Major international crises often produce tectonic shifts in international relations. Under pressure from key European counterparts, President Bush has agreed to a "new Bretton Woods" summit on Nov. 15.

It would be hard to overstate the potential significance of this meeting. The first Bretton Woods, in 1944, set the rules for monetary relations among nations, and it created the International Monetary Fund (IMF) and the World Bank.

While European leaders are pushing for greater regulation and a major overhaul of the international financial order, US policymakers have been lukewarm, emphasizing the preservation of free-market capitalism. This transatlantic drama has obscured the more fundamental problem—how to accommodate the historic shift of economic power away from the West toward Asia.

Including India, broader East Asia encompasses more than half of the world's population. The region already accounts for about one-third of global economic output, oil consumption, and CO2 emissions, and this is only likely to grow in the future. Over the course of the 21st century, Asia's economic and geopolitical weight in the world will, in all likelihood, come to rival that of Europe in the 19th century. Asian problems will become increasingly indistinguishable from global problems.

In the face of such dramatic change, the IMF and World Bank are becoming relics of a bygone era. At the time of their creation, by US and European negotiators, the major challenge was to get capital flowing from the US to war-ravaged Europe. The days of the US as creditor state are long gone—our massive current account deficit is financed by importing nearly $1 trillion in foreign capital every year. Major US banks are being rescued by sovereign wealth funds and financial institutions from the Middle East and East Asia. China and Japan alone held over $600 billion of securities issued by Fannie Mae and Freddie Mac, making the bailout of those institutions a major foreign policy issue.

Despite these changed realities, both Bretton Woods institutions remain dominated by the West. By convention, the IMF is led by a European, the World Bank by a US national. The US is the only country with veto power over important decisions in either body.

My analysis of voting shares in the IMF indicates that the Allied powers of World War II have been consistently overrepresented compared to Axis powers despite the passing of more than 60 years since the end of that war. Studies show that IMF lending is biased in favor of recipients with strong economic and diplomatic ties to the US and key European states at the expense of other members.

This unbalanced representation had real consequences during the Asian Financial Crisis of 1997-98, when the IMF, as part of its rescue operation, implemented policies widely viewed as contrary to Asian interests. During the crisis, Japanese financial authorities proposed an Asian Monetary Fund as a potential alternative source of liquidity. This proposal was rejected by US officials, who feared dilution of IMF authority. However, over the past decade, East Asian states have stockpiled foreign currency reserves and developed regional cooperation that may eventually develop into a credible alternative to the IMF.

The IMF and World Bank should be reformed to better reflect the interests and concerns of rising economic powers. Voting shares need to be further redistributed to reflect underlying economic realities. Decisionmaking rules should be modified to give greater weight or agenda-setting authority to regional actors—the US may have a strong interest in loans to Mexico, but Japan may have a greater stake in Indonesia. Assignment of the top positions should be made truly competitive. Core functions should be decentralized—both institutions are headquartered in Washington, impeding employment of top talent from Asia and limiting intellectual exchange.

An international financial architecture that fragments or remains centered on the West as Asia rises will probably prove grossly ineffective. Europe attempted much the same during the turbulent period between the two World Wars, resurrecting a system based on British hegemony even as Britain was in relative decline. Those were scary times, with free riding and beggar-thy-neighbor policies feeding mutual distrust and economic catastrophe.

This will not be the last financial crisis we face. Next time, ad hoc cooperation by the US and Europe may prove insufficient. Franklin Roosevelt had the foresight to include China on the United Nations Security Council long before that nation became a geopolitical heavyweight. Similar foresight should be brought to bear as world leaders debate the future of the international financial architecture.

The inaugural (March 2008) issue of PRISM, an undergraduate journal published by the University Scholars Programme (USP) of the National University of Singapore (NUS), carries a dozen essays. Six were written by Stanford undergraduates for a Stanford Overseas Seminar taught in Singapore in September 2006, and six by NUS undergrads in the USP for an NUS course taught at Stanford in May 2007.

The Stanford students, their paper topics, and brief summaries of their conclusions follow:

Jenni Romanek examined Singapore’s national identity. She found that Singaporeans “embody certain shared attributes of national identity, but they do so on a superficial level … If the government truly wishes to impart upon citizens a Singaporean identity, it must allow them to cultivate and define it, at least in part, by themselves. This necessitates a level of self-expression that is not currently acceptable by government standards.” She ended her essay by asking, “Without free speech, whose identity are Singaporeans representing?”

