Events during the last twelve months since November 1974 have, if anything, convinced even most sceptics of the undeniable seriousness of the security situation in Peninsular Malaysia. Burgeoning, as it has, in the wake of the historic victories of the communist forces of Vietnam and Cambodia, the terrorist activities of the Communist Party of Malaya (CPM) and the rising toll of security forces personnel have indeed created a sense of concerned anticipation among outside observers. It is, of course, only too tempting to become somewhat alarmed about the developments in Malaysia in view of the disappointingly phlegmatic reaction of the other Southeast Asian states to the communist takeover of Vietnam, Cambodia and Laos and, for the prophets of doom, the equally disheartening way in which the much acclaimed domino theory appears to be fizzling out. Moreover, the grim forebodings of some Malaysiawatchers ever since the tragic days of May 1969 might understandably find a new lease of life with the revival of the undisguised racial connotations of the CPM's terrorist and propaganda campaign against the ruling Barisan Nasional (National Front) Government of Tun Abdul Razak.

New Trends in Communist Strategy

In the heat of the moment, especially after several sensational attacks such as the blowing up of the National Monument in August, the grenade-throwing incident at the Police Field Force Brigade Headquarters in Kuala Lumpur in October, and the daylight assassination of the Perak Chief Police Officer in Ipoh in November, it is easily forgotten that the authorities had, in fact, warned almost a year ago of the imminence of an escalation in communist terrorist activities following the disclosure of the three-way split within the CPM. The rationale for this anticipated course of events, as pointed out in the background paper, was that each of the rival factions would try and outdo the others in its revolutionary fervour by stepping up its terrorist tactics. The evidence, so far, certainly indicates the exceptionally virulent policy of the CPM (Marxist-Leninist) faction. Official reports of the Perak Chief Police Officer's assassination specially mentioned that pamphlets of the CPM (M-L) were found at the scene of the incident, while at least two clashes between the security forces and the communists in August in the border areas of Kroh in Kedah and Betong in Thailand were reported to have involved the CPM (M-L) elements.

The main variable of Southeast Asian politics in 1976 was the emergence and institutionalization of the communist governments in Indochina. International politics in the region was primarily responses arising from this fact, involving mutual assessment, diplomatic fencing and a series of attempts by the various governments adhering to basically two ideologically contradictory political systems to formulate a working relationship. For the noncommunist governments of Indonesia, Malaysia, the Philippines, Singapore and Thailand, even the anticipation of an eventual communist takeover in South Vietnam did not prepare them for the swiftness and the completeness of the communist victories throughout 1975. The Cambodian proclamation of a revolutionary government on 17 April was followed by the entry of North Vietnamese troops into Saigon on 30 April and, only a few months later, a bloodless transition of power took place within the coalition government in Laos, leaving the Pathet Lao in total control of the country by the end of November. Domestic politics in the noncommunist states was not solely a function of the external threat of communism, but political issues were recognizably forced or attenuated by the considerations of internal subversion, the weakening of the political will of leaderships and the need to build up national resilience, particularly in states which are the nearest neighbours of Indochina. In the new communist states the concern, domestically, was to create an administrative infrastructure to facilitate economic development and reconstruction and the protection of their territorial borders and newly gained sovereignty.

For the student of politics interested in unravelling the meaning behind the packed events and developments in the area a year after the establishment of the three communist regimes in Southeast Asia, it may be efficient to utilize the theme of the confrontation of contradictions, for without any question the noncommunist governments in the region have to deal with the presence of a fundamentally different, if not opposed, political force — communist governments which have emerged as a regional power very suddenly. This article will explore the handling of this contradiction from the stand point of the noncommunist states of ASEAN and that of communist Vietnam, Laos and Cambodia. It proposes to examine first, the perceptions of the ASEAN states of the political situation and their policies; secondly, the perceptions, priorities and policies of the communist states; and thirdly, the dialogue and interaction between the ASEAN and the lndochinese states.

Introduction

Following on from the tragic events of September 1999, East Timor will shortly become the world's newest nation. Presumably, in time it will also become a member of the Association of Southeast Asian Nations (ASEAN). As it charts its way forward, one of the key challenges it faces will be to define its international economic orientation. Indonesia and Australia will always be East Timor's major trading partners and diplomatic focus, in addition to its membership of the Portuguese-speaking world.

