussionreached a broader audience. First, they all took part in a pressbriefing immediately following discussions on the final day. Second,both Tommy Koh and Jack Murofushi published op-ed pieces, Tommy in theInternational Herald Tribune and Jack in the Japan Times. Finally, NickPlatt met with members of the Asia Society New York President's Circleto brief them on the conference. This report is intended to extend thereach of the Williamsburg discussions still further.

Special thanks go to the entire staff of the Asian Strategyand Leadership Institute, led by Kenanga Simon and Jean Wong, for allof their excellent work. From the Asia Society, Hee Chung Kim, theheart and soul of Williamsburg, managed all the details with unwaveringgrace and skill. Elizabeth Lancaster, making her inaugural trip to theWilliamsburg Conference, provided invaluable calm amidst theever-changing conference details. Mike Kulma helped develop the agendaand lent a helping hand to the conference secretariat before donninghis cap as conference rapporteur. Deborah Field Washburn, former SeniorEditor at the Asia Society, deserves credit for her hard work inbringing this report to print, as does Lai Montesca for her work on itslayout.

A special mention goes out to Marshall M. Bouton, Presidentof the Chicago Council on Foreign Relations and former Executive VicePresident of the Asia Society. In previous years, Marshall served asthe force behind Williamsburg, as well as conference participant. Thisyear marked his first as strictly a participant. The other participantsat this year's conference expressed their appreciation for hisdedication and commitment to the Williamsburg Conference, to the AsiaSociety, and to building better relationships between Americans andpeoples of Asia. We should like to do the same here.

We and the coconvenors are most grateful to the conferencefunders, whose names are listed at the back of this report. Theirsupport made the Thirtieth Williamsburg Conference possible.

Nicholas Platt
President
Asia Society

Robert W. Radtke
Vice President, Policy and Business Programs
Asia Society

Keynote Speech
Prime Minister,
The Honorable Dato Seri
Dr. Mahathir Bin Mohamad

Thirtieth Williamsburg Conference
Sunway Lagoon Resort Hotel, Kuala Lumpur
April 11, 2002

Malaysia and Asia: Seeking a Balance Between Peace and Prosperity

I am honored to be here today to speak at this distinguished gatheringof American and Asian leaders from the business, government, and othersectors. I have been asked to speak on the subject "Malaysia and Asia:Seeking a Balance Between Peace and Prosperity."

The tourist people are fond of promoting Malaysia as beingtruly Asia. The reason is that in Malaysia you find the three majorraces of the Asian continent: the Malays, who are ethnically the sameas the Indonesians, the Filipinos, the Thais, the Myanmarese, theCambodians, and the Laotians; the peoples of Chinese origin; and thepeoples from the Indian subcontinent.

One can even say that Malaysia represents Asia. And of courseit has all the potential for instability that seems to plague asubstantial portion of Asia. But it has not been quite stable, despitethe incompatible mix of people who inhabit this country.

The incompatibility is due not just to ethnic origins but tothe fact that the different races profess very different religions,cultures, and languages. The Malays are Muslims, the Chinese Buddhistsor Taoists, and the Indians largely Hindus. The followers of thesereligions have never really gotten on together in other parts of theworld, but in Malaysia they live, work, and play together.

Another factor that is believed to threaten peace andstability in Malaysia is the fact that the majority Malays are Muslims,and they dominate the politics and the government of the country.Muslims are believed to be incapable of living at peace withnon-Muslims, of governing and developing their countries. But the 60percent Muslims in Malaysia have been able to get along with the 40percent non-Muslims, to work with them, to govern and develop thecountry together with them, and to maintain peace and comparativeharmony.

Malaysia is obviously very Asian. It finds it easier torelate to Asia than to other continents. But it is with East Asia thatMalaysia is more closely associated. About 20 years ago theinternational community was startled and shocked when Malaysia loudlyannounced that it would look east. Hitherto countries wishing todevelop had always looked west, looked at Europe or North America. ButMalaysia apparently believed that the eastern model was worthemulating. It was a time of vigorous growth for Japan and Korea andeven Taiwan. They were industrializing, that is, progressing toward theEuropean model. It would have been logical for Malaysia to just followthe European model, but Malaysia chose the indirect route, to developby following the path taken by East Asian countries.

Japan and Korea, which were devastated by war, had appliedcertain techniques in order to develop fast. Since they had clearlysucceeded, there must be something they did which was right.

There were other Asian models, of course. Some Asiancountries decided to be socialistic, to close their markets and theireconomies to foreign participation. But these countries had notachieved the kind of progress that Japan and Korea had achieved. SoMalaysia avoided socialism, although it was not averse to usingsocialist methods such as long-term planning and selected nationalenterprises that were expected to help the administrative anddevelopment process.

All the while, Malaysia had continued to watch the West andto use western methods where applicable. It was an altogether pragmaticapproach bereft of the constraints of ideologies, which we believe havebeen the downfall of many countries.

Perhaps Malaysia's greatest achievement is the management ofrace relations. Here I would like to say that racial harmony isachieved in Malaysia because of Islam and because the majority of thepeople here are Muslims. This statement is perhaps a little bit hard toswallow. Islam and the Muslims are commonly associated with aninability to get along with peoples of other religions or races or evenwith Muslim peoples of different sects. They are said to be irrational,recalcitrant, unable to govern and develop their countries, and lastbut not least, given to violence and terrorism. Can the Muslims ofMalaysia contribute to peace and harmony among peoples who are soracially and religiously incompatible?

The answer is that they can if they follow the fundamentalsof Islam, the true teaching of Islam. It was Islam as preached byProphet Mohammad which brought peace to the warring Arab tribes andmolded them into a single ummah, or community of followers, laterjoined by other races, who eventually built the great Muslimcivilization which lasted 1300 years, longer than the Romancivilization.

If today Islam and the Muslims seem incapable of living atpeace with others and achieving progress, it is not because of theteachings of Islam but because many have deviated from the teachingsand have made use of the devotion of the Muslims to their religion topromote their own agenda.

The situation among Muslims today (the 15th century of theHijrah) is not unlike that of Christendom in the 15th and 16thcenturies A.D. Christians then were very intolerant, carrying outpogroms against the Jews and inquisitions against suspecteddeviationists from accepted teachings. In Spain converts toChristianity from among the Jews and Muslims were often condemned forsecretly adhering to their previous religions and were tortured andburnt at the stake. Intolerance of each other on the part of Catholicsand Protestants resulted in the migration and eventual founding of theUnited States of America.

All these, the pogroms and the inquisitions, were notChristian. When people become too pious, there will be people who willabuse religious piety by bringing in their own politics to takeadvantage of the deep faith of the people, their gullibility.

The behavior of some Muslims of today, the 15th century ofthe Hijrah, differs little from that of the Christians of the 15thcentury A.D. Just as the behavior of the Christians was not due toChristian teachings, the behavior of these Muslims is not due toIslamic teachings, the true and fundamental teachings of Islam.

In Malaysia, the majority of the Malay Muslims try to adhereto the true fundamentals of Islam. Fundamentalism is not about beingextreme. The fundamental teachings of Islam emphasize the brotherhoodof all Muslims, the acceptance that in the human community there willbe those who reject Islam, who will worship in their own way, for whomthere will be their own religions that differ from Islam. Islam doesnot advocate enmity toward non-Muslims except when they attack Muslims.Even then if they sue for peace, Muslims must be willing to entertaintheir overtures.

