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12 Oct, 2008

Asia Must Influence New World Order, Not Be Influenced by It

Originally Published: 12 Oct 2008

The current global financial crises has revived nightmares of 1997 redux. Particularly vivid in the memory is former Prime Minister Mahathir Mohammad’s reference to the role of financial terrorists as they profit from the misery of millions – and walk free.

It has also raised serious questions about who can speak for Asia at this critical juncture of history, and demand from the so-called global financial regulatory watchdogs at the IMF and the World Bank the same kind of transparency and accountability that was sought from us in 1997.

The hypocrisy and double standards that dominated the world order in those days are still around today. As usual, our leaders in the Asia Pacific are doing little or nothing about it.

Although he was jeered at the time, Mahathir was spot-on in his choice of words. Real-life terrorists may engage in acts of violence but financial terrorists trigger violence by extension, and are never held responsible.

Last week, it was widely reported in the media of India and California, but barely in the global media, that an Indian-American, reduced from a millionaire to a pauper, shot dead his wife, three sons and mother-in-law before killing himself in an upmarket Los Angeles neighbourhood.

Karthik Rajaram, 45, was a former financial adviser with PriceWaterhouseCoopers. The media reports suggested that it “appears to be one of the first tragedies linked to the US economic meltdown.”

That may be only the tip of the iceberg. Like life in a gambling den, you play the dice, and if you lose, that’s your problem. Except that this is no ordinary gambling den but a worldwide chit-fund operation that would make our own Mae Chamoy (remember her?) turn green with envy.

The biggest issue is why it has come to this stage in the first place? Who knew what was going on, and when did they know it? What happened to those so-called early warning systems that the IMF and World Bank were supposed to have helped set up in the aftermath of the 1997 crisis?

Why did they not work? And who should be held accountable?

Much of the responsibility for raising these questions lies in the hands of the UN Economic and Social Commission for the Asia-Pacific. Clearly, it is failing to exercise the leadership expected of it in voicing these very legitimate and obvious concerns, on behalf of the nearly three billion under its geographical purview.

Since the crisis unfolded, UN ESCAP’s public announcements have focussed on “green growth” partnership with Korea, efforts to end child labour, Habitat Day and technology to help people with disabilities. Nothing wrong with any of those issues, but do they come anywhere near reflecting the far more immediate and pressing concerns of today?

Since taking over last year, Executive Secretary Noeleen Heyzer, the first woman and the first Singaporean to head ESCAP, has made numerous changes in the organisation purportedly to make it more efficient and productive. But shuffling deckchairs around while Rome is real danger of burning down yet again is downright irresponsible.

ESCAP’s policy papers and annual reports tend only to react to global developments, and outline their impact on the Asia-Pacific. Today, however, the Asia-Pacific needs less reaction and more table-thumping, pre-emptive pro-action.

The UN’s primary roadmap is focussed on attaining the Millennium Development Goals, the lofty targets for poverty alleviation and a host of other ills which must be eradicated by the year 2015. But in the last few years, there seems to be plenty of money in the global system for everything except attaining those goals.

There’s no shortage of money for the war in Iraq which was mounted to find weapons of mass destruction which proved to be non-existent. Billions of dollars have been expended on it, as well as on its corollary “war on terror”.

Similarly, billions seem to be miraculously available to bail out ailing banks, which was not supposed to happen at all in an age of the privatisation, deregulation and liberalisation and unbridled free-market capitalism.

The World Trade Organisation talks collapsed because developing countries finally began to assert themselves, and demand removal of the agricultural subsidies for which western countries again seem to have billions available, even though they inflict significant damage on the farmers of developing countries.

Climate change has become an issue, largely as a result of decades of profligate energy consumption by the rich, industrialised countries. The sudden rise and fall in oil prices is now well known to have been the work of speculators, brokers and commodity traders (another breed of capitalist terrorists), and no-one has been held accountable.

If we are seeing the emergence of a new world order, Asia will need to become a little bit more assertive in influencing it, rather than being influenced by it, and a little bit more demanding in seeking accountability and transparency from those seeking to remold it, primarily on their own self-serving terms.

In 1997, our business, political, and economic leaders were pilloried, chided and insulted for the rampant cronyism, corruption, and nepotism that caused the crash. So how about the cronyism, corruption and nepotism in AIG, Lehman Brothers, Goldman Sachs, the U.S. Treasury and Federal Reserve?

Is accountability a one-way street?

In the past 20 years nobody would have believed that a day would come when communism would collapse, and so would corporations like Lehman Brothers and AIG? Nobody would have believed that the world would survive nearly $150 a barrel oil.

If the age of capitalism began with the fall of the Berlin Wall, its demise has begun with the fall of the other wall – Wall Street. Effectively, this empire of bubbles, hedge funds, derivatives and inflated bonuses has lasted a mere 19 years. The Berlin wall fell in 1989 – next year will be its 20th anniversary.

Ultimately, as I have repeatedly asserted in this column, unjust rulers always fall, always. Today’s crumbling walls are the first sign of that bigger fall to come.