However, there is a broader question of whether its world-view, and its political, economic and social institutions, will be predominantly “Southeast Asian” or “South Pacific”. This is meant not simply in a geographic sense, since a case could be made for the fact that it belongs to either region. Nor is it addressing the issue of whether an independent East Timor will join both ASEAN and the Pacific Islands Forum (or whether it might even be forced to choose between them). Rather, it is the more fundamental question of whether its economic performance will more closely resemble that of its neighbours to its northwest or east. That is, will it be an outward-looking, growing and increasingly prosperous country, or a mendicant, aiddependent state, with a bloated public sector and stagnant living standards. The latter, unfortunately, characterizes many of the Pacific Islands.

In many respects, after the immediate task of rehabilitation is completed, East Timor will resemble a typical Pacific Island economy, albeit at the poorest end of the spectrum. It will be a large aid recipient, dependent also on remittances. Its institutions are weak, and its human capital resources rather limited. It is small, both in a geographic and a demographic sense, and rather isolated.

With its history of neglect and oppression, it is difficult to be optimistic about the future. The challenges might appear insuperable. Much of its physical infrastructure is shattered, while the supply of public utilities is most inadequate.

More than 80,000 of its people are still located in squalid refugee camps across the border in West Timor, and in other parts of Indonesia. It does not possess a constitution, a political system, or a functioning bureaucracy.

Ever since Indonesia's “New Order” regime under President Soeharto seized authority from Sukarno's “Old Order” in 1966, political scientists have attempted with varying degrees of objectivity and involvement to characterize the elements of policy and control that have allowed an outwardly authoritarian military oligarchy to maintain and consolidate power for nearly two decades. Thousands of academic and journalistic words have been written seeking to explain the political dynamics of Soeharto's rule. For example, it is tempting to fix it squarely in its indigenous cultural setting: Soeharto as a Javanese king and Indonesia as his kingdom. Ben Anderson saw the major tendencies of the modern state replicating the colonial state. Some western analysts have applied the bureaucratic polity paradigm as explanatory. Donald Emmerson has identified growing “bureaucratic pluralism” as the key feature of the polity. Indonesian social scientists themselves are not averse to playing the model game. In a trenchant structural criticism of the New Order, Gajah Mada University's Dr Mohtar Mas'oed reacted to 1984's contentious draft legislation (discussed below) that would further consolidate the New Order as the regime moves towards a possible 1988 leadership watershed. Dr Mohtar described Indonesia as a “hegemonic-bureaucratic-corporatist” state: that is, it is institutionally led by the military which co-operates with civilian technocrats who are supported by national entrepreneurs who in turn join forces with the international business community. Policy making is done in a bureaucratictechnocratic framework avoiding prolonged bargaining.

To the degree that Indonesian leaders are even cognizant of the esoteric analyses of their political system, often they must seem in a “real world” sense irrelevant to the task of unity in a plural society in the context of rapid economic development with its attendant social dislocations. In a realpolitik sense this requires in the last analysis coercive controls to back up authoritative decision making. Indonesian leaders insist, however, on the uniqueness of their experience in that they are giving expression to an identity defined by the Pancasila — the Five Principles of the Indonesian State: belief in one God, humanitarianism, national unity, consensual democracy, and social justice. First enunciated in 1945 as the basis for unity in the prospective independent state, the vague and general universal values embodied in the Pancasila became the constitutional basis for unity in a society characterized by plural ethnic and religious groups.

UMNO (United Malays National Organisation) has occupied a unique position and has played a crucial role in the growth of the post-war Malaysian social system, particularly in the political sphere. Since its formation in 1946, it has been the single most influential institution to have shaped not only the political contours but also the overall social terrain in Malaysia. Since independence in 1957, it has remained the backbone of the Malaysian Government until today.