The ignorant desert Arabs, upon embracing Islam, were ableto provide good governments and to develop their lands, frequentlyworking together or using the services of non-Muslims. In fact, Jewsfrequently worked as senior members of Muslim governments ofAl-Andalus, as the Arabs called Spain. Such was the tolerance ofMuslims for peoples of other faiths that many Jews elected to migrateto Muslim North Africa after the reconquest of Spain by the CatholicFerdinand and Isabella. Similarly in Eastern Europe, the Slavic peoplegladly cooperated with the invading Turkish Muslims.

The majority Malay/Muslims in Malaysia prefer to adhere tothe true and fundamental teachings of Islam, rather than past andpresent interpretations made by Muslims with political agendas. That iswhy we can claim that Islam is the reason for peace and harmony inMalaysia. Islam is also the reason for Malaysia's rapid development.

I have mentioned that Malaysia has looked to Asian countriesfor inspiration in its development. Asia is not homogeneous. Asia is avery big continent peopled by numerous ethnic groups. There is a greatdeal of difference between these ethnic groups, so much so that it isquite wrong to lump them together as Asians. They are divided not justby ethnicity but by culture, religion, and language. It is unrealisticto expect them to unite and do things together. They are most likely tobe at odds with each other, to be actually at war with each other.

By contrast, the Europeans are more homogeneous even if theyare Germanic, Latin, or Slavic people. Their cultures, including theirvalue systems and their languages, even have a common origin and arelinked to each other. For Europeans to be grouped together, to beunited and take common stands, is easy. With the coming into being ofthe European Union, for practical purposes the Europeans have becomeone people belonging to one nation. Not so the heterogeneous, deeplydivided Asians.

However, the Southeast Asians, consisting mainly of brownpeople, seem to set some store by their close proximity to each otherin the Southeast Peninsula of Asia. Initially, however, they were lessthan friendly toward each other. Upon their liberation from thecolonial yoke they confronted each other. But the need to resolve theirearly quarrels led to their forming an association comprising Malaysia,Indonesia, and the Philippines at first. The failure of Maphilindo didnot discourage them. Eventually their association evolved into ASEAN,the Association of Southeast Asian Nations. This expanded until all thecountries of Southeast Asia, ten in all, belong to the ASEAN group.

This is an association of largely weak countries with littleclout, helpless to influence the affairs of the region, much less theworld. They found themselves being forced to accept internationalpolicies formulated elsewhere, many of which are actually detrimentalto their interest.

About a decade ago Malaysia proposed a link-up with otherAsian countries, namely the vigorous economies of Northeast Asia. Itwas not an economic community or union like the European EconomicCommunity. It was merely going to be a consultative forum, to identifyand discuss common problems and to formulate common stands.

Although Europe was evolving into the European Union and thecountries of North America had already formed NAFTA, the North AmericaFree Trade Area, the East Asia countries, north and south, were told inno uncertain terms that they could not talk to each other except in thepresence of countries from outside the region.

Of course this condition was not spelled out in so manywords. But potential members from the Northeast were verbally informedthat they could not join the East Asian Economic Group (EAEG). Somemembers of the Southeast Asian Association were also influenced, andthey placed obstacles to prevent the formation of the EAEG. Evencalling it East Asia Economic Caucus (EAEC) did not help.

However when Australia proposed the Asia Pacific EconomicConference, the initial reluctance of the Southeast Asian Countries, inparticular Malaysia, to back the formation disappeared when thePresident of the United States called for a meeting of the Heads ofGovernment in Seattle. It was obviously going to be a historic event.And so APEC came into being and completely eclipsed the proposed EAEC.

Malaysia cannot understand the suspicions toward Asiancountries. When Asian countries can only talk to each other in thepresence of representatives from non-Asian groups with whom Asians haveto compete, particularly when the representative is powerful, it isobvious that open discussion would be impossible. Anything that isdiscussed which is not in the interest of the non-Asian groups would besubjected to opposition or would be watered down so as to be lessmeaningful.

But proposals for inclusion of members from competing groupsinside any Asian grouping continue to be made and to be pushed. IfEuropeans can be exclusive and so can Americans, why cannot Asians havetheir very own group? The objection that Asians are anti-West oranti-European cannot be valid as the Europeans and Americans neverconsider the non-admission of Asians into their groupings as beinganti-Asian.

Malaysia is not anti-West or anti-European. Almostimmediately after independence Malaysia opened up the country toEuropean investment. We never had any hang-ups about Europeans andtheir colonialist past. Even if there is nothing in common for Asiansto justify an all-Asian organization, it is wrong in principle toobject to their having their own organization when others have theirs.It smacks of double standards.

It is shameful that the countries of East Asia have to hidebehind other names, like ASEAN plus three, in order to get together. AsI said, Asians are heterogeneous and deeply divided. There is no waythey can conspire to confront the Europeans or the West. Asians knowthey need the rich countries of Europe and America in order to grow andprosper.

Asians want to be democratic, to be equal and to be fair. Butthey do not see good examples of these qualities among the democratswho preach to them. It is undemocratic to use force, including economicpressures, in order to gain acceptance of a system or policy. But forceis being used every time to gain Asian compliance. And many of thethings that Asians have to accept are actually detrimental to theirinterests. It is because of this that Asians are leery of the goodintentions expressed by the West over globalization. Their experiencein the past does not help to convince them.

Malaysia is a democratic county, not liberal like westerncountries, but democratic nevertheless. We have had ten generalelections in our 44 years of independence, elections in whichopposition parties not only won numerous parliamentary seats but wereable to form state governments in four Malaysian states. Today, two ofthe states are ruled by the opposition after free and fair elections.

We are not seeking a balance between peace and prosperity, asthe title of this talk I was asked to give seems to suggest. We believethat only peace can bring about prosperity. So ever since independence,we have tried and we have largely succeeded in creating harmony amongthe races that make up the people of Malaysia. We have largely beenable to maintain peace and stability in this multiracial country,despite our differences and the extreme disparities in our stages ofdevelopment.

Malaysia believes in human rights for all. We respect therights of individuals, but in the exercise of individual rights, therights of the majority must not be denied. We regard it as wrong forindividuals and minorities to exercise their rights in a disruptiveway. The exercise of human rights must be accompanied by responsibilitytoward the community, toward maintaining stability and peace. If anyoneshows a lack of responsibility, then he must forfeit his rights.

Malaysia does not apologize for our views, our attitudestoward a foreign value system that cares only for forms but not at allfor substance. We have seen too many ideologies invented in the Westfailing and being discarded after millions of lives have been lost andmuch wealth destroyed.

Peace is a prerequisite for prosperity. In the maintenance ofpeace sacrifices must be made. We are prepared to make the sacrificesbecause we do not believe in being beholden to ideology to the point ofdestroying ourselves.

Malaysia picks and chooses with pragmatism. That is why weaccept national planning for the future. Apart from 5-year plans wehave a 30-year plan to become a developed country by 2020. That isbecause we have already demonstrated that our plans are not onlyimplementable, but also have been implemented. Since independence 44years ago, we have been implementing a series of 5-year plans within anumber of longer term outline perspective plans. I believe we haveacquired quite good experience in planning and implementing. So, wefeel we can achieve our ambitious 2020 vision.

Of course, unexpected crises can derail our planned progress.The attack on our currency and the events of 11 September are examplesof these. But we have also acquired some skills at crisis management.Our methods may be unconventional but we have been able to stabilizeour multiracial country and our economy as well. Our unorthodox way ofdealing with the currency crisis is not unusual for us.

