The Williamsburg Conference 2001
Report from the 2001 Williamsburg Conference, Okinawa, Japan, March 17-19, 2001.
Agenda
The 29th Williamsburg Conference was held in Okinawa, Japan from March 17 to March 19, 2001. The conference,
hosted by the International House of Japan, was convened by Carla
A. Hills of the United States, Tommy T. B. Koh of
Singapore, and Minoru Murofushi of Japan.
Saturday, March 17
Opening Reception and Dinner
Keynote Speech: Asia/Pacific and Japan in the 21st Century
Takeo Hiranuma,
Minister, Economy, Trade & Industry
Sunday, March 18
Session 1: U.S.-Asia Policy and the New President
- How will the new administration order its priorities in Asia and are there likely new emphases that will emerge?
- Are national/theatre missile defense (NMD and TMD) the most effective ways for the U.S. to approach security concerns? Are there better ways to address the challenges posed in the region?
- What are the domestic factors in the U.S. driving NMD and TMD?
- Will the next administration pursue a new trade round and how aggressive will it be in linking environmental and labor concerns to trade?
- How will U.S. relations with Asia's major powers (China, India, Indonesia, and Japan) change under a new administration?
Chair
Carla A. Hills,
Chairman, Hills & Company
Opening Discussants
Desaix Anderson,
Executive Director, KEDO
Norman J. Ornstein,
Resident Scholar, American Enterprise Institute for Public Policy Research
Stanley O. Roth,
Former Assistant Secretary of State for East Asia and Pacific Affairs
Lead Commentator
Yoshio Okawara, President, Institute for International
Policy Studies
Session 2: Asia's Economic Prospects: Policy, Politics,
and
Information Technology
- What are the prospects for the economies of Asia? Will growth
return?
If not, why not? - What are the constraints on economic reform in Asia? Are
politics
enhancing or hindering economic progress? - What are the long-term implications of the IT revolution
for future
economic growth in Asia? Will it provide the engine of growth for Japan and others? - How can countries in Asia broaden participation in the IT revolution and overcome the so-called digital divide?
Chair
Nicholas Platt,
President, Asia Society
Opening Discussants
Han Seung-soo,
Member of Parliament, Committee on Unification, Foreign Affairs and Trade, Former Deputy Prime Minister and Minister
of Finance, Republic of Korea
Arun Mahizhnan,
Deputy Director, Institute of Policy Studies
Hugh M. Morgan,
Chief Executive Officer, WMC Limited
Keiji Tachikawa,
President & CEO, NTT DoCoMo, Inc.
Lead Commentator
Catherine L. Mann, Senior Fellow, Institute for International
Economics
Monday, March 19
Session 3: Japan
- What are the prospects for the Japanese economy? Are policies in place for a return to sustained growth? What are the implications of the "new economy" for Japan?
- How will Japan's political parties and structures address the challenges posed by the aging population? The greater presence of women in the workforce? Falling birthrates? What are the implications of these trends for the future of Japan?
- How do Japan's emerging leaders envision Japan's role in the region and the world? See the future of the U.S.-Japan relationship?
Chair
Minoru Murofushi,
Chairman, ITOCHU Corporation
Opening Discussants
Toru Hashimoto,
Chairman of the Board of Directors, The Fuji Bank, Limited
Noboru Hatakeyama,
Chairman & CEO, JETRO
Akira Kojima,
Managing Director, Chief Editorial Page Editor, Nihon Keizai Shimbun, Inc.
Toshiaki Ogasawara,
Chairman & Publisher, The Japan Times
Lead Commentator
Ronald J. Anderson, Senior Vice President & Chairman,
AIG Companies in Japan and Korea
Session 4: Political and Security Prospects
- What are the long-term political and security prospects for the Korean Peninsula, and what are the implications for long-term peace and stability in the region?
- How will the situation across the Taiwan Strait evolve?
- How can regional organizations, including ASEAN, APEC, SAPTA, and SAARC, be developed to bring parties with different agendas together in a setting that offers opportunities for dialogue?
- What is the future of Australia's engagement with Asia?
- What is an appropriate level of U.S. military presence in the region?
- What are the prospects for political and security stability in Southeast Asia, especially Indonesia, Malaysia, and the Philippines?
Chair
Tommy T. B. Koh, Ambassador-at-Large, Ministry of
Foreign Affairs, Singapore
Opening Discussants
Dewi Fortuna Anwar,
Associate Director for Research, The Habibie Center Tatsuo
Arima, Representative of the Japanese Government,
Ministry of Foreign Affairs
Paul M. Evans,
Director, Canada Asia Studies, Institute of Asian Research, University of British Columbia
Jang Chang Chon,
Director-General, Department of American Affairs, Ministry of Foreign Affairs, DPRK
Yang Bojiang,
Professor and Deputy Director, Northeast Asia Division, China Institute of Contemporary International Relations
(CICIR)
Lead Commentator
Richard A. Woolcott,
Former Secretary for Foreign Affairs and Trade, Founding Director, AustralAsia Center of the Asia Society
Foreword
In March 2001, the Asia Society, in partnership with the International House of Japan, brought together 51 leaders
in government, business, academia, and journalism from 17 countries and economies on both sides of the Pacific
for the twenty-ninth Williamsburg Conference. Held in Okinawa at the Bankoku Shinryokan, the venue of the 2000
Group of Eight summit, from the 17th to the 19th of March, the conference was the first to be convened in Japan
since 1992.
The Williamsburg Conference continued the tradition of transpacific
dialogue on key issues in Asia. At the crossroads of Northeast and
Southeast Asia and with 2001 being the 50th Anniversary of the
U.S.-Japan Alliance, Okinawa provided an excellent venue to convene the
Williamsburg Conference. As this report reveals, the building of new
relationships and the solidifying of old ones is crucial to stability
in the region. Relationship building requires strong leadership to look
for new and improved ways to work with others. Such leadership is
further needed to find fresh ways to grow economies, while addressing
the social needs and diversity of countries in the region. The critical
importance of the United States and Japan to the economic and security
situation in East Asia was the subject of considerable discussion.