Central to any discussion of UMNO is its leadership. This is unavoidable because whatever happens within the leadership, particularly at the top among its national leaders — whether there is consensus or conflict amongst them — determines to a large extent UMNO's internal stability and hence to a great extent that of the country too. This was amply demonstrated, for example, when a leadership crisis which occurred in UMNO in the mid-1970s led to a series of other crises within the National Front coalition with the political situation in Malaysia becoming very tense during that period. At that time, UMNO was experiencing a “changing of guards” at the top initiated by the late Tun Abdul Razak in the early 1970s after he took over the premiership and the UMNO presidency from Tunku Abdul Rahman. It was under him that the now famous New Economic Policy (NEP), aimed mainly at “eradicating poverty” and “restructuring society” within Malaysia, was introduced. This policy clearly favours the Malays and other indigenous groups collectively known as bumiputera (literally, “son of the soil”), especially in the economic and educational spheres. As Razak saw it then, the successful implementation of this pro-Malay affirmative action strategy could only be carried out by the better-educated and technocratically oriented leaders. Therefore, the 1974 general election witnessed the rise of an élite group of Tun Razak's protégés, mostly hand-picked by him, some of whom became politicians and Cabinet ministers overnight. Amongst them were Dr Mahathir Mohamad and Musa Hitam, both expelled from UMNO by Tunku Abdul Rahman for “insubordination” after the 1969 general election, and Tengku Razaleigh, considered by many then as a “Malay economic genius”.

This move by Tun Razak was resisted by the pimpinan lama, or “old leadership”, within UMNO and subsequently a crisis erupted within UMNO's national leadership which affected the grass-roots leadership as well.

On 25 March 1979, Jean-Pierre Gallois of the Agence France Presse (AFP), the first Western journalist admitted to Kampuchea after the overthrow of the Pol Pot regime, filed this report from Phnom Penh:

About one and a half million people, of a population of seven million or more, had perished in the Pol Pot period from 1975 to early 1979, including up to 500,000 deaths by execution and the rest from starvation, disease, and overwork.

Downfall of the Military Régime

In September 1973 one hundred Thai people from many walks of life — university students, farmers, labourers, ex-members of the dissolved elected Parliament, artists, writers, government officials, medical doctors, and professors — signed their names to endorse a statement petitioning the military government for a democratic constitution. On 6 October, some members of this group went about distributing leaflets and copies of their demand for a democratic constitution at a few public spots. Thirteen of them were immediately arrested and charged with illegally holding a political assembly of more than five persons, committing communist acts, and insurrection. On Tuesday 9 October, the second day of the final examinations at Thammasat University, thousands of Thammasat University students walked out of their examinations and forced the university to be closed. They began a vigorous campaign against the military régime and demanded an immediate and unconditional release of all the arrested members of the constitutionalist group, which included students and one professor from Thammasat University. They staged a sit-in on the Thammasat University campus for five consecutive days and nights, taking turns to make continuous anti-government speeches. During the rally, they were joined by nearly 100,000 high school, vocational school, and university students from Bangkok and many provinces. Arriving by bus or on foot, they came equipped with national flags, loudspeakers, placards, and leaflets, some of which they had distributed along the way.

At Thammasat, students were organized into teams of tactical planners, donation collectors, food distributors, speech makers, negotiators, militiamen, as well as bottlebomb makers. At noon on the fourth day of the rally, the National Student Center of Thailand (NSCT), acting on behalf of all students, served an ultimatum to the military government to release the prisoners unconditionally and proclaim a democratic constitution within six months. The ultimatum required that the military government act within twenty-four hours; otherwise, the students would take ultimate action. At 7.00 p.m. the same evening, the government announced that it would release the prisoners on bail and agreed to have a new constitution ready within one year, but the students refused to accept the government's move and continued demonstrating at Thammasat University through the fourth night.

CONTEXTS FOR CHANGE

Nineteen eighty-eight marks a system break in Burma's modern history. To understand the significance of the events of the year we should set them in two different contexts. One is the context of states with command economies and Leninist parties which have undertaken perestroika with or without glasnost. The polar reform cases include the Chinese model, with economic liberalization starting in agriculture and politics being restrained after an initial opening, and the Soviet model, with economic liberalization attempted across the board and political openness encouraged as a spur to the perestroika process. These models offer only a partial context for our understanding of Burma since in both instances the movement can be characterized as reform rather than revolution: while there are significant redistributions of power and authority among state institutions and between state and society, and there are changes in external relations as well, still the basic legitimacy of the system remains in place, élite replacement is moderate, and the level of violence and coercion is low.

The other context is Burma's own cycles of reform and revolution during the last half century as shown below. (The numerologically inclined will note a periodicity of about a dozen years — actually 13.67 plus or minus 0.83 years.)