If today Malaysia appears to be against globalization, it isnot due to recalcitrance or just wanting to be difficult. We do believewe know the problems resulting from the current interpretation ofglobalization, and we think we have some ideas about how to makeglobalization less damaging to the poor countries while stillbenefiting the rich countries. All we say is that we should not rushinto borderlessness, deregulations, and free capital flows withoutexamining the many consequences of these vigorously promoted conceptsof the rich and the famous.

It does not take a clever observer to note that the worldtoday is richer than ever before and that most of the wealth isconcentrated in Europe and America and some in Japan. The rest of theworld, and that includes a huge chunk of Asia, is very, very poor.There is no equity in the distribution of wealth.

Yet while force is being used to ensure human rights areupheld, very, very little is done to help reduce poverty, which weshould note accompanies most social ills including human rights abuses.It is not unreasonable to assume that the reduction of poverty wouldcontribute toward reducing human rights abuses, for example.

In the immediate post World War II years, a commitment wasmade by the developed countries to give 0.7 percent of their GDP as aidto the poor countries. True, much of the money was misused, but thatdoes not excuse the almost total stoppage of aid. If the recipientcountries are unable to handle cash aid, other forms of aid can begiven.

At one time the United States was the most popular country inthe world because of the Peace Corps. Now there is no Peace Corps andno aid except when tied to the fulfillment of the policies of thedonor. And the slightest breach of the tenets of the donors wouldresult in painful sanctions and other punitive measures, which allcontribute to more impoverishment. America has become ugly, andAmerican embassies everywhere must be built behind high walls.

In the pursuit of ideological concepts, the original reasonsand intentions of the ideology are always forgotten. Thus socialism andcommunism were intended to create an absolutely equitable society -socially, economically, and politically. But these ideologies wereforced upon society through the deprivation of the rights of mostmembers of society, through expropriation by dictatorial governmentsthat never hesitated to incarcerate, torture, and kill in order toensure that alternative ideologies were destroyed. The egalitariansociety that socialism and communism were supposed to create wasforgotten in the interest of upholding the ideologies at all cost.

Now we are seeing the same thing happening with liberaldemocracy and human rights. Be democratic and uphold human rights orelse you will lose your rights. Is it democratic to go about promotingdemocracy this way? It would seem that democracy is more important thanhuman rights and the well-being of the people. This does not seemdemocratic.

Malaysia is an Asian country. We do not reject all westernvalues, but where we think Asian values are better we should be allowedto retain our values, if the proponents of democracy believe indemocracy and human rights.

Malaysia wants peace and prosperity, and our people freelysupport our way of achieving these. Why should there be objections byothers who are not really affected by our ways?

Asia and Malaysia have a right to do things our own way aslong as the majority of our people approve of our way. We will followwhat is good from Europe and America, but we must have the freedom todecide what we should copy. Those who believe in freedom, in humanrights, and in democracy must allow us to manage the balance betweenpeace and prosperity that we have achieved on our own.

Prime Minister's Office
PUTRAJAYA 

Session 1 - The War on Terrorism: Impact on Peace and Stability in Asia

Meeting seven months after the terrorist attacks in New York andWashington, D.C., and six months after the beginning of the war onterrorism, Williamsburg Conference participants assessed the meaning ofterrorism, its root causes, and possible cures for those causes; howwell countries in the region and the world have worked together in thewar on terrorism and the reasons for concern about achieving suchcooperation; and the implications of the war on terrorism for Asia's"hotspots." The session concluded with participants still grapplingwith what comes next.

Terrorism: The Search for a Definition, Causes, and Cures

Conference participants could not agree on an overarchingdefinition of terrorism, but made a number of suggestions to try andcapture its meaning. Terrorism was variously described as:

  • The deliberate killing of civilians;
  • A non-military threat; and
  • Actions undertaken by any extremists, not just Islamic ones.

Some participants quickly noted that terrorism went waybeyond the September 11 events in the United States. In this vein, theysuggested that terrorism had existed in many forms throughout Asia andthe world for many years. While most agreed with the need to lookbroadly at the issue of terrorism, many of these adherents alsobelieved that terrorism changed with the events of September 11,achieving a global reach and transnational character.

Participants felt that it was not enough to define terrorismor talk about how well countries worked together in the present war onterrorism. The discussion needed to go further, to search for the rootcauses of terrorism and then for the means to wipe it out at itssource. Conference attendees suggested many and varied root causes,including: disparities in wealth and social standing; a lack of goodgovernance; a perceived lack of options; poverty, illiteracy, andinequality; and a lack of education. As a possible counterpoint, oneparticipant mentioned that intellectuals often led radical terroristgroups.

The suggested ways to eliminate terrorism, whatever itsdefinition, revolved around education and democratic governance. Mostthought that education, broadly defined, would serve a fundamental rolein addressing the root causes of terrorism. More specifically, awell-rounded and international education would make for increasedunderstanding and appreciation of different ways of life and differentways of thinking-the basis for a tolerant worldview. In addition,attendees believed that children needed to be provided with specializedskills to deal with conflict and conflict resolution, such as peaceeducation. While education might provide the basis for developing goodglobal citizens, conference participants also called for democraticsystems of governance with functioning institutions, in societies wherepeople could share their grievances and ideas.

Working Together in the War on Terrorism

While still grappling with the definition and causes ofterrorism and the solutions to it, participants moved on to analyze howcountries in the region were cooperating in the war on terrorism. Mostof this discussion focused on how well countries in Asia were workingwith the United States in this war, as opposed to how well they wereworking with each other. Participants said many positive things aboutthe way in which relations with the United States have progressed.However, some saw the potential for divisiveness, depending on thefuture path of U.S. policy.

On the positive side, the United States and Asian nationshave worked well together in the first stages of the war on terror.This cooperation was acknowledged not only by traditional allies of theUnited States, but also by those with whom relations are on less steadyground. For example, Japan has made both financial and strategiccontributions. Strategically, it has sent ships to help support U.S.efforts in Afghanistan, and financially, it has been stalwart inplanning for the reconstruction of Afghanistan. In addition to theefforts of allies, countries such as China, Malaysia, and Indonesia, toname a few, have condemned the events of September 11 and pledged theirsupport for efforts to root out terrorism, each in its own way. Thereaction to 9/11, in fact, resulted in an overall improvement inrelations between the United States and the nations of Asia.

Participants identified two other areas for optimism. First,they saw Asian countries working more intensely among themselves toaddress the issue of terrorism. The Shanghai Cooperation Organization,including China, Russia, and the countries of Central Asia, is animportant case in point. Second, many believed that cooperation in thewar on terrorism creates the opportunity for countries to work togetheron other multilateral issues. Areas for possible future transnationalcooperation include narcotics, AIDS, and international crime. Regionalorganizations like APEC need to do more to provide focus in combatingthese shared problems.

On the other side of the coin, in addition to a sense ofglobal anxiety that did not exist before 9/11, conference participantsexpressed a growing concern about a perceived U.S. unilateralism inforeign policy, as exemplified by the abrogation of the Anti-BallisticMissile (ABM) treaty and the U.S. withdrawal from the Kyoto Protocol.President George W. Bush's State of the Union reference to the "Axis ofEvil" only added to these worries.

