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Blog Post

May 21, 2021

The mythology of a rising Asia…and how America can make a difference

By Vasuki Shastry

In Washington, DC, where bipartisanship is fraying, there is widespread consensus that Asia is the world’s most dynamic region. The superlatives used to describe the region keep flowing, and speeches from policymakers and business leaders are replete with references to the Asian miracle. The only problem with this rare example of bipartisanship is that it is built on shaky foundations.

The mythology of a rising Asia is inaccurate for two reasons: first, developed Asia cannot be considered to be rising, as it has already arrived; second, many of the parts of Asia that are rising are growing at the cost of social success, raising a myriad of issues. To be sure, there is a high-income Asia. However, this group of countries, which includes Japan and the Asian tigers, has already risen. Then, there is developing Asia, a part of the region which includes the three giants India, China, and Indonesia. They account for a huge proportion of the continent’s population and are looking increasingly dystopian­–suffering from stalling social mobility, rising inequality, a sclerotic political and business class, and an economic model built on a beleaguered notion of globalization. Boosters point out that the region pre-pandemic was still witnessing high rates of economic growth that may well continue into the future. However, as New Zealand Prime Minister Jacinda Ardern pointed out recently: “Economic growth accompanied by worsening social outcomes is not success. It is failure.”

As the Biden administration asserts a renewed US focus on the region, it needs to adjust its language, policies, and narrative on how to position itself. For a start, geopolitics—especially the specter of a rising China—provides the obvious impetus for developing Asia to be a priority. The Trump era is remembered in the region for erratic policymaking and a real sense that US security insurance, a reliable feature which embedded political and economic security since the 1960s, would perhaps be less forthcoming in coming decades. This forced many of China’s neighbors to privately recalibrate expectations of US support and hedge their bets. For some countries, Beijing’s transactional diplomacy approach, which is a messy blend of coercion and financial support, suited them admirably. For many others, it was not only US ambivalence on regional security which bothered them. Rather, the fact that the United States simply failed to show up to talk about the region’s many political, social, and economic challenges was a clear sign of retreat. As part of its policy reset, the Biden administration should pay close attention to what is happening on the ground and listen carefully to messages from the Asian street.

There is great disquiet and unease among young Asians about stalling social mobility and shrinking economic opportunity. Developing Asia has made tremendous strides in recent years in making a college degree accessible and affordable. However, this massification of university education has come with social costs. There is a growing cadre of university graduates without jobs, and this disaffected group are a vocal, voluble minority in many countries. The youth-led protests in Hong Kong, Thailand, and Myanmar were triggered by different sets of local grievances, but have a common thread in being organized by educated youth who feel that they do not have a voice, and that social mobility is going to be more constricted than in their parents’ generation. This feeling of disempowerment has brought thousands to the streets in protests the size of which the region has not witnessed in several decades. Linked with this is the growing generational divide between the ruler and the ruled. With two exceptions, North Korea’s Kim Jong Un and Indonesian President Joko Widodo, all Asian leaders were born in the radio and telegraph era (of the 1940s and 1950s), and this gerontocratic class is out of touch with the hopes and aspirations of the younger generation. Engaging with youth and opening up avenues for education and economic opportunity should be a major objective of US foreign policy.

Asia’s political and business class also pose a growing risk to the region’s cohesiveness and stability. There was a time not so long ago when one could make a sharp differentiation between Asian democracies and dictatorships. India’s chaotically vibrant political system, for example, had no similarities with the command-and-control one-party rule in China or Vietnam. These differences are becoming nebulous as Asian democracies led by India are increasingly embracing Chinese political characteristics. Prime Minister Narendra Modi and Philippine President Rodrigo Duterte resemble President Xi Jinping in their accumulation and centralization of power and intolerance of critics, especially when compared with President Jokowi of Indonesia, where a relatively vibrant democracy has taken shape after the chaos of the Asian financial crisis over two decades ago.

There will be a political reckoning for the Asian governments which have mismanaged the Covid-19 pandemic; India and the Philippines stand out in this regard. The United States can play an important role in speaking up for democratic values and human rights and in bolstering support for journalists, NGOs, and the political opposition which are under attack across developing Asia. This can be achieved through more people-to-people engagement. The planned, high-profile summit of democracies, which the administration appears keen to convene, should be an opportunity for the Biden administration to build an alliance based on shared values. The message that the United States’ own democracy is imperfect and a work in progress will help in fostering genuine debate and discussion.

A final point about China. The stress and strains in the US-China relationship are a clash between competing systems and ideologies, and less of a new Cold War. While the United States slept over the past decade, China scaled up its renminbi diplomacy by winning friends and influencing countries all over the developing world, including in Asia. The massive levels of financial support which China has provided through the Belt and Road Initiative (BRI) faced a reckoning even before the pandemic, as recipient countries were overburdened with debt to China and unsustainable infrastructure projects. As developing Asia starts the long process of recovery from the pandemic, the United States must step in with innovative ideas on how the region can foster sustainable development, green infrastructure, and an inclusive digital economy. USAID and the US Development Finance Corp. should be the focal points of this strategy, with the private sector in the driver’s seat. There will be a more level playing field as the era of China offering hundreds of billions of dollars in development assistance has hopefully come to an end, mainly as recipient countries realize the enormous political and financial costs associated with such borrowing. The United States now has an opening to reassure allies in Asia that it is back and to articulate its intent with a more realistic assessment of the region’s many challenges. The endpoint for developing Asia may well turn out to be as rosy and shining as boosters make it out to be. However, the journey to get there will be rocky and unpredictable, and the United States can make a huge difference by speaking up and—more crucially—showing up with support as the region rebuilds.

Vasuki Shastry, formerly with the IMF, Monetary Authority of Singapore, and Standard Chartered Bank, is the author of “Has Asia Lost It? Dynamic Past Turbulent Future.” Follow him on Twitter at @vshastry.

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