François Jean-Baptiste examined Singapore’s efforts to inculcate national identity through the school curriculum. He found the education ministry’s top-down methods “generally unsuccessful” and recommended a more student-and-teacher-driven approach. “The real and representative Singapore narrative,” he wrote, involved the ambitions of a wide range of Asian immigrants including “Filipina maids,” “Malay Muslims,” and “opposition leaders like J.B. Jeyaretnam and Slyvia Lim.” Education in the city-state’s secondary schools, he concluded, “should and can incorporate that story.”

Lauren Peate studied the “Four Million Smiles” campaign launched in the run-up to the annual meetings of the International Monetary Fund and the World Bank held in Singapore in September 2006 while the Stanford seminar was in progress. She found general public support for the campaign except among “young, [more] educated, and electronically connected” Singaporeans, one of whom told her, “We trust the government but it doesn’t trust us [to smile without being told to].” She ended by wondering how the authorities would choose to deal with a young generation of bloggers with critical minds.

Jon Casto explored Singapore’s efforts to instill an entrepreneurial culture despite a general aversion to risk (and a preference for state employment) “perpetuated through cultural norms, the labor market and [government-linked corporations].” He also, however, found entrepreneurship in Singapore “slowly on the rise” and argued that “today’s experiences” in promoting it “may bear tremendous fruit” if and when the economic climate because problematic enough to demand “that Singaporean individuals, not just the [People’s Action Party] government, provide solutions.”

Alexander Slaski researched the implications of illiberal politics for environmental policy in Singapore. He credited the government with having provided its citizens with a high quality of life, including “excellent environmental governance” from the top down. But he was struck by an artifact of the government’s relatively authoritarian approach to being green: the virtual absence in the city-state of a bottom-up or civil-society movement for conservation. To that extent, he concluded, “the authoritarian elements of the government have kept environmental protection from being as strong as it could be.”

Sam Shrank investigated the status and future of renewable energy. Singapore had previously managed to secure for itself “a constant and assured flow of oil and natural gas from abroad at reasonable.” But “peak oil—the year in which the supply of oil peaks—is in sight, and the end of natural gas is not far behind.” Oil and gas prices, he warned, will rise as demand outpaces supply. Amply sunlit as it is, Singapore could and should be doing much more to exploit sources of renewable energy sources, and solar (photovoltaic) energy in particular.

Compared with these essays, the Singaporean students’ essays in PRISM were no less diverse. If the Americans concentrated single-mindedly on Singapore, in keeping with the focus of the Stanford seminar, the Singaporean contributors were more inclined to compare American conditions and experiences with those in their own country.

Dan Goh, the NUS professor who taught the Singaporeans at Stanford, introduced the student essays. His thoughts are excerpted here:

"Reflections on Western civilization have often found themselves seduced by the idea of the American exception. … It seems ironic therefore that a group of American students would travel to this island to study what they have termed as the Singapore exception. Seen in the immediate context of Southeast Asia, Singapore is indeed an exception [whose] culturally diverse [im]migrants [have transformed the city-state] into a forward-looking nation. With little historical gravitas except for founding moments and fathers, it is a young nation filled with anxieties and self-doubt. Yet, it is resolute in forming its citizenry through clever ideological campaigns and in engineering visionary technological and economic projects based on successful foreign examples. For all its democratic institutions, it is beset by political elitism and illiberal tendencies. Despite its Edenic ideals and scientific prowess, it is reluctant to pursue environmental sustainability. These are the themes and contradictions tackled in the articles by the six young American scholars featured in this inaugural volume."

"But if we look closer, these themes and contradictions describe America as well. I have always suspected that the study of the exceptional other is always the study of our self as normal when the two are actually much more similar than they are different. Irony has a way of turning in on itself. However, the American students’ essays show that there is a major difference at the heart of comparing the American and Singapore exceptions."