President Bush's comment caused more than normal concern asthe events of 9/11 polarized Muslim communities throughout Asia,sparking grass-roots debates between moderates advocating cooperationagainst terrorism and militants who want nothing to do with thenon-Muslim world. This division has become a factor in the domesticpolitics of Asian nations with large Muslim populations, complicatingthe acceptance of advice and assistance from the United States.Furthermore, U.S. policy in the Middle East-particularly a perceptionof bias in favor of Israel-has led to a surge in registration formilitant groups in Southeast Asia, making it harder for Asiangovernments to deal with their own peoples as they continue to sidewith the United States. Participants from Asian countries with largeMuslim populations stressed that the conflict in the Middle East cannotbe overestimated as an influence on moderate Muslim opinion in Asia.Asian Muslims identify with the Palestinians on a number of differentlevels, first and foremost as a people with whom they share a religion.In addition, for those Asian Muslims who experienced colonialism at thehands of various Western powers there exists compassion andunderstanding for the plight of the Palestinians, perceived as undersiege by Israel. These feelings of association, coupled with theperception that U.S. domestic policies single out Muslim men forquestioning and detention, have helped to create the impression in Asiathat the war on terrorism is really a war on Islam. This is apotentially volatile mix.

Still others voiced concerns that the United States seemed tobe concentrating less on democratic values and more on doing whateverit takes to achieve its strategic objectives. For example, attendeesexpressed some hesitation over the strategic relationships the U.S. hasforged with non-democratic Pakistan and virtual dictatorships such asUzbekistan and Turkmenistan. Along these lines of both espousing andactively promoting democratic values, some local participants expressedconcern that Asian governments might be using the war on terrorism as apretext for cracking down on long-term opponents. They gave no specificexamples.

Implications for Asia's Hotspots

The discussion of the implications of the war on terrorism forAsia's "hotspots" was limited, focusing almost exclusively on theKorean Peninsula. Participants believed that 9/11 did not greatlyaffect the situation on the Korean Peninsula until President Bushinvoked the "Axis of Evil" in his State of the Union address. Thiscomment created tension between the two Koreas and in North Korea'srelations with other countries. This tension has eased somewhat withthe recent resumption of talks between North and South Korea, butparticipants emphasized the need to get North Korea involved in theregion, specifically in the ASEAN Regional Forum (ARF).

The issue of China-Taiwan relations also came up in thiscontext, with the suggestion that the war on terrorism had no directimpact on them.

New Questions Raised

In addition to those questions raised in the agenda, and partly inresponse to the suggestion that participants think "outside the box,"many new questions arose during discussions. Among them:

  • Is the current war really a war on terrorism?
  • Is the U.S.- led war too narrowly defined? How should we fight against terrorism, more broadly defined?
  • With so many terrorist organizations, is a war on terrorism possible? Do we have the means and wherewithal to fight such an unconventional war?
  • Are there alternative viewpoints in Asia as to how Asian countries might address terrorism that are not completely subsumed under America's war on terror?
What Next?

The overwhelming majority of conference participants agreedthat whatever the next step in the war on terrorism, the United Statesshould not go it alone. The next move requires a coordinatedinternational response. The U.S. must seize this opportunity to workwith a united international community while it still has the countriesof Asia firmly behind it.

Furthermore, there were strong recommendations that theUnited States remain engaged in Central Asia and the Northern IndianOcean in order to: stabilize the situations in Afghanistan andPakistan; serve the U.S. interests of non-proliferation in the region;help stem the tide of refugees from one country to another; stabilizeIndia-Pakistan relations; and help control transnational crime and thetransit of illegal goods throughout the region. Attendees felt stronglythat, while remaining engaged and continuing its efforts in the war onterrorism, the U.S. must consider the complexities of individual Asiancountries in assessing their cooperation in this war. Asianparticipants stressed that the governments and peoples of Asiaoverwhelmingly side with efforts to combat terrorism. The United Statesmust appreciate these feelings and realize that domestic considerationsmay allow some countries to be more actively engaged in their support,while others might be equally supportive, but through less aggressivemeans.

Panelists believed that the countries of Asia, individuallyand as a group, need to find ways to work together better. For Muslimcountries in the region, some suggested a need for democratization,adjusted to local circumstances, and the promotion of an enlightenedIslam. Together, participants suggested, Asian nations and the UnitedStates can work for a more peaceful and cooperative future. Together,they need to address the political, economic, and social issues thatcause terrorism. If they fail to do so, many feared that the U.S. andits partners might win the battle, only to lose the war. Some peoplespoke of a "Marshall Plan" for Central Asia or to help address thedisparities between North and South, while others advocated a markedincrease in people-to-people contacts through mechanisms andinstitutions such as Fulbright scholarships, the Ford Foundation, AsiaSociety, and Asia Foundation. Still others suggested that countries inthe region need to encourage the rule of law and good governance inMuslim countries. Finally, participants called upon the U.S. and Asiannations to stress that the enemy in this war is not Islam, but ratherterrorism. To prove this point, some mentioned that rising radicalismin the name of religion is not unique to Islam.

 

Session 2 - The Economic Downturn: Prospects for Regional Economic Relations

This panel was devoted equally to discussions of Japan, China, andSouth and Southeast Asia, in the context of prospects for regionaleconomies and relations between these economies.

Japan

There were three overarching categories of thought in thediscussion of the Japanese economy. Some participants were short-termpessimists and long-term optimists. This group saw crisis in the shortrun, but believed that Japan was on the right path for the future.Others professed short-term optimism and long-term pessimism. Thisgroup saw Japanese banks doing better and business confidence on therise, but also saw government debts, non-performing loans, and demandshortage problems as causes for grave future concern. Still others wereoptimistic no matter the time frame. This group saw hope in the slowbut steady growth in institutional change over time, the increase inJapanese free trade agreements with other countries (recently withSingapore and the Association of Southeast Asian Nations [ASEAN]), andsigns of growth and change below the national level.

While attendees actively debated which mode of thought bestfits the Japanese experience, they agreed that Japanese companies havebeen undertaking efforts to help themselves and the economy grow.Companies have been eliminating sectionalism, creating a moreconcentrated and focused management strategy, and attempting to createa new mindset (toward individuality and creativity) among employees.

In addition to specific thoughts on the state and directionof the Japanese economy, and with the conference held in the heart ofSoutheast Asia, participants exhibited a marked concern over Japan'sinvolvement in Southeast and East Asia. Some showed interest in Japan'sview on investment in Indonesia, while others looked for a morecoherent Asia strategy from Japan. In response a number of theparticipants from Japan, pointing out that Prime Minister JunichiroKoizumi had recently addressed both of these issues, expressed Japan'scommitment to work more closely with ASEAN and acknowledged thatJapanese Overseas Development Assistance went largely to China andIndonesia, with healthy portions going to other ASEAN nations as well.Finally, still others hoped that recent agreements between Japan andSingapore could be adapted and implemented by other countries in theregion as a way to spur investment and growth and possibly to create aregionwide free trade area.

Greater China

The discussion of Greater China was predominantly about twomembers of that entity. First, participants laid out the causes andconsequences of the recent economic difficulties in Hong Kong. Second,they thoroughly debated the nature of economic relations between Chinaand its neighbors, both now and in the years to come.