Williamsburg Conference
coconvenors Carla Hills of the United States, Tommy Koh of Singapore,
and Minoru Murofushi of Japan enlisted a superb group of conference
participants and set forth a sharply focused and thorough agenda. In
addition, their efforts resulted in the first North Korean delegation
at a Williamsburg Conference. All of our coconvenors chaired their
sessions with great skill and impartiality. As our local host, Minoru
Murofushi went above and beyond the call of duty to ensure that all of
the arrangements for the conference were carried out graciously and
masterfully. The Asia Society owes him a deep debt of gratitude for his
vision and leadership of the twenty-ninth Williamsburg Conference.
After the
conference, Carla Hills spoke in San Francisco under the auspices of
the Commonwealth Club and the Asia Society to take the conference
discussion to a broader audience. This report extends further the reach
of the Williamsburg discussions.
The International House of Japan, under the able leadership of its executive director Mikio Kato, was an outstanding
co-organizer. Special thanks go to the entire staff of International House, ably led by Kimihiro Sonoda, for all
of their excellent work, with additional thanks to Yuriko Kato, Mr. Kato's wife, for all of her efforts on behalf
of the conference.
From the Asia Society, Marshall M. Bouton, who is stepping down shortly as executive vice president of the Asia
Society to become president of the Chicago Council on Foreign Relations, deserves accolades for again masterminding
the substance of the meeting. Marshall has provided leadership to the Williamsburg Conference for many years. He
has strengthened and diversified both the Conference agenda and the pool of participants. Rob Radtke oversaw the
coordination and organization of the meeting. Hee Chung Kim managed all the details with unwavering grace and skill.
Mike Kulma also provided invaluable assistance to the conference secretariat before donning his cap as conference
rapporteur. Karen Fein and Hee Chung Kim deserve credit for their hard work in bringing this report to print, as
does Chae Ho Lee for his work in its layout.
The coconvenors and I are most grateful to the conference funders,
whose names are listed in the back of this report. Without their
support, this year's Williamsburg Conference would not have been
possible.
Nicholas Platt
President, Asia Society
May 2001
SESSION 1
U.S.-Asia Policy and the
New President
Meeting less than two months into the Bush administration, Williamsburg Conference participants assessed the state
of American political, economic, and security concerns and their implications for U.S. policy toward Asia. A number
of key issues were addressed in considering the Asia policy of the new Bush administration: the importance of the
U.S. political situation, the care that needs to be taken in analyzing the situation so early in the administration,
the pressing issues with which the administration must deal, and the ideas the U.S. needs to implement as seen
through the eyes of its Asian neighbors.
The U.S. Political Situation
Participants stressed that the U.S. domestic political situation was
crucial to its policy toward Asia. In considering the domestic
political situation, two areas of discussion received most prominent
treatment. These two areas included the tenuous nature of the
Republican Party's hold on power and the possible differences of policy
viewpoints within the Bush administration.
The 2000
U.S. elections resulted in the most closely contested U.S political
situation in the last 30 years. The narrow victory for President Bush,
a House with a slim Republican majority, and a Senate split 50/50,
indicates just how tightly contested politics will be in the U.S. for
some time to come. These close margins pose a challenge to economic and
trade policy, as a few votes across party lines could change the way
America does business with Asia. Besides votes across party lines, this
delicate balance in Congress could further be challenged by any number
of potential upcoming events. In particular, participants pointed to
two things that could shift the balance of political power from the
Republicans to the Democrats. First, it was suggested that due to
health and age considerations Republican senators Jesse Helms and Strom
Thurmond might seek early retirement. If this were to happen, the
balance of power in the Senate would switch to the Democrats, as the
Democratic governors in the senators' respective states would
undoubtedly appoint Democrats to the empty Senate seats. This would
result in a 52/48 advantage for the Democrats in the Senate with
subsequent policy implications. Second, much as the United States
experienced in the midterm congressional election of 1994, in which the
Republicans scored a decisive victory, the 2002 midterm elections could
swing congressional power to the Democrats. Compounding the challenge
of a narrowly divided Congress was the fact that 75 percent of its
members are seen as relatively new arrivals, who have joined since the
end of the cold war. This being the case, it was suggested that a
global perspective might not be as important to them as it was to
previous generations of leaders. The possibility of a more insular U.S.
foreign policy was a cause of great unease to leaders around Asia.
The possibility of policy divergence within the decision-making hierarchy of the Bush administration and its impact
on Asian policy need to be addressed. Conferees pointed out that there were early signs of policy divisions among
personnel at the highest echelons of power. For example, there seemed to be disagreement between the White House
and Secretary of State Powell in their recent contradictory remarks regarding South Korea's policy of engagement
with North Korea, to help the North economically and otherwise, foster goodwill between the two Koreas, and bring
permanent peace to the peninsula (known as the sunshine policy). This divisiveness, coupled with the president's
purported propensity to take a position and stick to it, could complicate U.S.-Asia policy, sending mixed signals
to both allies and competitors alike. This makes the perspectives of the personnel who fill the numerous still
vacant positions in the State Department and at the Pentagon all the more important.
What Have We Seen and Where Will We Go?
All conference participants believed that it was too early in the administration to suggest a definitive Bush policy
toward Asia. However, they suggested that one might shed light on the path of future policy by looking at confirmed
and nominated personnel, watching meetings between the Bush administration and Asian leaders, and understanding
the place of campaign rhetoric in the making of policy. Conferees agreed that among the first-tier of power in
the Bush administration, which includes Vice President Cheney, Secretary of State Powell, Secretary of Defense
Rumsfeld, Secretary of the Treasury O'Neill, and National Security Advisor Rice, there exists great foreign policy
experience and integrity, but not much Asia experience.
However, participants were very pleased with the presence of numerous nominees (Wolfowitz, Armitage, Zoellick,
and Kelly) who have Asia experience in the second-tier of power. In fact, personnel at this level were seen as
more knowledgeable about Asia than their most recent predecessors were initially.
Participants stressed the need to watch the president's growing
personal relationships with leaders from Asian countries in current and
planned meetings. It was suggested that President Bush appeared to have
a way with people that might soften the blow of his anticipated
hard-line policy. A number of opportunities to build such relationships
had occurred, were occurring, or would occur soon after the completion
of the conference. For example, South Korean President Kim already met
President Bush, Japanese Prime Minister Mori was meeting him, and
China's Vice-Premier Qian Qichen was scheduled (March 23) to meet with
him. Furthermore, President Bush was scheduled to attend meetings with
world leaders in Quebec and with leaders of the G-8 nations in June,
and he has agreed to attend the APEC summit later this year in
Shanghai. While there was debate over the ramifications of the meeting
between presidents Bush and Kim, at the very least, the meeting was
seen as an early indication of the importance President Bush placed on
U.S. relations with Asian nations.
