SPECIAL REPORT

Portraits of diversity

November 17 1997
SPECIAL REPORT

Portraits of diversity

November 17 1997

Portraits of diversity

SPECIAL REPORT

Themantra a about APEC is “diversity." Its 18 members range from the world's two biggest and most sophisticated economies—the United Staes and Japan— to Papua New Guinea, a nation that still includes some people not far removed from the Stone Age. The following pages track that diversity, through profiles arid bard data. The o n' na _ r goes eyond 1 ferld Bank-style statistics io matters like corruption, freedom, access to a : elephone—a : fo weer or worse, McDonald’s' restaurants. Among the sources are the United Na i imanDeve enf Index ranking, which charts fact, such as education and health care as well as wealth; an assessment of liberty by the New York-based human rights organization Freedom House: the World Competitiveness Report rankings published by the G. tie m b ase û 1 lor. 1 Econ oí ne Forum; and the Corruption Perception Index, published by Berlin-/;', based Transparency International on the basis of surveys of business people in 52 countries. Gross domestic product purchasing power takes into account the differences in costs among countries, using a calculation known as purchasingpower parity. All money figures are in Canadian dollars.

Prime Minister John Howard was once the giant killer. The victory of his conservative coalition in March, 1996, ended 13 years of Labor Party rule in a country that has always celebrated the working man (and, more lately, woman). Now, he is facing trouble from all sides—including Asia.

Domestic critics have hounded

him on issues ranging from incompetent ministers to Aboriginal rights. And his ambivalence in the face of rising unemployment has helped fuel a surge in popularity for race-baiter Pauline Hanson and her newly formed One Nation Party. She advocates an end to Asian immigration, claiming the newcomers are taking the jobs of white Australians. The Hanson controversy has given Australia a public relations problem in Asia, where potential investors have asked why they should put money in a country that apparently does not welcome Asians. Howard’s challenge is to counter the perception that he is too passive in dealing with such issues. The APEC stage may give him a chance to restore his—and his country’s—battered image.

Population: 18 million Population growth rate: 1.2% Main language: English Principal religion: Christianity GDP purchasing power per person: $27,744 Human Development Index rank: 14 Freedom House rating: Free Global competitiveness rank: 12 Corruption index (10 is best): 8.86 Military spending per person: $534 Greenhouse gas emissions per person: 14.9 tonnes People per telephone: 1.5 People per McDonald’s: 28,571

Brunei

H

ome to one of the world’s richest men, the petroleum-

rich sultanate is run more like a private business than a country.

Sultan Haji Hassanal Bolkiah Mu’izzaddin Waddaulah is the monarch, prime minister, defence minister, finance minister, commander of the armed forces, chief

of police, boss of the petroleum unit and the broadcasting and information services—and supreme head of Islam. Living in a 1,700-room gilded palace, he is worth an estimated $52 billion, although his fortune officially belongs to the people. They are happily coddled by a welfare state that brings in Thais and Bangladeshis to do the more menial work Bruneians refuse.

So why does Brunei need APEC? The oil will run out sometime, and the sultan wants to diversify into areas such as tourism—a challenge for the conservative and dry Islamic nation on the northwest coast of Borneo. The sultan is determined not to lose Muslim values. Earlier this year, he sacked his high-living finance minister—his brother Jefri. But the move dismayed more liberal Bruneians, because Jefri also advocated easing controls on everything from alcohol to the media.

Population: 300,000 -J Population growth rate: 3.2% Main languages: Malay, Chinese, English Principal religions: Islam, Buddhism GDP purchasing power per person: $26,271 Human Development Index rank: 38 Freedom House rating: Not free Global competitiveness rank: n/a Corruption index: n/a Military spending per person: $1,145 Greenhouse gas emissions per person: n/a People per telephone: 3.8 People per McDonald’s: 300,000

Canada

Canada’s motto may be “From Sea Even unto Sea,” but throughout much of the country’s history its gaze has been fixed firmly eastwards, across the Atlantic. Even as its economic clout grew, the Pacific world lagged in luring Canadian attention away from the magnetic pull of the Euro-

pean mother countries with their culture and old trade ties, their emigrants and their wars. To be sure, Canada has always expressed an interest in being part of the Pacific community—Ottawa likes to sit at the table of just about every international organization that will have it. But Jean Chrétien is the first Canadian prime minister to speak metaphorically of a widening Atlantic Ocean and shrinking Pacific. In power, the Chrétien liberals have been among the world’s most enthusiastic boosters of open trade, lauding the Free Trade Agreement with the United States that they once opposed, and signing new ones with countries as diverse as Chile and Israel. That embrace of trade has changed another element of the traditional Canadian way: in seeking opportunities along the Pacific Rim, the Chrétien government has downplayed criticism of big potential partners such as China over their human rights records, preferring to keep ledgers on a mainly mercantile account.

