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IN 1999, while recovering from the Asian financial crisis that wreaked havoc on his country's economy, Mahathir Mohamad, Malaysia's then prime minister, claimed that had a regional monetary fund existed, "the east Asian currency crisis of 1997 and 1998 would not have occurred, would not have endured and would not have gone to such ridiculous depths".
The idea of an Asian Monetary Fund had been proposed by Japan in 1997, but like Dr Mahathir's own 1990 proposal for an east Asian economic grouping, it had petered out in the face of stiff US opposition. In his memoirs, James Baker, former US secretary of state, confessed to having done his "best to kill" the Mahathir proposal, even though he took a "moderate line on [the] idea in public".
Is Dr Mahathir's vision about to become a reality? Recently, Kuala Lumpur hosted the first east Asian summit, which brought together leaders of the 10 members of the Association of Southeast Asian Nations, plus Japan, China, South Korea, Australia, New Zealand and India. The "east Asia" represented is, of course, a functional and political concept, rather than a geographic or racial one. Moreover, unlike Dr Mahathir's vision of an east Asia led by Japan, the current framework of east Asian regionalism sees China as the key player.
Abdullah Badawi, the current prime minister of Malaysia, has described the summit as a "leaders-led" summit. This implied that participants were to engage in real brainstorming and agenda-setting, not merely rubber-stamping decisions made at earlier meetings of senior officials and ministers. But he could have described the event with greater accuracy as a "leaderless summit", because Asia's big powers -- China, Japan and India -- are constrained by their rivalry from playing a genuine leadership role. Meanwhile, Asean remains weakened by the 1997 crisis.
The summit came at a time of growing regional economic interdependence. It also reflected a common desire to avert and manage future crises induced by financial volatility, pandemics, terrorism and natural disasters such as last year's tsunami. A successful summit could generate the political will for advancing regional co-operation. Moreover, to its advocates at least, an east Asian framework has greater coherence than unwieldy Asia-Pacific institutions such as the Asia-Pacific Economic Co-operation forum, whose own annual summit, held in South Korea last month, was attended by George W. Bush, US president.
The exclusion of the US from the east Asia summit cuts both ways. It projects a sense of east Asian identity, but causes some friends of America to worry about Chinese dominance. Indeed, this concern is what prompted Japan, Singapore and Indonesia to push for bringing India, Australia and New Zealand into the summit.
To be sure, America's concerns about the summit will be well defended by its friends, especially Japan, which under the Koizumi government has strengthened its bilateral security alliance with the US. Japan (as well as India) is interested in developing a future east Asian community through the larger summit framework. By contrast, China would prefer to develop such a community through the narrower Asean plus three (APT) process, which excludes Australia, New Zealand and India.
Washington has been outwardly cool about the summit. Eric John, deputy assistant secretary of state for east Asia, described the summit as too much of a "black box" for Washington to even realise what it is missing out on. But there remain in US policy circles long-term concerns about a regional grouping that excludes the US.
Last June, Donald Rumsfeld, US secretary of defence, urged advocates of Asian regional co-operation not to exclude the US. In a September speech, Robert Zoellick, deputy secretary of state, warned that American concerns about China "will grow if China seeks to manoeuvre toward a predominance of power [in east Asia]". He instead urged Asean, Japan, Australia and others to work with the US "for regional security and prosperity through the Asean regional forum and the Asia Pacific Economic Co-operation forum".
Hence, the Kuala Lumpur summit was not only a test of the region's ability to engage China without courting its dominance. It might also be a means for some of America's friends to remind Washington of the need to stay involved in the region despite its preoccupation with Iraq and emerging signs of isolationism in the American public.
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[FT Syndication Service. — The writer is deputy director of the Institute of Defence and Strategic Studies, Singapore. This article is based on a recent speech to the International Institute for Strategic Studies in London]
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