THE POLITY IN 1988

While the operative effects of any changes in direction for the economy during 1988 were obscure, political changes verged on revolution. The level of violence was high, the legitimacy of the regime collapsed, and the ruling élite, while maintaining its core institution, the army, went through a complete change of personnel at the top. Before analysing these fundamental changes, the chronological line of action will first be set out.

Chronology of the Crisis

The system break of 1988 began in March with a tempest in a teashop which grew into a full-scale student riot and brought on full-scale police repression. In contrast to the previous fall's student protests over demonetization, this series of riots spread to downtown Rangoon. The stage for public protest had been set by spiralling inflation and a shortage of fuel for transport, which left some areas of the country, and particularly the cities, short of rice.

On 5 October 1981, Indonesia's Armed Forces, ABRI (Angkatan Bersenjata Republik Indonesia), celebrated its thirtysixth anniversary with a massive display of military pomp and muscle. At the Cilegon naval centre, on the shores of West Java, in front of an audience of thousands, 20,000 members of ABRI took part in a war-like exercise that featured a fly-past of fifty planes including American built F-5E “Tigers”, A-4 “Skyhawks”, and OV-10 “Broncoes”, and a naval parade of thirtyseven vessels showcasing Indonesia's two NATO class submarines and the French Exocet surface-to-surface missile systems of the Navy's new corvettes and fast-attack craft. Combat troops stormed ashore in a mock amphibious landing, putting their newly acquired Western-made armour on the beach. Similar, albeit more modest, demonstrations of Indonesia's military hardware took place at Medan, North Sumatra, and Ujung Pandang in South Sulawesi.

Although at one level of analysis obviously a show of force in a troubled regional international environment, this year's ABRI display again illuminates the central position that the Armed Forces occupy in Indonesia's national life. In the words of Defence Minister and ABRI's Commander, General Mohammad Jusuf, Armed Forces Day was meant to underline ABRI's role in “strengthening national resilience and enhancing the unity of the country and people” (Straits Times, 5 October 1981). From the point of view of ABRI's leadership, this is a critical task in an atmosphere in which the traditional cleavages of race, ethnicity, and religion are exacerbated by the social and political antagonisms engendered by uneven patterns of economic change, perceived inequalities in income distribution, and corruption — in 1981 heated up by the run-up to the 1982 general elections to be followed by the presidential selection process in 1983.

The military portion of “national resilience” is conceptualized in the formulations of the People's Defence System, HANKAMRATA (Pertahanan Keamanan Rakyat Semesta), which seeks to unite functionally the wider society with the Armed Forces in the territorial defence of the wawasan nusantara — the indivisible unity of the land and sea elements of the archipelago. The doctrine explicitly relates the economic, political, social, and psychological factors of national development to the tasks of defence.

The year 2011 was one of change for Myanmar. It was the year of the country's administration becoming “civil” in the eyes of many in the country and the world at large. A civilian government, albeit with a military past, was sworn in on 30 March 2011. President Thein Sein's inaugural speech to the parliament, outlining priorities for economic renewal, sustainable development, poverty alleviation, human rights and good governance, and recognizing the plight of ethnic minorities involved in armed conflict, was initially dismissed by many as “just words”.

Six months later, however, observers within and outside the country were recognizing the steps outlined in this inaugural speech when changes started showing in Myanmar's political and economic scene. These changes include the freedom of movement (and speech) of Nobel laureate Aung San Suu Kyi, the loosened restrictions on the media, a law allowing workers the right to strike, amnesties for prisoners (including political prisoners), and steps taken towards economic reform. The pace set by the government on this road to reform seemed almost exhilarating to citizens and observers used to setbacks and stonewalling from the authorities in the past. The pace continued to surprise as 2011 progressed, peaking with the National League for Democracy (NLD) rejoining the political process, the agreement by the Association of Southeast Asian Nations (ASEAN) to Myanmar's bid to be the ASEAN Chair in 2014, and the landmark visit of U.S. Secretary of State Hillary Clinton to the country.

Indonesian Foreign Minister Marty Natalegawa has described the reform process in Myanmar as irreversible. Optimists and critics share concerns on whether the “flickers of progress” described by U.S. President Obama will develop into a steady flame. Having cited the reforms as a key reason for its decision to give Myanmar the ASEAN chair for 2014, ASEAN, too, has much at stake.