Population: Population growth rate: 1.5%

Main languages: English, French

Principal religion: Christianity

GDP purchasing power per person: $30,302

Human Development Index rank: 1

Freedom House rating: Free

Global competitiveness rank: 8

Corruption index (10 is best): 9.1

Military spending per person: $455

Greenhouse gas emissions per person: 13.7 tonnes

People per telephone: 1.3

People per McDonald’s: 36,319

Chile

Known as the jaguar of Latin American economies,

Chile is doing well internationally in areas as diverse as wine, mining and aquaculture. President Eduardo Frei, the second democratically elected leader after a 17-year military dictatorship, has been eagerly

promoting his country’s success, just last year signing a free trade agreement with Canada. Next March, Augusto Pinochet, the general who deposed Marxist leader Salvador Allende in 1973 and ruled with an iron fist, will step down as army commander-in-chief. Although he will become a “senator for life,” his departure will leave Frei with the challenge of managing the country’s transition to full democracy and ensuring there are better controls on its often unbridled economic growth. Given its history, Chile’s membership in APEC is natural for reasons beyond its 6,000-km Pacific frontage—

its economic emergence under a firm military hand has strong parallels in such Asian dragons as South Korea and Taiwan.

H~~ I Population: 14.3 million

~_I Population growth rate: 1.24%

Main language: Spanish Principal religion: Christianity GDP purchasing power per person:

$12,689

Human Development Index rank: 30 Freedom House rating: Free Global competitiveness rank: 18 Corruption index (10 is best): 6.05 Military spending per person: $100 Greenhouse gas emissions per person:

2.4 tonnes

People per telephone: n/a People per McDonald’s: 572,000

China

China is the one emerging market the rest of the world cannot afford to ignore—and its leaders know it. They have easily fended off international pressure to expand civil and political liberties, while welcoming foreign investment and trade.

So rapidly has the private sector expanded that it is more accurate to call the country totalitarian than Communist, despite the name of the ruling party. And at the recent party congress, President Jiang Zemin served notice that the last Communist bastion would fall. The country’s vast network of money-losing state-owned enterprises—from steel factories to transport services—would be reformed, he announced. Many, Jiang indicated,

would be privatized or shut down. That task, likely to take years, will present his greatest challenge: how to cope with the millions of workers who face unemployment as a result. But Jiang, who will arrive at APEC fresh from visits to the United States and Mexico, is better placed than ever to ride out any storms. The congress made clear that, less than a year after the death of paramount leader Deng Xiaoping, Jiang is now China’s unchallenged boss.

Population: 1.2 billion Population growth rate: 1.2%

Main language: Chinese Principal religions: Buddhism, Daoism GDP purchasing power per person: $4,503 Human Development Index rank: 108 Freedom House rating: Not free Global competitiveness rank: 36 Corruption index (10 is best): 2.88 Military spending per person: $19 Greenhouse gas emissions per person:

13.4 tonnes

People per telephone: 45.4 People per McDonald’s: 7,894,736

Hong Kong

Many foreign commentators—as well as local critics—forecast that gloom and doom would descend upon Hong Kong as soon as it reverted to Chinese control last

July 1. But in the months that followed, both local and foreign businesspeople said little had changed in the former

British colony. Financial gloom has descended in recent weeks, as Southeast Asia’s currency

crisis has battered Hong Kong’s markets. Pro-democracy activists are also unhappy with Chief Executive Tung Chee-hwa’s plans for a legislative election next year, calling the system too restrictive. But his approval rating remains high in polls, and respondents show confidence in his assurances that the government and the news media will remain free and open. Tung has approached his job much like a big-city mayor, largely avoiding heated debate over civil liberties and focusing instead on livelihood issues—the high price of apartments, a shortage of public housing, and illegal immigrants from the mainland. APEC is one example of Hong Kong’s vaunted “high degree of autonomy”—with Beijing’s blessing, it remains a member, separate from China.