"Given the American political culture of suspicion of state authority, it is not surprising that [in the Stanford students’ essays] the state sticks out visibly in the landscape of Singapore society. For the Singaporean students traveling to the Bay Area however, the feeling is best described by the excitement and trepidation of a Western naturalist traveling from sedate urban London to the rich jungles of Borneo. The state monolith fades and vibrant cultural diversities, intriguing identity evolutions and self-organizing chaos beckon. But always with Singapore in their minds, the young scholars reflected their study of Silicon Valley and San Francisco back unto Singapore. What they found was that the same diversities, evolutions and chaos were also evident in Singapore, but with the roots of the state apparatus sunk deeper into the rich soil here."

"Singapore is not anything like America and yet is everything American, except for the leviathan that stands over our shoulders. Nonetheless, the diversities and hybridities of vernacular everyday life continue to grow as ideas, images and identities speed around the global circuits of capitalism, … connecting young people across the deep Pacific …"

In his own preface to the PRISM issue, SEAF Director Donald Emmerson, who taught the Stanford seminar in Singapore, had this to say:

“In Praise of Bad Teaching.” Years ago at the University of Wisconsin-Madison I pinned a page of text under that title to a bulletin board next to my office door. The author argued that bad teachers were really good teachers because their boring lectures drove their students out of the classroom and into the real world where real learning could occur.

The argument is not wholly facetious. Conventional undergraduate education is notoriously indirect. Independent field work is the preserve of professors and graduate students. Undergraduates sit, listen, read, take notes, and take exams. Technology—the ability to google—has reduced the teacher’s ability to control information. But in standard classrooms, it is still the teacher who selects, interprets, and conveys knowledge, and who then tests and grades its retention. In humdrum pedagogy at its worst, the professor and the student are, respectively, faucet and sponge. A charismatic lecturer—a supposedly “good” teacher—may fill lecture hall seats only to reinforce the enthralled passivity of the sitters.

Fortunately, the National University of Singapore and Stanford University are not conventional institutions. Both campuses encourage their students to go abroad. Professors are not dispensed with. But by affording students direct contact with foreign cultures, NUS and Stanford necessarily challenge the teacher’s span of control. In that loss of unquestioned professorial authority lies a chance for serious learning by students and teacher alike. …

For lack of space, alas, we could not [publish in PRISM] all thirty essays written for our seminars. But those that are printed herein should give readers a feel for what happened when two sets of undergraduate students were “turned loose” on each other’s turf. I am grateful to [Dan Goh and the other individuals who made this issue and the seminars possible] and above all to both complements of students, including those not represented in these pages, for giving me one of the most enjoyable and memorable “teaching”—that is to say, learning—experiences of my life.

PRISM is not available on line, but it can be ordered (stock permitting) from

The Editor, PRISM
University Scholars Programme
National University of Singapore
BLK ADM, Level 6,
10 Kent Ridge Crtescent
Singapore 119260

Walking down a side street in Shanghai’s French Concession, a partially preserved corner of that city’s gloried and turbulent past, visitors come upon an ivy-covered house that served as the headquarters for the Shanghai branch of the Communist Party in the 1940s. Here the spartan quarters of Mao’s second in command, Zhou Enlai, are carefully preserved, the narrow beds and wooden desks evoking a simpler, revolutionary China.

A short ride away, across the murky waters of the Huangpu River, monuments to the new China are being erected in what was farmland less than two decades ago. The Pudong New Area, with its clusters of highrise office towers and multi-story shopping malls, is emblematic of the rush to wealth and economic power that now drives China.

These were among the images from a visit to China by a delegation of scholars from the Walter H. Shorenstein Asia-Pacific Research Center from April 8–14, 2007. Though time was short, the group managed to visit Shanghai, Hangzhou, and Beijing.

Fulfilling Shorenstein APARC’s mission to carry its work “into Asia,” the delegation met senior officials from government and business and held wide-ranging exchanges with Chinese scholars and policymakers at leading universities and research institutions. The conversation ranged from China’s development strategy to the current state of relations between China and its longtime rival and neighbor, Japan.

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The trip started in Shanghai, a dynamic center of finance and industry that has drawn in many Stanford graduates. State-owned enterprises such as Baosteel, one of the world’s largest steel producers, are in the midst of becoming players in the global marketplace. From Baosteel’s sprawling complex of docks, blast furnaces, and rolling mills along an estuary of the Yangtze River, products are now being dispatched around the world. In a meeting, the leadership of the Baosteel Group expressed an eagerness to tap into the educational and training opportunities offered at Stanford University.