Others expressed overwhelmingly negative sentiments when considering
future Asia policy under a Bush administration. For example, during
President Kim's visit to Washington, President Bush seemed to distance
himself from South Korea's sunshine policy by emphasizing his concern
with North Korean behavior. At the same time, President Bush suggested
the need for a review of U.S. policy toward the Korean Peninsula. These
steps were viewed by some to be particularly damaging to any prospects
for reconciliation between North and South Korea or for a normalization
of relations between the U.S. and North Korea.
Finally, those who showed concern for President Bush's forceful campaign rhetoric interpreted his early moves as
indications that his policy would proceed as suggested. However, it was stressed that over time one can expect
to see continuity in policy (from one administration to the next) despite earlier pronouncements. The most often
noted example of this was President Clinton's move from his vitriolic campaign rebuke of George Bush Sr.'s China
policy, to an eventual suggestion of "strategic partnership" with China.
Issues of Concern at Home and Abroad
While there existed many important regional issues for the new
administration to deal with regarding its Asia policy, the
participants' list of the most pressing issues included:
national/theatre missile defense; the situation on the Korean
Peninsula; the slowdown in economic growth, particularly in the United
States; India and Pakistan; the sale of weapons to Taiwan; and trade
policy issues. Asian participants were overwhelmingly opposed to the
national/theatre missile defense system proposed by the Bush
administration. U.S. participants undoubtedly held mixed views, and
some who were critical were more critical of the process employed than
the objective sought. The implementation of such systems has
considerable implications for security and stability in the
Asia-Pacific region. Most significantly, it was feared that the
building of NMD or TMD might lead to a major arms buildup in the
region, both conventional and nuclear. Such systems seemed set to sour
relations between the United States and China. China fears two things:
one, that the missile defense system would contain its small nuclear
arsenal, and two, that the defense shield might be extended to protect
Taiwan.
Thus, the building of a missile defense system could lead to an arms
build-up in China, which would lead to an arms build-up in India, which
would induce other countries to increase defense spending. In addition,
Asian countries perceived the U.S. decision to proceed with the
development of these systems as unilateral in nature, which has the
potential to threaten the nature of the U.S. alliance system. According
to conferees, the lack of dialogue between the U.S. and other countries
was reflected in the weak U.S. domestic debate on these systems.
Participants called for a more intelligent discussion in the United
States on the pros and cons of these systems. Among other things, the
public in the United States needs to question the viability of these
systems, their monetary costs, and their nonmonetary costs.
Relations on the Korean Peninsula were seen as being at a critical stage and there were concerns that the Bush
administration, with its seemingly tough-line rhetoric, might negate the many positive steps taken over the last
few years. Participants pointed to the meeting between the leaders Kim, growing reciprocity in the relationship,
the possibility of a missile agreement between the U.S. and North Korea, the recent normalization of relations
between North Korea and many European countries, and the South's sunshine policy as hopeful steps in the right
direction. However, there were still many unresolved issues that the administration needs to address.
The current slowdown in the U.S. economy was of great concern to Asia.
Different reports suggested varying conclusions on the future direction
of the U.S. economy. However, an Asia still working its way out of the
economic woes of the 1997-98 crisis, and an Asia inextricably linked to
the global and U.S. economies, voiced concern over slowed U.S. growth
and its ramifications for domestic economic and security environments.
In fact, exports from Asia to the United States have already started to
decline as a result of the rather abrupt slowing of the U.S. economy.
The discussion about India and Pakistan was brief. There were opinions that the implementation of NMD or TMD would
lead to an arms race between India and China. Furthermore, there was some suggestion that the Bush administration
might take stances less confrontational to India, for example, by not wishing to intervene in conflicts, such as
that in Kashmir. The discussion of Pakistan revolved around this issue of Kashmir and concern over the possible
disintegration of the Pakistani state.
Participants were also wary of possible arms sales to Taiwan. At the time of the conference, the new administration
was already involved in the process of deciding whether or not to sell advanced weapons to aid in Taiwan's defense.
The most contentious of these proposed sales are Aegis destroyers equipped with advanced radar technology, adaptable
to future missile defense technology. There was concern that, if such sales took place, relations between the United
States and China would be severely damaged with subsequent implications for peace and stability in the region.
Regarding Taiwan, there was further concern about suggestions that the Bush administration will not adopt the "three
no's" policy (no Taiwan independence, no two Chinas, and no participation by Taiwan in any organization for
which statehood is a prerequisite of membership) in its relations with China and Taiwan. As this has served as
one of the foundation stones of China's relationship with the U.S. and other nations in recent years, any undoing
of this policy could further fray relations.
Finally, trade policy issues were of some concern. In particular,
issues of free trade and fast-track authority were discussed. Some
believed fast-track authority would be granted. Most Republicans, it
was felt, will vote for it and the hope is to get a sufficient number
of Democrats on board. Others were not as optimistic. Labor and
environmental movements are against it, while the general public in the
United States is still largely split over, if not flat-out dubious
about, the benefits of free trade. Participants were also somewhat
divided as to how crucial fast-track authority was to successful trade
negotiations. A few panelists believed that the U.S. could get what it
wanted from other countries regardless of whether or not the president
had fast-track authority. Others maintained that, the president lacking
fast-track authority, the United States received other countries'
second-best offers in trade negotiations.
As Asia Sees It
Participants from around the region acknowledged that the United States
needs to do a number of things in the process of developing its Asia
policy. The U.S. must work with allies (for example, Japan and South
Korea) and others (for example, China and Russia), particularly on the
issue of national/theatre missile defense to avoid a possible arms
race. At the same time the U.S. also needs to have a richer domestic
discussion of these systems and other Asia-related topics. It needs to
ensure that its economy has a soft landing, as it is generally believed
that the continued growth of the U.S. economy is vital to the region's
economies and thus stability and security. The United States also needs
to address the possibility of military cooperation with Indonesia and
improved relations with Cambodia and Myanmar in light of recent
positive events. Finally, the U.S. needs to build on the positive
outcomes from the last year in its relations with North Korea.