Population: 6.4 million Population growth rate: 2.1% Main languages: Chinese, English Principal religions: Buddhism,

Daoism, Christianity GDP purchasing power per person: $33,478

Human Development Index rank: 22 Freedom House rating: Partly free Global competitiveness rank: 2 Corruption index (10 is best): 7.28 Military spending per person: n/a Greenhouse gas emissions per person: n/a People per telephone: 1.5 People per McDonald’s: 48,484

Indonesia

Indonesia has its own way conducting elections. The country has held them faithfully every five years since 1968, yet always manages choose the same man. President Suharto, 76, has controlled Indonesia since the aftermath of the 1965 Year of Living Dangerously, the complex apparent

coup attempt that toppled nationalist Sukarno. But many analysts believe his next term, beginning in 1998, will be his last. That would close out an era in which Indonesia has both progressed magnificently—and seen massive wealth concentrate in and around Suharto’s family. Suharto opened the country to foreign investment, but now faces growing international condemnation of corruption and government interference in business, fuelled in part by the recent Bre-X gold-mining scandal. And he continues to face heavy criticism over human rights issues, such as the perennial struggle over the Indonesian-annexed territory of East Timor, highlighted by the award of the Nobel Peace Prize to two activists last year. Suharto’s coming challenge may be to arrange a soft landing—for the country, battered by Southeast Asia’s currency crisis, and for himself as he leaves the scene.

Population: 200 million Population growth rate: 1.7% Main languages: Indonesian, Javanese, Sundanese, Chinese Principal religions: Islam, Christianity GDP purchasing power per person: $5,755 Human Development Index rank: 99 Freedom House rating: Not free Global competitiveness rank: 30 Corruption index (10 is best): 2.72 Military spending per person: $14 Greenhouse gas emissions per person:

0.9 tonnes

People per telephone: 90.9 People per McDonald’s: 2,689,189

Japan

In the late 1980s, many foreign commentators thought Japan would dominate the world. Its stock market was soaring, its exports were booming and its investment was fuelling Asia’s economic miracle. But while its latest electronic innovation—the ever-demanding Tamagotchi

computer “pet”—has grabbed kids around the globe, the country is in retreat. Years of economic stagnation have called into question its system of close government-business collaboration, heavy regulation and tightly controlled markets. The quadruple whammy of 1995—a series of bank failures, a rapidly rising yen, terrorist gas attacks on the Tokyo subway and a ; devastating earthquake—amplified the sense of unease. Now, the country is bringing in a series of financial reforms, known as the “Big Bang,” designed to deregulate markets and make the country more competitive. Straight-

talking Prime Minister Ryutaro Hashimoto could use an economic upturn—his popularity has plummeted due to corruption scandals in his cabinet.

Population: 126 million Population growth rate: 0.2% lain language: Japanese Principal religions: Shintoism, Buddhism GOP purchasing power per person: $23,440 Human Development Index rank: 7 Freedom House rating: Free Global competitiveness rank: 13 Corruption index (10 Is best): 6.57 Military spending per person: $506 Greenhouse gas emissions per person: 8.7 tonnes People per telephone: 1.5 People per McDonald’s: 85,539

Malaysia

Malaysian Prime Minister Mahathir Mohamad will cut one of the most interesting and seemingly contradictory figures at APEC. He long opposed the organization, championing an Asians-only approach to trade grouping. Next year, though, he will host it. Under him, Malaysia

has become one of the most suc-

cessful of East Asia’s many success stories, and his openness to Western investment has been major reason. But Mahathir takes no prisoners in his attacks on the West. These reached a crescendo at the recent World Bank meeting in Hong Kong when he went head-to-head with New York City-based financier George Soros, whom Mahathir accused of deliberately trying to damage Asia with “immoral” currency speculation. Soros

is also a well-known human rights advocate, and Mahathir has often been scathing in his distaste for Western human rights “meddlers” who criticize Asian societies. His own multiracial country, he argues, needs strong security laws to prevent any recurrence of bloody fighting between Malays and Chinese. For all that, however, Malaysia under Mahathir has become a steadily more open society—and certainly more wealthy.

