US-ASIA: Clinton's Asia policy
Far Eastern Economic Review
Oct 1, 1998

Politics & Policy

Foreign Relations:
 Asia Ignored:

 A beleaguered Clinton has little time for the region

By Bruce Gilley in San Francisco with Shawn Crispin and Matt Miller in
    Washington, Peter Landers in Tokyo, Susan V. Lawrence in Beijing, Salil
    Tripathi in Singapore, Ahmed Rashid in Islamabad and Shiraz Sidhva in
 New Delhi
1993 Words


Just before millions switched on their televisions to watch Bill
Clinton's videotaped sexual confessions on September 21, Singapore's
senior minister, Lee Kuan Yew, captured the mood of regret in Asia over
the American president's troubles. "I wish this hadn't happened," Lee
told foreign reporters in Singapore. "I think it is not good for us."

   Lee wasn't fretting, like politicians in the United States, about the
effect on young minds of the lurid details of Clinton's sex scandal.
Instead, he was pointing to the damaging fallout on Asia of a Washington
absorbed in a domestic drama.

 Indeed, as Clinton battles to survive the Monica Lewinsky affair,
he'll have little time for the problems of the world, much less Asia. A
distracted U.S. president is bad news for the region, which is plagued
by a number of potentially explosive security and economic matters: an
arms race in South Asia and a missile launch by North Korea, for
example, or an urgent need for financing in Indonesia, Thailand and
South Korea, and for Japan to lead an Asian economic revival (See
related illustration -- FEER Oct. 1, 1998).
   Although none of these issues has yet reached crisis-point, analysts
say any of them could easily spin out of control in the absence of
decisive U.S. leadership. "When confronted with a crisis, this
administration is not going to be able to respond creatively," says
Richard Fisher, acting Asia director at the conservative Heritage
Foundation in Washington. If impeachment proceedings are launched
against Clinton, the political paralysis in the U.S. will be protracted.
"A White House gearing up to fight impeachment will have no time to
spend on these issues," notes Robert Manning, a senior fellow at the
Council on Foreign Relations in Washington.
   Perhaps most worrying is American neglect of newly nuclear South
Asia. Washington had hoped that the July visit to Pakistan and India by
U.S. Deputy Secretary of State Strobe Talbott would lead to both
countries signing the Comprehensive Test Ban Treaty by September. Such
compliance in hand, Clinton would have made a scheduled trip to India
and Pakistan with the knowledge that he could waive Washington-imposed
sanctions meant to punish the two nations for their May nuclear testing.
   But White House statements now indicate that negotiations with India
and Pakistan have bogged down, and the "insufficient" progress doesn't
warrant a Clinton visit in November. For New Delhi at least, the
reluctance to go all the way -- particularly with a politically
emasculated Clinton -- has had much to do with the huge political cost
at home of signing the treaty, after two years of stridently opposing
   Certainly, Clinton's woes have contributed to the inertia on the
waiver. On September 17, a report co-sponsored by the Washington-based
Brookings Institution and the Council on Foreign Relations urged
Congress to permit the president to overturn the sanctions. But the
Republican-dominated House of Representatives, seizing the political
opportunities in a weakened Clinton, is delaying passing a bill that
would grant him waiver privileges.
   "Waiver authority is a harder sell to Congress now than it was a few
weeks ago. There are definitely elements in Congress that feel India and
Pakistan need to pay a price for their nuclear tests," says Richard
Haass, co-author of the report and a director at the Brookings
Institution. He adds that with Congress soon going into recess until
February, "it becomes a matter of national security that President
Clinton is allowed to waive the sanctions."
   Pakistan's fragile economy is hurting badly from the sanctions, and
this could lead to social unrest in the country. "A stable Pakistan in
possession of nuclear weapons is reason enough to worry," notes the
Brookings report. "An unstable Pakistan would be that much worse."
   Security concerns threaten Central Asia, as well. Iran has mobilized
more than 200,000 soldiers on its border with Afghanistan and has
threatened war over the neighbouring Taliban regime's murder of at least
10 Iranian diplomats. A diplomatic solution to the stand-off was reached
at a September 21 meeting of a UN committee in New York. But Teheran
remains suspicious of Washington's unwillingness to denounce ally
Islamabad for providing military support to the Taliban. Indeed, U.S.
Secretary of State Madeleine Albright, who attended the New York
meeting, made no such declaration.
   Washington also failed to respond effectively to Pyongyang's launch
of a satellite-carrying rocket over Japan on August 31. Many analysts
believe North Korea fired the missile smug in the knowledge that a
distracted Clinton administration wouldn't be in a mood for a fight. The
U.S. Congress put up its dukes, however: It rejected a request for $35
million to pay for 500,000 tons of heavy oil for North Korea in 1999,
promised in a deal to get Pyongyang to freeze its nuclear programme.
   With Clinton unwilling to stare down critics in Congress, the U.S.
ambassador to Seoul, Stephen Ambrose, has taken matters into his own
hands. Citing uncertainty about the president's willingness to twist
Congressional arms to defend the agreement, Ambrose spent a week in
Washington in mid-September to lobby legislators.
   Ambrose's conciliatory approach, and the reluctance of Seoul and
Tokyo to pursue the security issue alone, could encourage Pyongyang to
provoke its neighbours again. Although Washington and Tokyo agreed on
September 20 to research a missile-defence system, that's no solution to
the immediate crisis. "Fundamentally, South Korea and Japan expect us to
deal with the big security problems," says Michael Green, a senior
fellow at the Council on Foreign Relations in Washington.
   Less dramatic than security concerns, but perhaps more critical, is
the economic fallout in Asia of Clinton's political wounds. At a time
that its financial markets are floundering, the region desperately needs
strong economic stewardship from Washington. Clinton tried to provide it