SESSION 2
Asia's Economic Prospects: Policy, Politics, and Information
Technology
Asian countries have come a long way since the economic crisis of
1997-98. In fact, most of the Pacific Rim economies enjoyed robust
economic growth in 2000. Hong Kong and Singapore grew 10 percent;
China, Malaysia, and South Korea 8 to 9 percent; and the other
economies (except for Japan, which hovered at about 1 percent) recorded
a very respectable 5 to 7 percent growth. However, this year's growth
throughout the region is expected to drop precipitously. In particular,
drops in exports as the U.S. economy slows will result in job loss and
depressed economic demand at home.
With a roller coaster economic
situation confronting policy-makers it should come as no surprise that
participants were divided on the future prospects for the economies of
Asia. Some were guardedly optimistic. For example, restructuring, while
begun, needs to continue. There need to be good macro policies in place
and the U.S. economy needs to be growing. Also, while dot-coms are
hurting, the old economy is starting to grow again. Others pointed to
the move by China toward greater privatization, the growth potential of
Japan, the relative health of Taiwan, Hong Kong, and Singapore
economies, and the integration of the rest of Southeast Asia, as
reasons for optimism. But others proved much more pessimistic in their
analysis of Asia's economic prospects, citing the lack of capital flows
to ASEAN markets, the lack of fundamental changes in the regional
economies, the rise in unemployment throughout the region, and the
general lack of growth in productivity.
Continued Constraints on Economic Reform
Many obstacles to economic reform still exist. These include: a lack of
political leadership to make the changes necessary to complete or begin
the reform process (this weak leadership is evidenced by the
impeachment of Philippine president Estrada, the near-impeachment of
the presidents of Indonesia and Taiwan, and the election in Thailand of
a new premier after his indictment by his government's Anti-Corruption
Commission); culture and the need for cultural preconditions for
economic reforms, one example being the need to realize that failure is
to be expected; politics and its concentration on short-term as opposed
to long-term considerations; the widespread lack of independent
judiciaries; the widespread distortion of the market through government
intervention; the lack of institutions to enforce contracts; and (one
participant suggested) that democracy in Asia resulted in greater
market instability, which investors would prefer to avoid.
Asia and Information Technology
Whether Asia stands fully ready to embrace the information technology revolution or not, the revolution is here
to stay. Most participants agreed that Asia was actively embracing information technology. Some went so far as
to say that IT would serve as the future engine of growth for economies in the region. All believed that becoming
part of the information technology revolution was inevitable, although there was some debate as to whether or not
becoming a part of the IT boom is a choice for governments to make.
This led to a discussion of the proposed economic benefits of
information technology. The U.S. served as the IT-benefits poster
child. Benefits to the U.S. economy were seen in a decade of growth
largely driven by a policy environment that enabled the use of
technology, thereby leading to greater productivity, lower
unemployment, and other positive economic results. More generally
speaking, possible benefits to computer networking included increased
efficiency and competitiveness, more effective public services,
exploitation of factor costs, and increased social capital.
To grow the IT sector and reap these benefits effectively, participants
suggested a number of necessary preconditions. The need for political
leadership or a political visionary is paramount. Such strength of
vision was seen as necessary to setting a precedent for the people to
follow, while at the same time battling the bureaucracy and old economy
paradigms, leapfrogging old ideas and technology. Part and parcel of
this leadership effort was a perceived need for leaders to establish
electronic governments as an example to constituents that information
technology is not to be feared, rather it is to be embraced. However, a
top-down approach, while necessary, was not sufficient to ensure
success. At the same time, countries need to institute a bottom-up
approach, actively engaging local communities.
A number of regional efforts were pointed to as examples of such
leadership in policy-making. One important step that Japan has taken in
an effort to address the importance of information technology was
"e-Japan," which serves as the basis for Japan's national information
technology strategy. Among e-Japan's many objectives is increasing
broadband subscriptions in Japan from 5 million in 2002, to 30 million
in 2005. Furthermore, the e-Japan initiative attempts to increase
Internet access in Japan through the development and production of
"information appliances" (non-PC), the type of technological innovation
that Japan has thrived on over the last 50 years.
Similarly, ASEAN recently instituted the "e-ASEAN" framework agreement.
The goals of e-ASEAN include: the promotion of cooperation to develop,
strengthen, and enhance the competitiveness of the ICT (information and
communications technology) sector in ASEAN; the promotion of
cooperation to reduce the digital divide within individual ASEAN member
states and among ASEAN member states; the promotion of cooperation
between the public and private sectors in realizing e-ASEAN; and the
promotion of the liberalization of trade in ICT products, ICT services,
and investments to support the e-ASEAN initiative.
Finally, Malaysia's Multimedia Super Corridor (MSC) serves as an
example of another innovative regional initiative. The Super Corridor
was created to help companies of the world test the limits of
technology and prepare themselves for the future. Conceived as a
corridor 15 kilometers wide and 50 kilometers long, it starts from the
Kuala Lumpur City Center (KLCC) and proceeds down to Kuala Lumpur
International Airport (KLIA). Two cities are being developed in the
corridor: Putrajaya, the new seat of government and administrative
capital of Malaysia, and Cyberjaya, a city with multimedia industries,
R&D centers, a Multimedia University, and operational headquarters
for multinationals wishing to direct their worldwide manufacturing and
trading activities using multimedia technology.
The spread of information technology and the need for economic reform were discussed at length. Generally speaking,
participants believed that the diffusion of new technology required the same things called for in other areas of
the economy in the past. Governments need to: develop institutions that can effectively deal with the economic,
political, and social ramifications of information technology; provide human resource development programs to help
train a new generation in the ways of information technology, as well as to re-train those whose jobs are made
extinct by the introduction of new technology (both points are part of an improved government capacity to deal
with the impact of informational technology); and deregulate, thereby reducing internal obstacles to the use and
entrepreneurial development of information technology, while enhancing the opportunity for external investment
in the IT sector.