Reviewing developments in Myanmar in 2011, the picture that emerges shows the beginning of a convergence of interests, the first in decades, between the militarybacked government, the polity in Myanmar, the forces for democracy symbolized by Aung San Suu Kyi, and the international community.

The Year in Review

The year 2011 saw a newly elected “civilianized” government in Myanmar. It had come to power in what many around the world had largely decried as sham elections in November 2010.

The above remarks were made by the then Minister of State for Trade and Industry, and head of the government-appointed Economic Committee, in connection with a sharp downturn in the Singapore economy. They reflected the government's perception of the acute precariousness of the city-state's economic position. The rate of economic growth declined from 8.2 per cent in 1984 to −1.7 per cent in 1985. Domestic demand declined by 3 per cent and trade also contracted by 4 per cent during the year. A total of 90,000 jobs were lost and the unemployment rate had risen to 6 per cent at the end of the year. Observers also expect that the depressed economic conditions would continue over the next two to three years.

In the course of 1985, the government introduced several measures in an attempt to steer the economy back on to its original course. That course had been set earlier when the government announced its strategy for economic re-structuring in 1979. That strategy was intended to promote a general upgrading of the economy, so as to move out of low-wage, labour-intensive activities and into skill- and higher technologyintensive activities in manufacturing and services. It was believed that the latter activities would be capable of sustaining higher wages for the work-force, and would also be less vulnerable to trade competition and protectionist restrictions. Consequently, it was believed that Singapore would be less likely to encounter economic difficulties.

Why then did the strategy “fail” to avoid the present economic difficulties? Was it due to some unforeseen and unavoidable circumstances, or could the cause be attributed to some inherent aspects of the strategy itself? What are the prospects for a viable and sustained economic recovery?

China's startling and still recent emergence from isolation into world diplomacy has left other countries rather breathless. There seems to be a high degree of coincidence between several developments that have contributed to this unexpected change in policy. Firstly, there was the ending of the turmoil of the Cultural Revolution in China itself, and a return to greater normality in internal and external policies. Secondly, there was the strenuous attempt of the Nixon Administration to end American involvement in Vietnam and place U.S. policy in Asia, including China, on a new footing. Thirdly, there was the inevitable but much delayed admission of China to the United Nations in September 1971, where she took her place as a permanent member of the Security Council. These three developments, occurring in rapid succession, undoubtedly heightened the impact of the arrival of China on the world stage. In the subsequent period, other countries have been engaged in readjusting, in their several ways, to the new circumstances.

By far the most important of these developments, in terms of its implications for the future shape of international relations and the strategic balance in Southeast Asia, has been the rapprochement between Peking and Washington. This factor alone has contributed immensely to the new and alarming (or exciting, depending on the point of view) fluidity in Southeast Asian affairs today. The old guidelines and the old alliances are rapidly being replaced by as yet largely untried experiments in regional diplomacy. New assessments are still being made of what really constitutes the national interest, based on new analyses of Chinese and American intentions in the area. China's role in the United Nations and her own internal stability are still relevant factors to be taken into consideration, but when it comes to a realistic political appraisal, these things pale beside the American withdrawal from the Asian mainland and the consequent looming of China's economic and military potential. No longer is the dividing line simply between two opponents, communist and non-communist. There is the now familiar element of Sino-Soviet rivalry, and the chrysalis of Japanese power, to be used in a way that may not continue to be confined simply to the economic sphere.

Introduction

The region's recovery from the destabilizing effects of the 1997/98 Asian economic/ financial crisis had been patchy, and although by 2002 most gross domestic product (GDP) levels had edged back to pre-crisis levels, per capita incomes had not and unemployment was on the rise. The 3.5 per cent growth in Indonesia was achieved over a low baseline. Its path towards economic restructuring, sustained economic recovery, and political stability remained tortuous.