Regarding the causes of the current economic problems inHong Kong, participants focused on three different areas. First, theysaw an incomplete recovery from 1997. At least partly due to theexistence of negative equity for many of those touched by the burstingof the real estate bubble, there was less borrowing by small andmedium- sized enterprises (SMEs). In addition, and for reasons notfully made clear, the government continued to delay much-needed taxreforms. Second, participants pointed to structural change due toglobalization as a second reason for Hong Kong's current economic woes.The opening of mainland China pulled many jobs and billions of dollarsof foreign direct investment (FDI) into China. As a result, Hong Konglost manufacturing jobs, then service sector jobs, and now retail andlow-end professional jobs. Finally, the continued underperformance ofthe Japanese and U.S. economies dragged on Hong Kong's growth, as onthe growth of other countries in the region.

What were the consequences for Hong Kong's economy? First,Hong Kong is in a deflationary period, which may go on for some time.Second, there has been steadily rising unemployment and the underuse ofcapital. The problem of unemployment in particular gave rise toconcerns over how to employ workers, perhaps in new fields. Third, HongKong has recently experienced severe government fiscal problems. Forexample, this year alone the budget deficit will approach 2 to 3percent of GDP. Some suggested that these fiscal woes were the directresult of the taxation issues mentioned earlier, as it has beenpolitically difficult for Hong Kong to implement new taxes. Finally,the economic downturn has resulted in increased social ills. Thesesocial issues include cross-border problems such as crime and growingdisparities in income distribution. In the end, no one asserted thatHong Kong was either making its way out of the malaise or diggingitself further in.

Regarding China's role and impact on the region, participantswere of two minds. Some saw China as the 10,000-pound gorilla on theback of other Asian economies. Generally speaking, these individualsexpressed a number of different concerns. For example, some panelistsbelieved that recent Chinese purchases of Indonesian natural resourcecompanies represented an effort by China simply to export these goodsback home to feed the ever-growing domestic engine. Harking back tosimilar arguments made about the United States toward Latin America bythe dependency theorists, these panelists saw China as attempting totake everything out without necessarily providing anything to the localeconomy. Others voiced concerns that China sucked up all of theinvestment dollars that might otherwise go to Southeast Asia. Thisconcentration of FDI in China puzzled these participants, as returns onFDI are traditionally higher in Southeast Asia than in China.Nonetheless, a few conference goers went so far as to suggest thatSoutheast Asia could not hope to compete with China for investmentdollars.

Others dismissed the notion of China as a threat or giantgorilla. This group generally held that even with a strong and growingChinese economy there existed the opportunity for situations in whichall sides would win, instead of the zero-sum possibilities mentionedabove. For example, a growing China offers more opportunities forcompanies in the region to forge strategic partnerships andcollaborative relationships. Also, the fact that Chinese companies holda comparative advantage in certain areas does not mean that companiesfrom other countries cannot either find areas where they holdcomparative advantage or innovate to compete with the Chinese. Insupport of the former point, participants suggested that China cannotpossibly dominate every market, so there exist many opportunities forSoutheast Asian countries to grow in niche markets or even mainstreamfinancial markets, given their comparative advantage in understandingthese areas. In support of innovation, Japanese companies have foughtback in certain areas and regained market share. Finally, attendeespointed out that the United States and Japan have traditionallyinvested more FDI in Southeast Asian nations (combined) than in China.They expected this pattern to continue.

Southeast and South Asia

Participants believed that we were seeing an economic recovery inSoutheast Asia, but that the depth of this recovery remained far fromclear. However, some stated that Southeast Asia had disappeared fromthe mental map of U.S. business people over the last few years. Whilethe depth of recovery remained unclear and participants debated theregion's "disappearance," it was obvious that the attendees believedthat countries in the region should focus on the bigger picture of howto promote sustained growth and investment. For growth and investmentcountries need political stability, personal safety, orderliness andpeace, and consistency of policy. Most also agreed that countriesshould devote more time and effort to better corporate governance. Thisproblem with corporate governance marked a continued hindrance to theattraction of FDI, as foreign businesses still see investing inSoutheast Asia as risky.

Who is to blame for these economic woes? Most participantsfrom Southeast Asian nations believed that they needed to start athome, rather than blame the outside world and the forces ofglobalization. Take for example Indonesia, where the economic reformsof the 1980s were not accompanied by political reforms. This at leastpartially led to both the political and the economic problems found inIndonesia today. Interestingly, on the issue of how human rights mightbe protected during the push for rapid economic development, oneparticipant bluntly said that democracy and human rights were notrelevant to business investors; instead, growth attracts investment.

Those who spoke on the economic prospects for South Asiancountries focused exclusively on Pakistan and India and on the manyreasons for hope and the few causes for concern. In Pakistan, theseconference-goers suggested, the economy is on the mend. For example,Pakistan now holds over $5.5 billion in reserves, which while minisculeto some countries is a boon to Pakistan. Furthermore, in light of thewar on terrorism and Pakistan's contributions, lenders rescheduled itsdebt, thus easing the economic burden on an already beleaguered people.In addition, with internal institutional changes implemented andrecently ratified agreements with the Internal Monetary Fund in place,the government should now be in a better position to provide for thepeople during these troubled times. However, not everything appeared sorosy. Without providing full details, attendees stated their beliefthat lower exports, higher insurance rates, drought conditions, and alack of dynamism and job creation at the grass-roots level wereindications of vexing problems facing Pakistan's economy.

Participants briefly discussed India. On the positive side,India experienced 5 percent growth per year during the 1990s. On thenegative side, the Indian government appeared to be slowing reform andprivatization, while failing to address fiscal deficits.

Other Economic Matters

Although not discussed at great length, a number of other economic matters arose. These included:

  • Concerns over Japan's aging and shrinking population and the need to bring more women into the workforce;
  • The issue of migrant workers and the possibility of improving relations between countries by adequately addressing the needs of a foreign workforce; and
  • Hopes for the future of regional economic cooperation through regional organiza- tions or agreements, for example: ASEAN+3; Japan's recently organized meeting with its Northeast Asian neighbors; and the ASEAN Free Trade Agreement (AFTA) and other regional Free Trade Agreements (FTAs).
Session 3 - Malaysia and Southeast Asia

While Southeast Asia and regional organizations such as ASEAN aretopics of discussion at all Williamsburg Conferences, this year'sparticipants, sitting in the heart of Southeast Asia, took thediscussion deeper than in past years. Panelists focusedcountry-specific comments on Malaysia, the conference host country, andIndonesia, the largest country in the region. Regionally, there was afull discussion of ASEAN and related issues. This session includedcontinued discussion of the war on terrorism in relation to SoutheastAsia. Finally, participants broached the subject of what lies ahead forcountries in the region.

Malaysia

The discussion on Malaysia focused on the politics of thecountry and the impact of September 11 and the war on terrorism.According to participants, Prime Minister Mahathir Bin Mohamadcurrently holds a position of unprecedented power, with little to noopposition on the horizon. This has allowed him to move forward withhis domestic and international agendas, both of which seem to beworking quite well at present. Attendees voiced concern that there wasno equal to the prime minister within view who might take over once hedecides to step down. This worried some participants because of Dr.Mahathir's advancing age. Some were apprehensive that the next leaderof Malaysia might not be up to the task of moving the country along thecontinued path of growth, keeping all ethnic and religious groupsliving together in harmony in a secular society, and providing a strongvoice for Malaysia in the international arena.