Perhaps most interestingly, participants found that information
technology affects not only people's livelihoods, but also the ways in
which people choose to participate politically. This idea was looked at
from opposite ends of the spectrum. On the one hand, a participant
suggested that Internet expansion slowly led to the loss of government
control over the distribution of information while increasing the
possibility for cyber-terrorism (the use of computing resources to
intimidate, coerce, or control others). On the other hand, the
diffusion of information technology to the general public was seen as a
conduit for public participation in the political process. This is
evidenced by daily Web surfing, political discussions in online public
chat rooms, and the use of modern tools of technology (e.g., mobile
phones and pagers) to facilitate the coordination of political
demonstrations.
The Digital Divide
There was a lengthy discussion on the digital divide and whether it was
deepening or diminishing, its implications for other "divides," and
concrete suggestions and prospects for closing the divide. Data on the
digital divide and on its deepening or diminishing was sketchy at best.
For example, penetration of cellular phone use was suggested to be high
in Hong Kong, Taiwan, Singapore, South Korea, and Japan, while it was
lower in countries such as Malaysia, the Philippines, Thailand, China,
and Indonesia. This indicates that the digital divide is increasing.
However, with the cellular markets of the former countries more fully
saturated than those of the latter, the future expected growth rate in
the latter was such that the digital divide was expected to decrease in
the years to come. The same case was made for the market penetration of
the Internet in these countries.
Perhaps more important than whether we can adequately judge the
widening of the digital divide, a number of participants stressed that
the digital divide is indicative of other divides throughout Asia and
the rest of the world. As such, the notion of "digital divide" can be
noted and perceived in the following divisions: between the developed
and the developing economies in terms of technological level and
capacity profile; among the developed economies in terms of lack of
interconnectivity and harmonization of standards; of philosophies in
terms of risks and opportunities on information technology and quality
vis-à-vis quantity of available information; of public policies in
terms of acceptable risks and the pace of policy change; and as part
and parcel of the education, gender, and environmental divides.
In attempting to decrease the divide, one needs to simultaneously address these issues as well. Suggestions for
closing the divide were many and varied, covering a wide range of public and private initiatives, including the
need to: provide computers and mobile services to those without access; train and educate people to be individuals
and risk takers; set up digital opportunity taskforces; push for more non-English Web pages (as one participant
suggested that upward of 70 percent of all Web pages were in English); and learn from universities that are taking
advantage of IT, even in lesser developed countries. Some concrete steps in organizations such as ASEAN are already
being taken. For example, there are a Framework Agreement in place, an increasing proliferation of "cyber
laws," and a task force to deal with the digital divide issues.
SESSION 3
Japan
On the 50th Anniversary of the U.S.-Japan Alliance and with Okinawa as
its venue, this panel served as an appropriate forum for a major
discussion of Japan. Following almost 10 years of economic malaise, the
Japanese situation is fragile but hopeful. After the United States,
Asia looks to Japan for guidance and as an example for prosperity. From
the "flying geese" model of economic development, to donations during
the economic crisis, to addressing nonperforming loans, to promoting
democracy, Japan was viewed as a leader, albeit a leader that sometimes
needs to lead better. This resulted in a lively discussion about the
prospects for the Japanese economy, its reform, the changing social
landscape, and the role of Japan in the region.
Prospects for the Japanese Economy
Participants were positive, if guarded, in their hopes for the future of the Japanese economy. Most believed that
the Japanese economy would not indefinitely continue the average one percent growth found over the last decade.
In fact, while economic numbers did not necessarily reflect reforms undertaken, a number of participants suggested
that we have seen real progress in a number of areas, including: government encouragement of changing business
practices; improved corporate performance; maximization of shareholder value; recent increases in inward direct
investment; and structural reforms, particularly in the business sectors. Optimism was expressed about prospects
for a sustained economic recovery.
However, a number of issues still needed to be addressed. While structural reform is ongoing, the protracted pace
at which it is being undertaken was seen by some as a cause for concern. Worries persist over recent polls showing
a continued lack of consumer confidence among the Japanese public. Nonperforming loans were among the most serious
concerns. In the 1990s Japan retired upward of $570 billion in nonperforming loans, but the Japanese acknowledge
that there are still upward of $250 billion on the books at Japanese banks. There was continued concern over the
performance of the stock market. The need for political leadership (hurt by the constant turnover in leadership
at the highest levels of government, 13 prime ministers in the last 13 years) was a constant theme. Worries were
expressed on whether a political leader able to tackle Japan's problems would ever emerge. There was a view of
Japan's crisis as a "creeping" crisis, which is seen as harder to deal with than a major crisis. Disinterest
in the Japanese political process (particularly in urban areas) compounded this problem. Finally, the changing
demography of Japan, particularly the aging of the Japanese population, left cause for concern.
Unfortunately, Japan is not the only country in the region that needs
to further reform its economy. Many Asian countries are in the process
of reform, most as a result of their ongoing struggle to deal with the
ramifications of the economic crisis. However, in comparing Japan's
difficulties to those in other Asian countries it was suggested that
Japan's are different, because its economy is now fully mature and has
the added pressure of dealing with such issues as a declining birthrate
and an aging society.
Reforms Undertaken and Ongoing
When discussing economic reform in Japan it is helpful, if not necessary, to break the processes down into three
different areas: monetary, fiscal, and structural reform policies. Participants believed that most of the work
that had been done in Japan was in the realm of structural reform. Most believed that little has been done in the
area of monetary reform. Current efforts that have been undertaken have not worked due to a lack of demand for
business investment resulting from excess capacity in the economy.
Successful fiscal reform has also been lacking. While the Japanese
government has funneled trillions of dollars into the economy via eight
emergency spending packages over the past decade, most conferees
believed that the greater portion of this money was poorly targeted or
wrongly spent for political reasons. For example, largely unneeded
bridges, roads, and tunnels were just a few of the ways that we saw
pork barrel spending in Japan and the waste of such funds.
Structural reform,
however, has been much more wide-ranging than monetary or fiscal
reform. Participants viewed deregulation as improving Japan's economy:
in the areas of mobile communications, financial services and the
airline industry; in the area of foreign exchange liberalization; in
the breakup of sectoral regulation; in some blurring of the keiretsu
alliances; in increased mobility amongst executives; and in companies
moving toward more meritocratic promotion systems. The growth of the
Japanese economy does not yet reflect the impact of the reforms, but
there was widespread belief that they will serve as a basis for future
growth.