On the road to economic recovery two developments set back confidence and fuelled uncertainties. The Al-Qaeda terrorist attacks on the United States on 11 September 2001 (commonly referred to as “9/11”) opened a new phase of international insecurity. How the United States would pursue the war against global terrorism and with what impacts on the Muslim world fuelled uncertainty. The more open regional economies focussed on the consequences for global travel, business confidence, and the international economy. In retrospect neither the United States nor the most open regional economy, Singapore, was too seriously affected. Within a year both economies had rebounded with Singapore in the third quarter of 2002 seemingly headed for a 4 per cent growth. In 2002 the Malaysian economy grew by 4.2 per cent while the fastest regional growth rate of 7 per cent was recorded by Vietnam. However, the terrorist bombings in Bali on 12 October 2002, which killed 202 people, many of them foreign tourists including 88 Australians, dampened expectations of a rebound as Southeast Asia initially acquired an undifferentiated image in the minds of foreign investors and in travel advisories as an insecure region.

American concerns that parts of maritime Southeast Asia with their local history of Muslim militancy and rebellion against central authority were vulnerable to penetration by the Al-Qaeda network in search of a “second front” resurfaced following the Afghanistan campaign which commenced in October 2001 and resulted subsequently in the destruction of the Taliban regime and disruption of the Al- Qaeda network. The year 2002 began with regional anticipation of the political fallout of the war against international terrorism and ended with nervous tension over the imminence of war in Iraq.

The year 2008 will be remembered as a watershed for the Malaysian political system and for the forward trajectory of Malaysian democracy. This election year saw a refurbished coalition of oppositional political forces, the People's Pact (Pakatan Rakyat), deprive the ruling National Front (Barisan Nasional) coalition of its twothirds majority of seats in Parliament. Even more significantly, four state governments fell, making it a total of five governments in Opposition hands. I suggest here that this development has created a de facto two-party system for a maturing Malaysian democracy. Economically, Malaysians will be facing a severe downturn though not a technical recession. The year also saw the denouement of a leadership crisis within the United Malays National Organisation (UMNO) leading ultimately to the anticipated departure from the political stage in March 2009 of the fifth Malaysian Prime Minister Abdullah Ahmad Badawi. The political terrain remains fraught with pitfalls for premier-in-waiting Najib Abdul Razak and for Opposition Leader, Anwar Ibrahim, who awaits his sodomy trial.

The Malaysian Prime Minister Abdullah Badawi already had more than his fair share of a baggage of problems to deal with even before his tenure headed into 2008. Let me briefly recollect. After 25 November 2007, five HINDRAF lawyers remained in detention under the draconian ISA, while one was at large. The V.K. Lingam video exposé in September 2007 and the Royal Commission inquiry into it in January 2008 remained much in the public consciousness, so too the Altantuya murder trial which had dragged on from 2007. Inter-faith fractures which had surfaced since 2005 remained largely unresolved and so too internal squabbles within the ruling coalition parties. Most sensationally, the MCA Minister for Health had to resign because of the circulation of a sex video by his detractors. Finally, the economy was not in great shape with petrol prices and inflation spiking and Mahathir still sniping from the sidelines. Yet speculation was rife by early 2008 that an early election would be called presumably to salvage the premier's beleaguered situation, more than one year in advance of the mandatory five years. In a CNN interview Abdullah did admit that a fresh mandate was necessary for him to address a host of new issues and to make good his unfulfilled anti-corruption agenda.

During the years which saw maximum Chinese withdrawal from international affairs together with maximum United States military commitment to Southeast Asia, the years 1965–71, there was very little journalistic or scholarly interest in the Chinese communities living in Southeast Asia. It was not until after June 1971, when President Nixon announced that he was going to visit Peking, that anxious questions once more began to be regularly asked about the future role of the “Overseas Chinese”. All the fears of the 1950s concerning these Chinese were quickly revived and a large variety of questions were asked. Most of them centred on two related problems with wide ramifications. Firstly, will the Chinese in Southeast Asia be the targets of subversion? Secondly, will they be encouraged to resist assimilation and reassert their Chineseness?

On both these, opinions were divided. There were many who felt strongly that the diplomatic reemergence of China necessarily meant trouble for Southeast Asian countries with Chinese minorities, although some concentrated more on the consequences of American military withdrawal than on what the Chinese planned to do. Others were confident that the time for such fears was over. Most of the Chinese had settled down and made their peace with the new nationalist governments that had emerged since 1945. Most of them were economically well-off and too committed to the more or less laissez faire economics of the region to want to destroy them. Where there was danger, it would come from the growing discontent among the indigenous poor and the political awakening of the indigenous young. Thus one view concentrates on the intentions of China and the other on the effectiveness of Southeast Asian governments. There should also be a third which looks more closely at the reactions of the local Chinese. Although no great threat need be expected from them, there will be changes among them in some specific ways, for example, regarding citizenship among those who have been nationals of the Republic of China in Taiwan and regarding the new perspectives on issues of loyalty and assimilation. These changes will depend on the current policies of Southeast Asian governments, the numbers of Chinese and the degree of assimilation already achieved in each country, and not least on the attitudes of individual Chinese about their countries of adoption.