While the prime minister's position seems unassailable,important to his hold on power has been the Chinese vote in Malaysianpolitics. Since the opposition party, Parti Islam Semalaysia (PAS),cannot win elections in an area with less than an 80 percent Malaymajority, Chinese voters have an important say in 42 percent of theprovinces in Malaysia. As a result, keeping this segment of thepopulation happy and engaged is of the utmost importance to PrimeMinister Mahathir's ability to maintain his grip on power. In fact, theMalaysian government is currently worried that some Chinese might bethinking of moving abroad, as they fear that any future leader might beunable to stem the rise of radical Islam in Malaysia.

Speaking of the rise of Islam in Malaysia, particularly thesegments of the Islamic movement that would like to turn Malaysia intoan Islamic state, participants suggested that the events of September11 and the subsequent war on terrorism have derailed PAS's efforts tomainstream its message. This setback was mainly due to PAS's call foran anti-American jihad following the events of September 11, an impulsenot shared by the overwhelming majority of the Malaysian population.The prime minister, whose response has been more tempered and moderate,has gained the moral high ground. This has further emboldened Dr.Mahathir, who was already cracking down on terrorists prior toSeptember 11.

Indonesia

Indonesia is still reeling from and dealing with the aftermathof the 1997 financial crisis and the transition from authoritarian ruleto democracy. Participants suggested that two lessons could be learnedfrom the Indonesian economic crisis, which are not specific toIndonesia alone but might also provide guidance to other developingcountries. First, economic development cannot proceed in purely linearfashion. Prudence and long-term policy-making are required. Second,political development and economic development need to go hand in hand.The legacy of the lack of political development during the Suhartoyears has been twofold. First, Indonesia experienced widespreadcorruption, which has become endemic to society. Second, during theseyears no preparation was made to groom a successor generation, with theresult that leaders since the fall of the Suharto regime have been weakor ill prepared. In addition to these fundamental problems,participants mentioned many other causes for more immediate concern:high budget deficits; enormous loan debts; no hope for greater taxrevenues; weak rule of law; human rights abuses; the necessity for theIndonesian economy to grow 6 percent annually to absorb new jobseekers; and the need for orderly decentralization of power from thecentral to the local governments.

But some attendees expressed optimism about Indonesia'sfuture. Politically, regional conflicts within Indonesia have subsided.Economically, the government recently reported that the economy isgrowing at about 3.8 percent, while the Indonesian rupiah hasstrengthened and stabilized. On the social front, despite the relativelack of economic progress of the last five years, Indonesians havegained access to better levels of education than they had ten yearsbefore, and non-governmental organization are vibrant and thriving.

The issue of Indonesia and the war on terrorism came upbriefly during this session, with participants noting that the UnitedStates must improve its understanding of the domestic politics of thislarge and diverse country. This being the case, participants perceiveda need for the U.S. to use more than one model of cooperation withcountries in the war on terrorism. This issue was covered in greaterdepth in Session I.

ASEAN

With so many participants from Southeast Asia, the future ofASEAN was a lively topic of discussion. The commentary generally fellinto one of two categories, criticism or positive assessment.Interestingly, the overwhelming majority of those who spoke negativelyabout ASEAN, or who saw a great need for change, were fromASEAN countries. In contrast, attendees from countries outside of ASEANreminded all how far ASEAN had come and expressed their optimism aboutits future.

Before discussing the needs of ASEAN, participants looked tolessons from the past. These lessons were threefold: first, that growthwithout stability had proved detrimental to the health of ASEANeconomies; second, that overreliance on foreign capital had createdoverwhelming risk, which led to underwhelming performance and financialcrisis; finally, that unbalanced growth had created undesirable socialproblems such as poverty, crime, and corruption, to name but a few.

Panelist suggestions for steps that ASEAN needed to take weremany and varied, involving both individual and group actions.Participants did not necessarily agree on all of these ideas. Theyincluded the need to:
  • Press ahead with internal reform;
  • Move faster in integrating their economies, e.g., liberalizing trade in services and concluding FTAs with other countries, such as China and Japan;
  • Manage the abundant natural resources of the region in a more sustainable way; and
  • Reduce poverty, raise the levels of public health, and the like.

In addition to the above points, there were numeroussuggestions from participants from ASEAN member countries to the effectthat the ASEAN Secretariat needed to be strengthened. Some suggestedthat in order to do this, countries must first put their own houses inorder, while others pointed to the need to provide Secretariat workerswith salaries commensurate with their work, as they are now vastlyunderpaid. Such strengthening of the Secretariat would mark a majormove toward a more fully functioning international organization.

A minority of participants believed that because of all ofthe underlying problems and needs mentioned, ASEAN would experienceanother crisis in the next few years.

Discussion of ASEAN also had a lighter and more positivetone, mainly set by those from outside of ASEAN, who reminded the grouphow far ASEAN had progressed over the last 35 years. Generallyspeaking, participants were encouraged, because when ASEAN came intobeing in 1967, the developed countries took no notice of it. Since thattime ASEAN has grown step-by-step, facing many challenges and survivingthem all. It has few parallels in the world today. ASEAN was describedas cohesive, moderate, and forward looking. In testament to theassociation's importance, all people and countries in the region livein relative peace, despite major religious and racial divides. Also, atthe last summit there were more than 50 different proposals on howASEAN should proceed or what changes needed to be made. Participantsoffered this as a sign of ASEAN's commitment to improving coordinationand cooperation. On the economic front, attendees mentioned a number ofdifferent positive assessments. First, while there was overcapacitygoing into 1997, this has diminished. Second, AFTA is on or ahead ofschedule, with the year 2002 set for its completion. Finally, ASEAN isworking with other countries to improve conditions for membercountries: for example, it is working with the United States tostrengthen relations, as the recent tour in Southeast Asia of U.S.Trade Representative Robert Zoellick suggests. It has been helpful inplanning the WTO Ministerial Conference in Doha and the new round oftrade negotiations. It works as an equal partner with Japan. And it isworking with South Asian nations, which view ASEAN as very successfuland worthy of emulation.

Southeast Asia, 9/11, and the War on Terrorism

Participants, particularly those from Southeast Asia, believed that theevents of September 11 and the war on terrorism had raised the profileof Southeast Asia and its relevance to U.S. foreign policy. SoutheastAsia is back on the radar screen. The question now is whether the lightis green or red. The challenge for Muslim countries in the region orcountries with large Muslim populations is to develop democraticframeworks. To do this, attendees suggested that civil society mustplay an important role, with women's groups at the forefront. Countriesalso need good governance to protect against radicalism. If thegovernments of Southeast Asian nations could win the struggle for thesoul of Islam, this would be their biggest contribution to the war onterrorism.

The Challenges Ahead

In addition to all the needs already mentioned, participants suggesteda number of other challenges facing the countries of Southeast Asia inthe years to come. Countries in the region would continue to feel thepinch from the economic doldrums of Japan, a former source for growth,and from the disproportionate share of foreign direct investment stillgoing to China. Regarding leadership and leadership transitions,participants perceived a need to recruit young people, many of whombelieve that working in the government is not important. Countries needto restore prestige to such employment through better public relations,increased wages, and the identification of positive role models.Finally, participants reminded each other of the past, present, andfuture needs of East Timor and the reality that Southeast Asia wouldsoon have a newly independent state in the region. As a result, allneed to work together to make this transition as smooth as possible.

Session 4 - Role of the United States in the Region

Most participants believed that the events of September 11marked the start of a new era in international relations. While it isstill too early to draw definitive conclusions about the overall impactof these events and the war on terrorism, attendees already sawpositive changes in U.S. relations with many Asian nations, includingRussia, China, Pakistan, and India.