Finally, discussion moved to the state of the Japanese stock market. With stock prices in Japan recently dropping
to their lowest levels since 1984, stock market revitalization marked another area of economic concern that the
government needed to address. Japan needs to create an environment for individuals to put more money in the stock
markets. An emergency economic package, unveiled on March 9 in Tokyo, was seen by some conferees as a positive
step in this direction.
Demographic Change and the Future of Japan
Conferees believed that Japan was a country faced with numerous
demographic challenges in the years to come. Discussions focused on
Japan's decreasing birth rate, aging population, and the role of women
in the workforce. Concern over Japan's declining birth rate coincided
with a concern over Japan's future labor needs and the need to provide
social services for the aging population. According to current
estimates, if Japan's population continues to shrink at its current
rate over the next 50 years, Japan will have approximately 40 million
fewer people in 2050 than it has today. One way to address this
downward trend would be through tax incentives to have more than one
child. However, if this fails, Japan needs to open its labor market to
foreign laborers. In addition, there was concern about the ability of
the shrinking younger population to provide for the longer living older
population, both through government social safety nets and more
traditional familial responsibilities.
Most participants viewed the aging population as a cause for concern.
Different policy suggestions to alleviate ramifications from this
included the need to change Japan's immigration policies to free up the
labor market. However, others suggested the productivity and leadership
of people in their 50s and 60s was a positive rather than a negative,
believing that people in this age range could continue to be active
participants in the Japanese workforce. Furthermore, by successfully
dealing with the issue of a rapidly aging population now, Japan could
display regional and global leadership, since many other countries
would soon be faced with similar concerns.
In addition to the discussions on Japan's decreasing birth rate and
aging populations, there was a lively discussion about the role of
women in the Japanese workplace. The conferees overwhelmingly believed
that over the last ten to fifteen years women have made great inroads
into the Japanese workforce (there were no female Japanese conferees
present). Conference participants, including Japanese and foreign
businessmen and government officials, agreed that women have
increasingly been seen as a highly skilled, educated, and valued part
of the Japanese economy and social structure, with increasingly
prominent positions in the work world and with growing consumer impact.
The increase of women in the workforce further helped address labor
market pressures caused by the decrease in population. However, others
held the increase of women in the workforce responsible for lowering
the birthrate in Japan (as more women enter the workforce they are
having fewer and fewer children). While excited about the progress of
women in Japan, some participants expressed their concern about the
ability of the Japanese economic system to accommodate women in the
workforce, both culturally and socially. Culturally, as in many other
countries, women in Japan have many obstacles to overcome as they move
from primary caregiver to co-provider. Socially, the government must
address the gender specific needs of women ranging from provisions for
maternity leave to enforcing rules against sexual and salary
discrimination. While these topics were a focal point of discussion at
Williamsburg some worried that they were not much discussed in Japanese
political circles.
Japan's Role in the World and in the Region
A lengthy discussion about Japan's role in the region took place at Williamsburg. For starters, people questioned
whether Japan was a declining power and China a rising power, and if this would result in a Japan that chooses
or is forced by circumstance to play a secondary role in world affairs, much as we saw for Britain after World
War I. Most conferees agreed that both Japan and its neighbors have no clear idea of what they want Japan to be
and what they'd like Japan to do. Others suggested that taking leadership positions was a double-edged sword for
Japan, because when it has taken policy stances, it has often been criticized for doing so.
However, still others suggested that even if Japan does play a
secondary role in the traditional power areas of security and
economics, it could lead in less traditional areas. Japan could lead in
the global promotion of democracy and human rights. As most Asian
nations have problems with nonperforming loans, Japan could set an
example by developing successful ways to address this issue. Japan
could further lead the region (and other industrialized nations) in
addressing demographic concerns, as other countries will soon face
similar circumstances.
Japan's relations with its neighbors also served as the topic of an in-depth conference discussion. For example,
participants from Japan and the ASEAN nations focused on the importance of relations between the two. In addition
to the expressed gratitude of ASEAN nations for Japan's help in bringing these countries out of the financial crisis
with both bilateral and multilateral assistance, people of ASEAN nations understood and appreciated Japan's more
general role as the major provider of foreign direct investment in the region. Japan's role and impact in regional
organizations such as APEC were seen as positive and increasingly creative.
Perhaps Japan's most crucial relations are with the United States,
South Korea, and China. First, people were of two minds regarding
U.S.-Japan relations and the trip of Prime Minister Mori to see
President Bush during the conference proceedings. Some people believed
that relations were off to a promising start in the Bush administration
as the two leaders have already met. This at the very least showed the
importance the Bush administration attached to the relationship between
the United States and Japan. However, others believed that, with the
focus of the Bush-Mori agenda on economics instead of security issues,
the mission had already failed.
Second, while South Korea's relationship with Japan could be better,
both countries are believed to be sincere in their desire to move the
relationship forward. The dynamic leadership abilities of Kim Dae-jung
might make this possible. Third, participants summed up the important
issues between Japan and China by describing them as the many "T"
issues. There was Taiwan, the focal point of China's relations with any
other country, TMD and its ramifications for security and a possible
arms race in the region, Japan's textbooks and the possible revisionary
nature of new editions, territorial disputes, transparency and the need
to make positions and policies (between governments) more clearly
known, and the need for the building of greater trust between the two
countries. Japan's relations with Russia and the issue of territorial
disputes were only mentioned in passing.
SESSION 4
Political and Security Prospects
The General Security Situation in East Asia
Since the end of the cold war the world has been witness to numerous encouraging events that have contributed to peace and security in the region:
- Many state-to-state relations have been normalized (South Korea and China, the United States and Vietnam, North Korea and many European countries);
- Peace has returned to Cambodia;
- ASEAN has been expanded to include Vietnam, Cambodia, Laos, and Myanmar;
- The creation of the ASEAN Regional Forum (ARF), now with North Korean involvement;
- The establishment of the Korean Peninsula Energy Development Organization (KEDO);
- Track II and Track III dialogue expansion, particularly those including Chinese and North Korean delegations; and
- The Korean summit last year.
This
last issue may be of overwhelming importance to the overall security
situation in the region, as we can now begin to discuss how East Asian
security might look after the last vestige of the cold war is put to
rest. This, in turn, led to questions about the future status of the
alliance system in the region and the possible move to greater
multilateral security cooperation in East Asia generally, and Northeast
Asia, in particular.