■ Population: 21 million

Population growth rate: 2.6%

Main languages: Malay, English, Chinese, Tamil

Principal religions: Islam, Buddhism

GDP purchasing power per person: $13,671

Human Development Index rank: 60

Freedom House rating: Partly free

Global competitiveness rank: 10

Corruption index (10 is best): 5.01

Military spending per person: $152

Greenhouse gas emissions per person: 3.4 tonnes

People per telephone: 6.8

People per McDonald’s: 216,494

Mexico

N

o doubt President Ernesto Zedillo would have preferred not to lose control of the lower house of congress in last summer’s election. But it is sign of democratic progress he could point to, given that Mexico has been ruled by the same group, the Institutional Revolu-

tionary Party, or PRI, for the past 68 years. Zedillo, a technocrat, is keen to reform the country’s corruption-ridden institutions, from politics to the justice system. But he is enough of a realist to know that it will not happen overnight. To his critics, that is not good enough. Recently, Canada’s ambassador stepped down from his post after giving an interview sternly criticizing Mexico’s performance, including its failure to combat the burgeoning drug trade. Other commenta-

tors believe that Zedillo is too weak to take on such entrenched interests. But the president has made solid progress in pulling the country out of the economic devastation of the peso crisis of late 1994. Between that and his country’s membership with Canada and the United States in the North American Free Trade Agreement, he may be able to offer some of his troubled APEC colleagues a few words of advice.

Population: 94 million Population growth rate: 1.9%

Main language: Spanish

Principal religion: Christianity

GDP purchasing power per person: $9,424

Human Development Index rank: 50

Freedom House rating: Partly free

Global competitiveness rank: 33

Corruption index (10 is best): 2.66

Military spending per person: $17

Greenhouse gas emissions per person: 3.5 tonnes j

People per telephone: 7.6

People per McDonald’s: 764,227O

New Zealand

It has long been known as a peaceful country of pristine beaches and more sheep than people, but New Zealand’s politics have been downright nasty lately. Moderate Prime Minister Jim Bolger had been uneasily sharing power in a coalition with fiery nationalist Winston Peters.

Then, just last week, Bolger’s Na-

tional Party colleague Jenny Shipley mounted a swift internal coup against him. Bolger agreed to step down after APEC, and his conservative rival will take over as New Zealand’s first woman prime minister. Bolger had suffered a steep fall in the polls, much of it due to the unpopularity of coalition partner Peters. The volatile New Zealand First Party leader, a part-Maori who campaigned on a platform of protectionism

which he later dropped, was earlier this year convicted of assaulting a National Party MP The leadership switch seems unlikely to bring major change to New Zealand’s economic strategy, much admired by APEC free-trade ideologues. One of the most open economies in the world, the country takes a hands-off approach to foreign imports and investment, with rock-bottom tariffs and duties and virtually no protection.

Population: 3.7 million Population growth rate: 1% lain language: English Principal religion: Christianity GDP purchasing power per person: $25,367 Human Development Index rank: 9 Freedom House rating: Free Global competitiveness rank: 3 Corruption index (10 is best): 9.23 Military spending per person: $239 Greenhouse gas emissions per person: 7.1 tonnes People per telephone: 1.4 People per McDonald’s: 28,461

Papua

New Guinea

PNG, as it is known, is covered with tropical rain forest, boasts 9,000 species of plants and counts more than 750 languages among its people. Tribal cultures are as alive as they were when anthropologist Margaret Mead published her famous study on gender and social behavior, Growing

Up in New Guinea, in 1930. Clan warfare has been at the heart of much of the country’s political turmoil. The shaky parliamentary democracy has been host to revolving-door governments, and a bloody nine-year war for independence has raged on the island of Bougainville.

Currently, though, Prime Minister Bill Skate is on a roll. He recently signed a truce with the Bougainville rebels, raising hopes for peace. That should be helpful if he hopes to use APEC to woo wary investors. PNG needs more money to develop its resource riches—currently dominated by Australian and American interests—and improve the sorry state of tourism. For that, how-

ever, Skate will also need to combat the “rascals”— local parlance for the murderous thieves and muggers who plague the capital, Port Moresby.