U.S. Policy in the Region: Major Tenets

Some suggested that prior to September 11, the United Stateswas very close to presenting a cohesive Asia policy. In fact, PresidentBush canceled two policy speeches scheduled for just after September11. The administration now plans to deliver a policy speech in June2002 to the Asia Society. [On June 10 Secretary of State Colin Powelldelivered this speech in New York.]

Since September 11, the United States has sought to build onand solidify its alliances and relationships in the region with Japan,Thailand, Korea, the Philippines, and China. Recognizing the importanceof China in the region, the U.S. is seeking to build a relationshipthat is cooperative, constructive, and candid. In addition, the UnitedStates is working with interested parties to improve India-Pakistanrelations, the situation on the Korean Peninsula, and cross-straitrelations.

Significantly, the president met with 20 Asian leaders at theAPEC meeting in Shanghai, and as of April 13 he had held more meetingsin Washington with visiting senior leaders than any president inhistory.

With respect to the war on terrorism, participants suggestedthat the United States greatly appreciated the positive response fromAsian nations in this effort. With regard to concerns over thepresident's "Axis of Evil" comment, some believed that we must put thisin the context of an overall policy and not simply look at it inisolation. In addition, the U.S. has worked bilaterally andmultilaterally with the leaders of Asian countries, trying to make itspolicies country-specific in order to respond more effectively to theneeds of different countries with different domestic constituencies.This was a concern expressly mentioned in two of the preceding threepanels. Finally, in a brief discussion of missile defense, participantsmentioned many of the standard pros and cons. Those against missiledefense warned of the possibility of an arms race and the potential forinstability in the international system as a result. Those in favorsuggested that the world did not come unglued when the U.S. said itwould abrogate the ABM treaty. In addition, proponents of nationalmissile defense believed that talks with the Russia and China, the twocountries most affected by a U.S. pullout, were going well. They arguedthat the U.S. wanted to complicate the picture for those thinking ofattacking, and that developing a missile defense would do just that.

The Region's View of U.S. Policy

Most believed that a U.S. presence in the region remains vitalfor peace and stability in the region. With that said, they suggestedthat to keep the United States optimally engaged, countries in theregions should maintain and expand dialogue with each other and theU.S. That requires including the U.S. in regional organizations. Whilethere was concern expressed about the U.S. and missile defense,countries in the region hoped that the U.S. would at least engage inserious consultation as it moves forward.

Statesmanship-wisely balancing its own needs with the needsof Asia-was seen as the principal challenge for U.S. diplomacy. Tosuccessfully accomplish this, the U.S. needs to distinguish betweenthings that generate rapid change (e.g., Asian financial crisis and9/11) and things that take time to change (e.g., some perceptions ofthe U.S.) and adjust its policy accordingly. Along the lines of seekinga peaceful balance of needs, some participants expressed concern overthe possible impact of U.S. "soft power" on indigenous cultures.

Participants had much to say about perceptions of U.S.policy in the post-9/11 world. Some believed that the world had changeddramatically as a result of 9/11. Others expressed Asian pragmatism andan Asian sense of history, stating that not everything had changed.Some expressed concern over possible U.S. unilateralism, along withworry that the war on terrorism may be a moral crusade based on revengeor a crusade against religious extremism. Still others reiterated theirconcern regarding the impact of U.S. Middle East policy on Muslimcountries in the region. Some delegates pointed to a dichotomy betweenU.S. democracy and human rights at home and the lack of support forsuch values abroad as the United States conducts the war on terrorism.Several delegates expressed the view that President Bush's "Axis ofEvil" comment was detrimental to ongoing efforts toward reconciliationon the Korean Peninsula. Several voiced the hope, expressed in previoussessions, that the U.S. would more carefully tailor its policies todifferent countries as it proceeds with the war on terrorism,recognizing that each country in the region has its own particulardomestic political situation.

Furthermore, some delegates suggested that Asian nationsthemselves should look for creative ways to address the concerns raisedby the war on terrorism, rather than simply defer to the United States.Others suggested that regional attempts were bound to fail if the U.S.was not included.


U.S. Domestic Politics, Mid-Term Elections, and the Impact on U.S. Foreign Policy

U.S. domestic politics affects U.S. foreign policy. The two majorpolitical parties have never been more evenly balanced. The 2000presidential election was the closest in history, and the narrowmargins in Congress (a 6-vote Republican plurality in the House and atie in the Senate) have set a record. All of this reflects a nationvery closely divided politically. This means that the potential forchange in policy is a matter of a few votes here or there in Congressor a few percentage points in public opinion.

Two major events have changed the U.S. political landscapesince the last Williamsburg Conference and demonstrated the fragilityof one party's hold on policy. Last year, Republican Senator JimJeffords of Vermont became an Independent, thus giving control of theSenate's agenda to the Democrats. This forced the president to selecthis priorities more carefully than he might when Republicans controlledboth the House and the Senate. Second, the September 11 attacksoccurred. Some participants suggested that prior to 9/11 the presidenthad searched for greater cohesion in his foreign policy and waited forSenate confirmation of his appointees (few with Asia experience wereconfirmed in the early days of his administration). After 9/11,participants saw a president transformed as a result of his clear anddecisive response to the tragedy. For several months the partisanissues that had existed before 9/11 disappeared, and many hoped for anew and prolonged bipartisanship. The president's approval ratingsoared, and it remains very high. Since 9/11 the administration has hada much more international focus than previously, although domesticissues have recently begun to move back onto the political agenda.

In November of this year, the U.S. holds its mid-termelections. A sharp ideological divide exists in the body politic, andRepublicans and Democrats remain far apart on both foreign and domesticpolicy issues. As a result, a change in party control in the House orSenate could result in a meaningful shift in policy-creating a tensionfor the president, who needs to be seen as above the fray of domesticpolitics in his conduct of the war on terrorism.

Although there is a deep political rift between politicalparties on National Missile Defense/Theater Missile Defense, it has notcreated a problem in dealing with Russia. Ancillary benefits of theresearch on NMD/TMD have already been recognized in the war onterrorism in Afghanistan in the form of precision weapons. However,some suggested that a policy shift from the creation of a land-basedsystem to one based in the sea and air would create more consternationand be seen as a much greater threat by China.

Finally, on the Middle East, support for Israel in the U.S.body politic is stronger today than before 9/11, but it has always beenstrong. This is attributable to: historical support going back to 1948;the fact that Israel is a democracy surrounded by non-democracies; andextensive and effective lobbying. It should also be noted that in thecourse of shaping U.S. policy toward the Middle East, President Bushhad negative dealings with Yasir Arafat. Generally, the upcoming Houseand Senate races should not be greatly affected by the Middle Eastcrisis. However, the presidential race in 2004 could be, as Florida(with a substantial Jewish population) will be key. Otherconstituencies, such as the large Arab population in Michigan, mightalso be important.

