Fueling Asia's Recovery

Abstract

The financial contagion sweeping through Asia is forcing a re assessment of the continent's future, including assumptions about energy?the lifeblood of economics and a critical factor in the geopol itics of the region. In recent decades, Asia's rapid economic growth has meant even more rapid increases in the consumption of energy. A failure to satisfy its enormous needs, it was thought, would undermine the Asian economic miracle. But now that miracle is on hold, further complicating the already tangled interaction between energy, economics, and politics. While the recent economic downturn may alleviate some of these demand pressures for now, an inability to satisfy Asia's hunger for energy over the longer term will raise new risks and even dangers. But the solution to its potential energy insecurity is not simply a matter of applying the traditional government-based solutions?resource management and diplomacy. This problem can only be solved by ac celerating the trend toward market-based energy strategies. Supplying energy to Asia has never been a simple task. Indeed, the phenomenal economic growth most East and Southeast Asian countries experienced over the recent decades has been doubly miraculous since it occurred despite severely limited energy resources in