Population: 4.3 million Population growth rate: 2.3% Main languages: Pidgin, English, Motu Principal religion: Christianity GDP purchasing power per person: $3,433 Human Development Index rank: 128 Freedom House rating: Partly free Global competitiveness rank: n/a Corruption index (10 is best): n/a Military spending per person: $19 Greenhouse gas emissions per person: 0.5 tonnes People per telephone: 49 People per McDonald’s: none

Philippines

Filipinos like to joke about a lot of things, but they take democracy seriously. President Fidel Ramos recently went through the political wringer over his supporters’ attempts to amend the constitution and allow him another six-year term. For some, that raised the ghost of Ferdinand Marcos and his 20-year rule, 13 of

them as a dictator operating outside the constitution. Protesters came out in numbers unseen since the People Power revolt toppled Marcos in 1986, and Ramos said he would not run again.

His supporters were saddened. Ramos has transformed East Asia’s basket case into one of the most vibrant economies in the region. Although the country was hard hit by the recent currency crisis, many emigrant business people have returned from the United States and Canada, saying opportunities have never been so good. Until the successor to Ramos is elected next May, however, business will remain uneasy. One of the most popular contenders is Vice-President Joseph Estrada, a beefy former action-movie star known more for posturing than policy.

Population: 70 million Population growth rate: 2.3% Main languages: Tagalog, Cebuano, English Principal religions: Christianity, Islam GDP purchasing power per person: $4,198 Human Development Index rank: 98 Freedom House rating: Free Global competitiveness rank: 31 Corruption index (10 is best): 3.05 Military spending per person: $24 Greenhouse gas emissions per person: 0.7 tonnes People per telephone: 47.6 People per McDonald’s: 588,235

Singapore

Home of the APEC Secretariat, Singapore is in many ways emblematic of modern Asia. It has one of the most dynamic economies in the world, it glories in its racial diversity and it has struggled to create a nation from a 640-square-kilometre former British colonial island. More

controversially, however, it also stresses “Asian values.” To founding prime minister Lee Kuan Yew, now an influential senior minister without portfolio, that means keeping a firm guiding hand on society, and brooking little criticism of a virtually corruption-free government that sees itself, Confucian-style, as benevolently working in the best interest of the people. Lee and his protégé successor, Prime Minister Goh ChokTong, have become notorious for winning huge damages in defamation suits against opposition politicians for comments made in the heat of an election. The news media are firmly under the government thumb, and laws micro-manage daily life. Chewing gum is banned as too messy, and there are penalties for failure to flush a public toilet. Singapore’s defenders, however, say that it is an ideal home for families—and multinational corporations. It is one of Asia’s safest, cleanest cities, and everything works.

Population: 3.1 million Population growth rate: 2%

Main languages: Chinese, English, Malay, Tamil Principal religions: Daoism, Buddhism,

Islam, Christianity

GDP purchasing power per person: $34,208 Human Development Index rank: 26 Freedom House rating: Partly free Global competitiveness rank: 1 Corruption index (10 is best): 8.66 Military spending per person: $1,433 Greenhouse gas emissions per person: 16.1 tonnes People per telephone: 2 People per McDonald’s: 31,000

South Korea

In the confrontation capital of Asia, where fiery street protests are as regular a ritual as clashes among the country’s corporate giants, there is no separating politics from economics. President Kim Young Sam has been accused of a number of bribery scandals, and his son, recently

convicted for accepting “corporate donations,” is in jail. So, too, is former president Roh Tae Woo, who last year tearfully admitted to amassing $650 million. The scandals have undermined Kim’s authority and made a mockery of his much-touted vow to clean house. Coupled with the country’s economic woes—the big multinationals have been hit hard by tougher foreign competition—the disastrous political scene has created an unusual sense of de-

featism among Koreans. The clouds will clear somewhat after the presidential election in December to replace Kim. But how much the system will change remains in doubt. Even opposition leader Kim Dae Jung, long a pro-democracy hero, has recently been accused of accepting millions from the corporations involved in past scandals.