Conclusion

While the Williamsburg Conference holds no formal concludingpanel, a number of ideas can be gleaned from discussions throughout.First, terrorism and the war on terrorism will continue to be majortopics of consideration until we meet again. Of overarching concern toany discussion of international politics and foreign policy in theforeseeable future will be the search for definitions, causes, andcures of terrorism, the capacity of countries to work together in thewar on terrorism, and the question of how countries should addressthese issues. Second, while participants debated the hopes for Japan'sreturn to sustained growth and discussed the hindrance or hope that theChinese economy represents for other economies in the region, theyagreed that overall the economies of Asia appear to be on the reboundfrom the recent downturn in the global economy. This said, countriesstill need to focus on the basics to improve domestic and internationalincentives for growth and investment. Third, Malaysia, Indonesia, andASEAN were seen as overwhelmingly important to the future of SoutheastAsia. Taking place in mainly Muslim Malaysia, the conference included ahealthy discussion of local politics, the war on terrorism, and thefight for the soul of Islam. The struggle over Islam was also prominentin the dialogue on Indonesia, as was a discussion of Indonesia'seconomic situation. While ASEAN still has a long way to go,participants saw reason for raised expectations. Finally, the role ofthe United States in the region remains crucial. While dealing with itsdomestic political situation, the U.S. must remain vigilant to thespecific needs of individual countries, particularly as the war onterrorism proceeds.

Participants

AUSTRALIA
Anthony Milner, Dean of Asian Studies, Australian National University
Michael Richardson, Senior Asia-Pacific Correspondent, International Herald Tribune
Merle C. Ricklefs, Dean, Melbourne Institute of Asian Languages & Societies, University of Melbourne
Richard A. Woolcott, Founding Director, AustralAsia Center of the Asia Society

BRUNEI
Lim Jock Seng. Permanent Secretary, Ministry of Foreign Affairs
Timothy Ong, Executive Chairman, Asia-Inc.

CANADA
Paul M. Evans, Institute of Asian Research and Liu Center for the Study of Global Issues, University of British Columbia

CHINA
Pan Guang, Director, Shanghai Center of International Studies

DEMOCRATIC PEOPLE'S REPUBLIC OF KOREA
Kim Yong Song, Desk Officer, Department of U.S. Affairs, Ministry of Foreign Affairs
Pak Myong Guk, Office Director, Department of U.S. Affairs, Ministry of Foreign Affairs

HONG KONG
Joseph Lian, Member, Central Policy Unit, The Government of Hong Kong, SAR

INDIA
Pajamanabha R. Chari, Director, Institute of Peace and Conflict Studies

INDONESIA
George S. Tahija, President Director, PT. Austindo Nusantra Jaya
Jusuf Wanandi, Member, Board of Trustees, Centre for Strategic and International Studies
Sofjan Wanandi, Chairman, The Gemala Group

JAPAN
Ichiro Araki, Director of Research, Research Institute of Economy, Trade and Industry
Akiko Fukushima, Director, Policy Studies and Senior Fellow, National Institute for Research Advancement
Kazutoshi Hasegawa, Senior Advisor, ITOCHU Corporation
Motoshige Itoh, Professor of Economics, University of Tokyo
Masaki Miyaji, Senior Vice President and General Manager, Corporate Strategy & Research Department, Mitsubishi Corporation
Minoru Murofushi, Chairman, ITOCHU Corporation
Yoshio Okawara, President, Institute for International Policy Studies
Seiken Sugiura, Senior Vice-Minister for Foreign Affairs, Ministry of Foreign Affairs
Fujita Satoshi, Senior Vice President, NTT Communications Corporation

MALAYSIA
Zainah Anwar, Executive Director, Sisters in Islam
Mirzan Mahathir, President, Asian Strategy and Leadership InstituteKarim Raslan, Partner, Raslan Loong
Noordin Sopiee, Chairman & CEO, Institute of Strategic and International Studies
Michael Yeoh, Chief Executive Officer, Asian Strategy and Leadership Institute

NEW ZEALAND
Dryden Spring, Chairman, Asia 2000 Foundation of New Zealand

PAKISTAN
Javed Jabbar, Chairman, South Asian Media Association

PHILIPPINES
Doris M. Ho, Chairman of the Board, Magsaysay Maritime CorporationWashington SyCip, Founder, The SGV Group

REPUBLIC OF KOREA
Kim Sangwoo, Ambassador for International and Strategic Affairs, Republic of Korea
Noh Kyu-Duk, Deputy Director, North America Division II, Ministry of Foreign Affairs and Trade

SINGAPORE
Melissa Aratani-Kwee, Director, Project Access (PAX)
Manu Bhaskaran, Partner and Member of the Board, Centennial Group Inc.
Tommy T.B. Koh, Ambassador-at-Large, Ministry of Foreign Affairs
Arun Mahizhnan, Deputy Director, Institute of Policy Studies
Simon Tay, Chairman, Singapore Institute of International Affairs

TAIWAN
Tsai Ing-wen, Chairperson, Mainland Affairs Council

THAILAND
Thanong Bidaya, Vice Chairman, Council of Economic Advisors to the Prime Minister, Thailand
Kantathi Suphamongkhon, Trade Representative, Government of Thailand
Pote Videt, Managing Director, Equity Research, Lombard Investments

UNITED STATES
Marshall M. Bouton, President, Chicago Council on Foreign Relations
Carla A. Hills, Chairman & CEO, Hills & Company
Marie T. Huhtala, U.S. Ambassador to Malaysia, U.S. Embassy in Malaysia
Sidney Jones, Director, Indonesia Project, International Crisis Group (Indonesia)
James A. Kelly, Assistant Secretary of State for East Asian and Pacific Affairs, U.S. Department of State
Norman J. Ornstein, Resident Scholar, American Enterprise Institute for Public Policy Research
Nicholas Platt, President, Asia Society

OBSERVERS
Mazwin Meor Ahmad, Asian Strategy and Leadership Institute
Datuk Yalya Baba, General Manager, National Biotechnology Directorate, Ministryof Science, Technology and the Environment
Justin Brown, Assistant to the Chairman, ITOCHU Management Consulting, Ltd.
Chang-Hsieng-Hwei, Personal Assistant, Mainland Affairs Council
June Cheah, Asian Strategy and Leadership Institute
Caroline Cheong, Asian Strategy and Leadership Institute
Serman Chow, Assistant to the Chairman, ITOCHU Management Consulting, Ltd.
Carol P. Herring, Vice President, External Affairs, Asia Society
Ann Honarvar, Deputy Director, Asia Society Hong Kong Center
Akio Hotta, President, NTT MSC
Huang Yen-Chao, Taipei Economic and Cultural Office
Shinji Ishii, Assistant to the Chairman, ITOCHU Corporation
Hee Chung Kim, Program Assistant, Williamsburg Conference, Policy and BusinessPrograms, Asia Society
Elizabeth Lancaster, Executive Associate, Asia Society
Gary C. Larsen, President, Agincourt Financial Group
Frances Lee, Taipei Economic and Cultural Office
Lee Poh Ping, Professor, University of Kebangsaan Malaysia
Lim Chai Mee, Asian Strategy and Leadership Institute
Michael Lu, Director of Corporate, M&E (China), Inc.
Tsuneichiro Massaki, CEO, ITOCHU Corporation Malaysia Branches
Robin K. McClellan, Economic Counselor, U.S. Embassy in Malaysia
Aamir Nordin, National Biotechnology Directorate, Ministry of Science, Technology and the Environment
Robert W. Radtke, Vice President, Policy and Business Programs, Asia Society
Toshihiko Saito, Director of General Affairs, NTT MSC
Freda Wang, Representative, Asia Society Shanghai Representative Office
Jean Wong, Chief Operating Officer, Asian Strategy and Leadership Institute

RAPPORTEUR
Michael G. Kulma, Program Officer, Policy and Business Programs, Asia Society