The U.S.-Japan Relationship
In Japan and through much of Southeast Asia the U.S.-Japan relationship
is seen as indispensable to regional security. That said, there was
some concern among participants that the United States might turn away
from Asia, particularly if the U.S. economy continues to weaken. There
was a perceived need for the U.S. to consider the peace of the region
as in its own national security interests. However, even for those that
looked positively toward the role of the U.S.-Japan security alliance
there was cause for concern. For example, it has become increasingly
important to address the sentiments of the Okinawan people, whose best
interests have been sacrificed for the sake of national security. This
was evidenced by the disproportionate presence of U.S. forces (1
percent of the Japanese population hosting 75 percent of the U.S.
forces stationed in Japan) in Okinawa.
In this panel, the issue that received the most discussion, however, revolved around the question of a possible
amendment to Article 9 of the Japanese Constitution and whether this would be a positive contribution to regional
peace and stability. Article 9 states that aspiring sincerely to an international peace based on justice and order,
the Japanese people forever renounce war as a sovereign right of the nation and the threat or use of force as a
means of settling international disputes. In order to accomplish this aim, land, sea, and air forces, as well as
other war potential, will never be maintained and the right of belligerency of the state will not be recognized.
As such, an amendment to this article would allow Japan to field offensive forces, both conventional and nuclear.
Some participants from Southeast Asian nations said this would be a disaster. Memories of Japanese aggression in
the Pacific War were still vivid, and a militarized Japan could lead to a devastating arms race in the region.
Others believed that the impact would be minimal and that Japan had a right to become a normal country. Instead,
these conferees argued that the concern among many countries in the region now focuses on China. However, it was
further suggested that the entire issue of amending Article 9 was academic, as there existed no public support
in Japan for the requisite constitutional change. The original question stemmed from perceived U.S. desires for
a more assertive Japan. This resulted in statements suggesting that the relationship between Japan and the U.S.
is unequal, and, in fact, the U.S. was not looking to share leadership in the region, rather, it was simply looking
to Japan to share the monetary costs of leadership in the region. If this is the case, the onus rests with the
U.S. to share real leadership capacity with Japan.
The Korean Peninsula
Is the cold war on the Korean Peninsula coming to an end? Are we seeing the first steps toward reunification? While
most participants would not go so far as to suggest that reunification was imminent, they were overwhelmingly of
the mind that over the last few years, and more specifically over the last year, we have seen major movements in
the right direction on the Korean Peninsula. These include:
- The sunshine policy spearheaded by President Kim Dae-jung;
- Last year's summit between the leaders of North and South Korea;
- The subsequent family reunions after almost 50 years of separation;
- The normalization of relations between the DPRK and a growing
number
of countries; - The efforts by China to help secure peace on the peninsula;
- A seemingly increased interest in North Korea to learn about economic reform; and
- A desire in North Korea to work with other countries to develop their economy.
While, these efforts have moved the relationship in directions unforeseen just a few years ago, there are still many obstacles to be overcome:
- The perception by the new U.S. administration of North Korea as an enemy and a threat to U.S. national security, as the administration has often cited North Korea as one of the reasons why the U.S. needs to protect itself with the NMD and TMD;
- A renewed North Korean demand for the withdrawal of U.S. forces from South Korea; and
- The need to address the divergence between North Korea's domestic and external policies, in which domestic policies are still tightly regulated and opaque, while external policies are becoming increasingly liberal.
While most believed that the situation on the Korean Peninsula
and peace in the region is the work of the two Koreas and the powers that be (United States, China, Japan, and
Russia), there were those that separated the two issues. These participants believed that Korean reunification
needs to be handled only by North and South Korea, while peace in the region was the work of all countries.
Southeast Asia
The discussion of Southeast Asia focused largely on the situation in
Indonesia and the role of ASEAN in the region, but also included brief
discussions on the role of Australia, New Zealand, and Islam. The
discussion on Indonesia stressed that despite what one sees in the
popular press, Indonesia is not on the edge of collapse. That said,
there is a need to understand better the size, diversity, and vast
population of Indonesia in order to comprehend its political, social,
and economic situation. For example, conferees viewed Indonesia as a
pluralistic society, which over the last 30 years has been entirely
focused on economic development at the expense of social and political
development. Indonesia's transition to democracy will be long and
difficult. In the past, Indonesia has dealt with its internal cohesion
problems by sending in troops. This culture of violence needs to be
changed. There was a call to train and supply Indonesia's security
forces for the protection of the populace, something that the United
States needs to address, as the U.S. had cut off ties to Indonesia's
National Defense Forces (TNI).
As the most populous and diverse country in Southeast Asia, the
importance of Indonesia and its stability was seen as not only vital to
the unity of the Indonesian state but its leadership was also seen as
crucial to the successful functioning of ASEAN. ASEAN was largely
viewed as an over-30-years success story. It has survived the 1997-98
economic crisis and was integrating its economies through AFTA. At the
same time, it was driving important regional vehicles such as ARF and
ASEAN + 3.
There was also some discussion of the role of Australia and New Zealand in East Asia. While acknowledging that
they might not be Asian countries, it was also recognized that their interests and fortunes were inextricably linked
to those of East Asia.
Finally, the role of Islam was brought to bear on the discussion. One participant suggested that there was a growing
role for Islam in the politics of Southeast Asia, particularly in Malaysia. However, unlike exclusionary forms
of Islam found elsewhere, this form of Islam was suggested to be inclusive, and thus not a threat to democracy
or capitalism in the Asia-Pacific region. It was therefore important for the Williamsburg Conference to engage
the region's Muslim intellectuals.
The Future of Multilateral Institutions
Much of the discussion in this area focused on ASEAN, ARF, and ASEAN + 3. Participants agreed that the ARF should
be nurtured and encouraged to make the transition from confidence building to preventive diplomacy. Participants
also felt that the ASEAN + 3 process could contribute to peace in East Asia.