Population: 46 million ^4Population growth rate: 0.9%

Main language: Korean Principal religions: Christianity,

Confucianism, Buddhism GDP purchasing power per person: $17,222 Human Development Index rank: 32 Freedom House rating: Free Global competitiveness rank: 20 Corruption index (10 is best): 4.29 Military spending per person: $391 Greenhouse gas emissions per person: 6.3 tonnes People per telephone: 2.3 People per McDonald’s: 484,210

Taiwan

It is only 150 km from China, but the island of Taiwan seems much farther. It is, after all, dynamic, rich—and democratic. Yet to optimists about China, Taiwan’s path could be the one the mainland follows. They both began postwar life with dictatorial governments—China run by the

Communists who won the civil war in 1949, Taiwan by the losing Nationalists who fled there. While China was mired in socialism, Taiwan built up a thriving economy based on private enterprise and foreign investment—just as China is now doing. The biggest divergence, however, came in 1987, when Taiwan lifted martial law and began to introduce democratic reforms—something China has yet to do. The creation of the world’s first Chinese democracy—after 5,000 years of highly authoritarian tradition—culminated last year in the first direct presidential election, won by Nationalist incumbent Lee Teng-hui.

But democracy also opened the way to opposition demands for Taiwan independence. Lee’s constant challenge is to promote Taiwan as a successful entity separate from China, such as attempting to gain international recognition, without making Beijing ballistic—literally. The mainland has long threatened to retake Taiwan by force if it were to declare independence. Even APEC is a compromise. As part of the delicate diplomatic

dance, Lee is not invited to the summit, though a Taiwan representative will attend, and the island is known officially in APEC as “Chinese Taipei.”

Population: 22 million Population growth rate: 1%

Main languages: Chinese, Taiwanese Principal religions: Buddhism, Daoism GDP purchasing power per person: $21,364 Human Development Index rank: n/a Freedom House rating: Free Global competitiveness rank: 9 Corruption index (10 is best): 5.02 Military spending per person: $680 Greenhouse gas emissions per person: n/a People per telephone: 2.4 People per McDonald’s: 112,244

Thailand

Thais like to say mai pen lai, or “don’t worry”— and for the past 10 years or more, they didn’t The go-go economy could do no wrong. Growth was running at eight per cent or more a year, exports were booming, real estate prices were soaring, and banks were lending against the slimmest of assets. No more: now Thais are worried, big time. Chastened finance officials admit they allowed the economy to get out of control. The result was last summer’s currency crisis and bank closures—followed by a painful $21-billion International Monetary Fund bailout It will take the country at least two years to climb out of the wreckage. Chavalit Yongchaiyudh, prime minister since late 1996, faced intense criticism for his administration’s handling of the crisis and finally resigned last week. At APEC, Thailand’s representative will be intent on reassuring his peers—and international investors—that the country is getting back on track. He may find it harder to win back the trust of Thais. They always knew their government was plagued by corruption, but the trade-off was supposed to be solid financial management in the wider economy. That faith has been shattered.

Population: 61 million Population growth rate: 1.5%

Main language: Thai Principal religion: Buddhism GDP purchasing power per person: $11,349 Human Development Index rank: 59 Freedom House rating: Partly free Global competitiveness rank: 14 Corruption index (10 is best): 3.06 Military spending per person: $82 Greenhouse gas emissions per person: 1.8 tonnes People per telephone: 26.3 People per McDonald’s: 1,150,943

United States

T1

1

vhe United States comes to APEC as the undisputed big kid on the block. With Japan still struggling out of recession,

American economic might has no rival in Asia—or the world.

The mid-’90s has been a golden time for the United States, and it shows no sign of ending after

seven years of expansion, the longest boom since the 1950s. To make the party more festive, governments at ail levels have finally tamed their

deficits, inflation remains at 30-year lows and even America’s notorious crime rate is sharply down. President Bill Clinton has reaped the benefits: despite a persistent series of scandals, his approval rating in polls is about 60 per cent, a remarkably high level. Still, allegations that Asian money was funnelled illegally to his presidential campaign cast a shadow over his administration’s relations with China and Indonesia, in particular. In another sense, though, the accusations of influence-buying simply illustrated the larger truth: staying well-connected with the Americans and their pulsating economy is crucial to Asia’s—and APEC’s—prosperity.

Population: 268 million c AY Population growth rate: 1%

Main language: English Principal religion: Christianity GDP purchasing power per person: $39,636 Human Development Index rank: 4 Freedom House rating: Free Global competitiveness rank: 4 Corruption index (10 is best): 7.61 Military spending per person: $1,537 Greenhouse gas emissions per person:

18.2 tonnes

People per telephone: 1.3 People per McDonald’s: 20,209