In 1998, the Asian economic miracle seemed like a distant dream for the economies of Southeast Asia, with the string of bad news being blamed on excesses committed during the years of strong growth. The countries reeled from the continued withdrawal of capital from the region, the disintegration and collapse of confidence in domestic financial sectors, policy- and psychology-induced demand contractions, the interdependent weaknesses in the international value of their currencies, and political conflict and a significant erosion of the social consensus over economic policy.

The Southeast Asian economies faced these problems in common, but the impact varied according to the level of development, specific features in their financial systems, the nature of the governments’ responses to the crisis, and the impact of the crisis on political stability.

The withdrawal of capital from the region in 1998 constituted the biggest shared factor among the Southeast Asian economies. The level of capital outflow, initiated by the Thai economic crisis of July 1997, increased in 1998 for the four most severely affected ASEAN economies — Indonesia, Malaysia, the Philippines, and Thailand — plus South Korea, with net capital outflows accelerating from US$1 billion in 1997 to $28 billion in 1998. In 1996, there had actually been net inflows of $103 billion.

The fickle nature of short-term portfolio investments was much in evidence during 1998. There was a brief slowdown of capital outflow from the region in the first quarter of 1998, but the levels accelerated as evidence of a deep recession in Japan became inescapable and the yen weakened, Russia's teetering economy saw the offering of interest rates on short-term Russian bonds reach 80 to 100 per cent, and Indonesia's thirty-year political arrangements disintegrated with President Soeharto's resignation in May.

In August, the Russian economic programme collapsed and a general retreat from portfolio investments in all emerging markets ensued. The premium on developing country debt shot up to unprecedented levels of 10 to 15 percentage points by October 1998. Brazil lost at least US$20 billion dollars in international reserves between the Russian collapse and the start of an International Monetary Fund (IMF) economic rescue package in November 1998; this package collapsed in mid-January 1999. Between 1997 and 1998, private capital flows to the emerging economies fell from US$260 billion to US$152 billion in favour of industrial country equity markets.

American troops came into Thailand twice, in 1961 and 1963. They were contingents of Marines sent to this country when communist Pathet Lao forces advanced towards the Mekong River which serves as a border between Thailand and Laos. The objective was to deter the aggressive communist side from seeking excessive military and political gains in Laos. When the communist forces retreated, the Marines as well as other SEATO forces from the United Kingdom, Australia and New Zealand which joined the U.S. troops in 1963 were repatriated. The U.S. left only a contingent of Army Engineers to help build the strategic road from the naval base of Sattahip to Northeast Thailand.

Why did the U.S. want to send its armed forces into Thailand?

Since I am not an American and privy to the deliberations which led to such a decision, I can only guess at the reasons which a foreigner like myself can detect. As I see it, the reason is not of a selfish nature. The U.S. did not hope to derive any particular benefit from such a move. To my mind, the U.S., in those days, must have felt a sense of mission, a certain responsibility for safeguarding peace and preventing war, particularly aggressive wars. In other words, the U.S. was conscious of its role as “world policeman”, since it has been blamed for allowing wars to break out because it failed to take the necessary actions or to take part in the activities of international organizations like the League of Nations. As a result of those accusations, some of them unfounded, the U.S., since World War II, took it upon itself to bar the road to aggressors and to extinguish the flames of international conflicts. The despatch of U.S. Marines came within the purview of that mission.

Later on, perhaps around 1965 (the exact date is unknown to me as the talks or negotiations were conducted in secret between the then Prime Minister, Field Marshal Thanom Kittikachorn, and the American authorities), the U.S. sent its military personnel, drawn mostly from the Air Force, and war equipment into Thailand. As it was learnt later, this action was necessary because of greater U.S. involvement in the Vietnam War. The military aircraft and the use of air-bases in this country were needed to support U.S. operations in Vietnam.