Participants
AUSTRALIA
Hugh M. Morgan,
Chief Executive Officer, WMC Limited
Richard A. Woolcott,
Founding Director, Asia Society, AustralAsia Center, Former Secretary for Foreign Affairs and Trade
CANADA
Paul M. Evans,
Director, Canada Asia Studies, Institute of Asian Research,
University of British Columbia
CHINA
Ding Yifan,
Deputy Director, Institute of World Development, Development Research Center of the State Council
Yang Bojiang,
Professor and Deputy Director, Northeast Asia Division, China Institute of Contemporary International Relations
DEMOCRATIC PEOPLE'S REPUBLIC OF KOREA
Jang Chang Chon,
Director-General, Department of American Affairs, Ministry of Foreign Affairs
HONG KONG
Ronnie Chan,
Chairman, Hang Lung Group of Hong Kong
Christine Loh,
Chief Executive Officer, Civic Exchange
INDIA
N. N. Vohra,
Director, India International Centre
INDONESIA
Ali Alatas,
Former Minister of Foreign Affairs, Counsel, Makarim & Taira. S.
Dewi Fortuna Anwar,
Associate Director for Research, The Habibie Center
Rizal Sukma,
Director of Studies, Centre for Strategic & International Studies
JAPAN
Tatsuo Arima,
The Special Advisor, Mitsubishi Corporation, The Representative of the Government of Japan, Ministry of Foreign
Affairs
Kazutoshi Hasegawa,
Senior Advisor, ITOCHU Corporation
Kiichiro Hasegawa,
President & CEO, Proudfoot (Japan) Ltd.
Hiroshi Hashimoto,
Ambassador Extraordinary Plenipotentiary in Charge of Okinawan Affairs, The Representative of the Government of
Japan
Toru Hashimoto,
Chairman of the Board of Directors, The Fuji Bank, Limited
Noboru Hatakeyama,
Chairman & CEO, Japan External Trade Organization
Mikio Higa, President,
Busena Resort Corporation
Akira Kojima,
Managing Director, Chief Editorial Page Editor, Nihon Keizai Shimbun, Inc.
Minoru Murofushi,
Chairman, ITOCHU Corporation
Toshiaki Ogasawara,
Chairman & Publisher, The Japan Times
Yoshio Okawara,
President, Institute for International Policy Studies
Keiji Tachikawa,
President & CEO, NTT DoCoMo, Inc.
Nobuo Tanaka,
Executive Director, Research Institute of Economy, Trade & Industry
MALAYSIA
Mahfuz Omar,
Member of Parliament, Chief of Youth, Islamic Party of Malaysia
Karim Raslan,
Partner, Raslan Loong
NEW ZEALAND
Philip Burdon,
Chairman, Asia 2000 Foundation of New Zealand
Phillip Gibson,
Ambassador of New Zealand to Japan, New Zealand Embassy
Tim Groser,
Chief Executive Officer, Asia 2000 Foundation of New Zealand
PHILIPPINES
Chito B. Salazar,
President and Chief Operating Officer, Systems Technology Institute, Inc.
Rodolfo C. Severino, Jr., Secretary-General of ASEAN, Association of Southeast Asian Nations, The ASEAN
Secretariat
Alfonso T. Yuchengco,
Chairman, Yuchengco Group of Companies
REPUBLIC OF KOREA
Han Seung-soo,
Member, Korean National Assembly, Committee on Unification, Foreign Affairs and Trade, Former Deputy Prime Minister
and Minister of Finance
Lee Hong-Koo,
Chairman, Seoul Forum for International Affairs, Former Ambassador of Korea to the U.S.
SINGAPORE
Arun Mahizhnan,
Deputy Director, Institute of Policy Studies
Tommy T. B. Koh,
Ambassador-at-Large, Ministry of Foreign Affairs
TAIWAN
Man-Jung Mignon Chan,
Director General, Pacific Economic Cooperation Council International Secretariat
Yun-han Chu,
Vice President, Chiang Ching-Kuo Foundation for International Scholarly Exchange
Douglas Tong Hsu,
Chairman & CEO, Far Eastern Group
THAILAND
Pote Videt,
Managing Director, Credit Suisse First Boston (Singapore) Limited
UNITED STATES
Desaix Anderson,
Executive Director, The Korean Peninsula Energy Development Organization (KEDO)
Ronald J. Anderson,
Senior Vice President & Chairman, AIG Companies in Japan & Korea
Harry G. Barnes, Jr.,
Senior Advisor & Consultant, Asia Society
Marshall M. Bouton,
Executive Vice President, Asia Society
Carla A. Hills,
Chairman & CEO, Hills & Company
Catherine L. Mann,
Senior Fellow, Institute for International Economics
Norman J. Ornstein,
Resident Scholar, American Enterprise Institute for Public Policy Research
Nicholas Platt,
President, Asia Society
Stanley O. Roth,
Former Assistant Secretary of State for East Asia and Pacific Affairs
OBSERVERS
Timothy Betts,
U.S. Consul General of Okinawa
Justin P. Brown,
International Researcher, Information & Analysis Department,
Research & Information Group, ITOCHU Corporation
Lucy Cummings,
Program Associate, Asia Society Hong Kong Center
Masayuki Endo,
President's Office, NTT DoCoMo, Inc.
Hwang Thae Hyok,
Interpreter, Ministry of Foreign Affairs, DPRK
Shinji Ishii,
Assistant to the Chairman, ITOCHU Corporation
Jang Song Il,
Researcher, Ministry of Foreign Affairs, DPRK
Jong Thae Yang,
Researcher, Ministry of Foreign Affairs, DPRK
Mikio Kato,
Executive Director, The International House of Japan
Christopher J. Lafleur,
Minister, U.S. Embassy, Tokyo
Katherine McHugh Lichliter, Director, Asian Affairs, Salzburg Seminar
Chris Livaccari,
Public Affairs Officer, U.S. Consulate General in Naha
Keiichi Ozawa,
Special Assistant to the Chairman, The Fuji Bank, Ltd.
Sheila Platt,
Director of External Relations, Community and Family Services International
Robert W. Radtke,
Vice President, Policy & Business Programs, Asia Society
Olin Robinson,
President, Salzburg Seminar
Kotaro Shiomi,
General Manager, Information & Analysis Department, Research & Information Group, ITOCHU Corporation
Mary Lee Turner,
Director, Asia Society Hong Kong Center
RAPPORTEUR
Michael G. Kulma,
Program Officer, Policy and Business Programs, Asia Society