in a September 14 speech at the Council on Foreign Relations. He urged
G-7 nations to spur growth through, presumably, coordinated
interest-rate cuts, and to move away from controlling inflation -- a
call many analysts perceived as a thinly veiled plea to Alan Greenspan
to ease up on liquidity. But the U.S. Federal Reserve chairman has
remained unyielding -- bad news for Asia's cash-starved firms.
   Indeed, Clinton's rhetoric on helping Asia hasn't been followed up by
action from the U.S. Treasury Department, which hopes to avoid the messy
debt-restructuring programme it coordinated in Latin America in the
1980s. "His staffers had been urging that speech on him for months, but
he only made it when he wanted to show he was being activist," says
Douglas Paal, a former National Security Council adviser for Asia, who
now heads the Asia-Pacific Policy Centre in Washington. Adds Karl
Jackson, director of the South Asia programme at Johns Hopkins
University: "Within a few days, the whole speech was forgotten."
   Clinton has continued to pin his hopes on the International Monetary
Fund to ease the pains of the financial crisis in Asia -- and now the
world. The president has sought a fresh $18 billion to replenish the
IMF's coffers, but his political weakness has galvanized resistance from
the Republican-heavy Congress. On September 18, it approved only $3.4
billion, blaming the IMF for mishandling Asia's crisis; White House
lobbyists were pointedly silent. As partisan politics abounds in
Washington, a move to open hearings on the IMF is gaining currency.
   "There is a very real concern about the president's ability to lead
this country at present, particularly economically," says Jim Saxton,
chairman of the Congressional Joint Economic Committee. "There is no
evidence that shovelling more money into the International Monetary Fund
will have any positive effect. The central issue is that the IMF needs
to be fundamentally reformed."
   A lean-in-the-pocket IMF would have the worst impact on Indonesia,
which has received only $6 billion of a promised $11 billion. If
Jakarta's money supply is turned off, it may be tempted to flirt with
Malaysia-style capital controls. High interest rates will further hamper
recovery, thus exacerbating social turmoil in the country. Less money
from the IMF would also be a setback for Thailand and South Korea, which
the U.S. wants to see recovering fastest to reward them for maintaining
free-market policies throughout the economic imbroglio.
   If Clinton's predicament drags on, Washington will find it harder to
pressure Japan into helping refloat Asia's economy. The U.S. president
and Treasury Secretary Robert Rubin met Japan's Prime Minister Keizo
Obuchi on September 22 in New York. Clinton urged Obuchi to move swiftly
to bolster Japan's ailing economy. Obuchi's government recently drew up
a plan to reform Japan's financial system that was finalized after
making huge concessions to the opposition. Obuchi is likely to draw the
line on further adjustments, however, and a weakened Clinton won't be
able to rally leaders in Japan and other developed countries towards
making a coordinated effort to reflate. "I think Clinton's present
difficulties will make it more difficult to achieve that kind of
coordination," notes Singapore's Lee Kuan Yew.
   It will also be hard for him to take the lead at the annual meeting
of the Asia-Pacific Economic Cooperation forum in Kuala Lumpur in
November. The president was scheduled to stop over en route home from
South Asia, but that trip is now in doubt. Clinton has ordered his aides
to ensure he attends Apec, but his influence at the summit will be
limited by his inability to either set the tone for an Asian economic
revival or offer financial support through the IMF. This has raised
questions in Washington about whether he should go at all. "The
bureaucracy is under orders to make it happen no matter what the cost,"
says Asia-Pacific Policy Centre's Paal. "But going there is not going to
make a lot of sense."
   On the diplomatic front, a crippled Clinton could trip up Asian
leaders, most notably China's President Jiang Zemin, who have invested
heavily in a personal relationship with him. Those strenuous efforts now
threaten to come to nought. Since mid-September, when a Clinton
resignation became more likely, Asian leaders have scrambled to meet, or
at least identify, U.S. officials who they think will emerge from the
crisis as generals. China's Foreign Minister Tang Jiaxuan, for example,
is set to make an unscheduled detour to Washington for talks with U.S.
officials beginning September 27 after attending a UN general assembly
meeting in New York. "Chinese think-tanks and officials are all over me
with questions about what will happen," says Paal.
   For the moment, diplomacy in the Clinton government indeed seems to
be keeping its head down. "This is a time for minimal, cautious steps in
foreign policy, not for grand gestures," notes a senior administration
official in Washington. That means less attention for Asia. Albright
isn't focused on Asia, while others, such as Kenneth Lieberthal, Asia
director of the National Security Council, are experts on China, rather
than Asia.
   Some little-known figures have gained respect in Congress; they
include Charles Kartman, principal deputy assistant secretary of state
for Asia, and Thomas Pickering, undersecretary of state. But, points out
Green of the Council on Foreign Relations, "you have to go way down the
line before you find anybody with any credibility."
   Of course, Washington will have to stop navel-gazing sometime. But
when it finally refocuses on Asia -- perhaps not until the next
president is elected in late 2000 -- it might find that the region's
governments are wary about cosying up again. "The next administration is
going to have a big job to rebuild our credibility in Asia," says Robert
Manning of the Council on Foreign Relations.
   The irony of an Asia ignored by this U.S. administration is that
Clinton perhaps did more to orient American foreign policy towards the
region than any of his predecessors. In fact, according to the
videotaped testimony aired on September 21, Clinton's lawyers cited
Asia's crisis as one reason why the president should not have to testify
in his sex scandal. But as one Washington wag notes, "If he'd really
been busy with the Asian crisis, we wouldn't be in this mess."