In Asia's Mirror: From Commodore Perry to the IMF

In Asia's Mirror: From Commodore Perry to the IMF

Mini Teaser: Asia has, in its moments of crisis, been forced to open up to the West before. These openings have been attended by an interesting kaleidoscope of moods, their usual pattern neatly captured in the life of just one man, both hero and anti-hero of t

by Author(s): Sebastian Mallaby

Asia has been laid low before. It has, in its moments of crisis, been
forced to open up to the West before. These openings have been
attended by an interesting kaleidoscope of moods, their usual pattern
neatly captured in the life of just one man, both hero and anti-hero
of the most dramatic Asian opening of all. His name is Takamori Saigo.

Saigo's story starts in mid-nineteenth century Japan: a Japan that is
still a feudal state, divided by caste, virtually devoid of industry.
After two and a half centuries of shunning contact with the outside
world, Japan's proud isolation is breaking down. Americans and
Europeans are pushing into Asia, demanding opportunities to trade,
carving up China. In 1853 it is Japan's turn. An American force
commanded by Commodore Matthew Perry appears uninvited in Tokyo Bay,
demanding that Japan open up also. Saigo and a group of fellow
samurai decide that Japan can only survive by being strong; they
launch a modernizing revolution now known as the Meiji Restoration.
The encrusted caste system is scrapped; a system of modern law is put
in place; designs for weapons and industrial machines are procured
from America and Europe. After its long hibernation, Japan's doors
are suddenly thrown wide. Even today, Japanese still remember the
Meiji Restoration of 1868 as the First Opening.

Then, barely a decade on, Saigo has a change of heart. The reforms
needed to modernize Japan have destroyed the feudal privileges of his
samurai friends. The samurai right to wear swords has been abolished;
their public stipends have been cut and then eliminated. This fills
Saigo with guilt: forced to choose between foreign modernity and the
human bonds of old Japan, a true samurai ought to prefer loyalty. To
make amends, Saigo leaves the government and assembles an army of
40,000 rebels, dedicated to the overthrow of the Westernizing state
that he had earlier created. A bloody fight ensues; the rebellion
fails; Saigo commits ritual suicide.

The rebellion, and the grisly death, took place over a century ago,
in 1877. Yet in modern Japan Takamori Saigo is still something of a
hero. Museums and statues commemorate him, politicians invoke his
name, and since its appearance in 1975, a series of books about him
has sold more than eight million copies. This fascination hinges on
Saigo's paradoxical career: He understood the need to modernize and
copy from the West, yet he sacrificed his life defending Japan's
ancient character. The Japanese are captivated by this, because the
struggle between these two conflicting instincts is the story of
their country. At the Meiji Restoration, and again after the Second
World War, and yet again when its economy collapsed in the early
1990s, Japan has responded to weakness by opening up to the West. And
yet, each time, it has felt the powerful undertow of nationalism and
nostalgia.

For anyone trying to make sense of Asia's current financial mess,
Saigo's story is instructive. The humbling of Thailand, Indonesia,
and South Korea has brought another grand opening to the West, like
Japan's earlier openings. Asia is vulnerable, as Japan was in Saigo's
time: its system of capitalism has been made to look primitive, its
firms are in hock to Western creditors. And Westerners have
dispatched to Asia the technocrats of the International Monetary
Fund. In its spirit, if not in its details, the IMF's progress
through Asia over the past year recalls the long-ago voyage of
Commodore Perry.

When Perry visited Japan, he brought exotic gifts: a graph machine,
maps, and a miniature steam train. Now the IMF brings credit lines:
$17 billion for Thailand, $43 billion for Indonesia, $57 billion for
South Korea. Perry brought a trade ultimatum along with his gifts.
The IMF brings demands for high interest rates, greater transparency
in financial institutions, greater openness to foreign investors,
less government involvement in the allocation of credit, less
cronyism. In theory, the IMF is a supranational arbiter, with the
power to pursue policies independent of America; in practice, it has
little more leeway than did Perry when he set sail, entrusted by
President Fillmore with "full and discretionary powers" to deal with
the Japanese as he saw fit. Nobody doubts that the IMF represents
American views. From the start of the Asian crisis, its technocrats
have worked hand in glove with Robert Rubin's Treasury Department, a
cooperation facilitated by the fact that Rubin's deputy, Lawrence
Summers, comes from the IMF's sister organization, the World Bank;
while David Lipton, the Treasury's top international man, is a former
IMF official.

If the IMF, like Perry, is bent upon asserting American economic
ideas, then East Asians, like the Japanese of Perry's time, seem
disposed to listen--at least initially. This is especially true in
South Korea, where the onslaught of financial turmoil in December
1997 coincided with a presidential election. The voters blamed the
country's economic chaos on the president, and therefore snubbed his
chosen successor. In his place, they elected Kim Dae Jung, a
challenger who had long criticized Korea's UN-Western economic
system. Kim blames financial turmoil on cronyism, and declares that
the corrupt ties between government and business are best dissolved
by deeper democracy, Western style. He has welcomed the foreign
infiltration of South Korea's economy, taking on those who suspect
that if outsiders buy Korean firms, Korea's independence will be
compromised. In short, he has made all the arguments that believers
in Westernization love to hear. Nicholas Kristof, writing in the New
York Times, declared in February that Kim Dae Jung stands for a "new
Korea and a new Asia: political democracy, market-oriented economics."

Essay Types: Essay