Into The Nineties: Global Economic Challenges and the Southeast Asian Response

Abstract

Introduction Few years have been as eventful as 1990, and the year will be remembered by different people for different reasons. Economic historians, however, will surely remember it for the final demise of state socialism as a model for economic develop ment. As the hammer and sickle flags were pulled down for the last time in one Eastern European country after another, the full implications of years of socialist planning, mismanagement of resources, and devastation of the natural environment began to emerge for all to see. Some will regret the failure of the world's largest and most costly social experi ment. Others may be disappointed by the apparent loss of social values that the socialist system ostensibly espoused. Yet others will mourn the disappearance of a convenient adversary to blame for their own mistakes. And many will object to the speed with which transition is taking place. But only those who, most often for reasons of personal power, would close their eyes on reality can fail to see after 1990 that the centrally planned socialist economies have failed to deliver the goods and to provide the services their people want. Moreover, they have remained unsuccessful in their attempts to change human nature in order to create the new social being required for the socialist system to function. As leaders in Albania begin to accept these facts, those in Cuba and North Korea still look on as lone protagonists of state socialism. But in Southeast Asia, a process of economic deregulation is now taking place, both in Vietnam and Laos, countries which had previously banked on their own forms of state socialism. In part this is the result of the withdrawal of assistance by the Soviet Union and its Eastern European satellites, their main supporters in the past. But even more important is the loss of credibility of an ideology that has been unceremoniously dropped by the Soviet Union, its main exponent. The ideological changes in the socialist camp have also furthered a partial acceptance of market mechanisms in Myanmar. And the ASEAN countries of Southeast Asia, that are already market-oriented to a great extent, have continued to discard the remnants of state intervention and control in their economies. Who would have believed such a scenario at the beginning of the year? As walls crumble and barriers are penetrated, new forms of political, economic, and even military co-operation are evolving. For the first time since the beginning of the cold war, the Soviet Union and the United States have submitted proposals for resolution by the United Nations jointly. Confrontation politics have given way