Shanghai is not only the business capital but also a political center, rivaling Beijing. The Shanghai Institute for International Studies is an unofficial foreign relations arm of the Shanghai government. Shanghai Institute scholars are also players in national policy debate on many key issues facing China, such as relations with Taiwan, with Japan, and even with the Korean peninsula.

The scholars presented their views on a wide range of issues, from the preparations for the 17th Congress of the Communist Party this coming fall to emerging structures of regional integration in East Asia. Professor Xu Mingqi, who is also a senior leader of the Shanghai Academy of Social Sciences, explained that China’s development strategy is shifting toward a more balanced approach. Whereas local government officials previously were pressed to meet targets for GDP growth, foreign investment, and export volume, now they must also raise employment levels, close the growing income gap, and provide social security.

Hangzhou, considered one of the most beautiful cities in China, is a two-hour drive south of Shanghai. The modern roadway passed a tableau of the suburbanization of this part of China’s countryside, with multi-story brick homes mushrooming amidst the fields. The delegation arrived at Zhejiang University, considered among the best of China’s provincial higher educational institutions and growing rapidly in size and scope.

The Shorenstein APARC delegation met with faculty members from Zhejiang’s social science departments, who briefed the delegation on their research work in areas such as distance education, international relations, Chinese history, even a school of Korean studies. Zhejiang is also the site of a new research institution, the Zhejiang Institute for Innovation (ZII), founded by Stanford engineering graduate Min Zhu, a Silicon Valley entrepreneur who is determined to bring the lessons of Stanford and the valley to his home province and his undergraduate alma mater. ZII aims to foster applied research that can tie the university to the vibrant entrepreneurial culture of Zhejiang province. Shorenstein APARC researchers may soon be carrying out fieldwork in this laboratory of change, based at ZII.

Beijing, however, is still the place that matters most in China, not only in the realm of government but also when it comes to academic scholarship. The delegation met with two of Shorenstein APARC’s longtime corporate affiliates in China—PetroChina, the state-owned oil and gas giant, and the People’s Bank of China. Shorenstein APARC dined with a lively group of Chinese journalists, organized by former Stanford Knight fellow Hu Shuli, the editor of Caijing Magazine, considered China’s leading independent business publication.

The substantive task was to forge new ties with key research institutions. The current state of China’s development strategy was again on the agenda when the delegation met with senior officials from the National Development and Reform Commission (NDRC), formerly China’s State Planning Commission. Alongside the NDRC, the delegation met as well with the leadership of an offshoot of China’s State Council, the China Development Research Foundation, which is doing important work in promoting good governance in areas such as poverty alleviation, nutrition, and budgeting. Those conversations were echoed later in our meetings with scholars from Peking University’s School of Government.

Shorenstein APARC’s own China program, as Oi explained, is focused on understanding the tensions that arise as China grapples with the consequences of its rapid economic development. Out of the meetings in Beijing, an ongoing dialogue has begun, to be advanced this summer with a visit from a NDRC delegation and in the fall with an international conference at Stanford on China’s Growing Pains.

The delegation also engaged in frank and useful exchanges on a variety of international relations issues. We had an extended meeting with scholars and leaders of the China Reform Forum (CRF), a think-tank associated with the Communist Party’s Central Party School, the premier institution for training party leaders and officials. The CRF is credited with authoring important concepts such as the foreign policy doctrine of China’s “Peaceful Rise.” These discussions were followed by a visit and exchange with scholars from Peking University’s widely respected School of International Studies.

The scholars shared analysis of the current state of the North Korean nuclear negotiations, as well as evaluating the outcome of Chinese Premier Wen Jibao’s visit that week to Japan. Over dinner with CRF Vice Chairman Ding Kuisong, the conversation turned to the American presidential politics and the future direction of U.S. foreign policy.

Professors Blacker, Shin, and Oi also met with senior officials of Peking University, as part of an ongoing dialogue about cooperation between these two premier institutions of higher education.

We are pleased to bring you the third article of the academic year in our series of Shorenstein APARC Dispatches. This month's piece comes from Dr. Phillip Lipscy, FSI Center Fellow and Assistant Professor, Political Science. Lipscy joined Shorenstein APARC in fall 2007 and his research interests focus on international relations and political economy, particularly as they relate to Japan and East Asia. He has been a Shorenstein APARC affiliate since his undergraduate years, when he studied under Professor Emeritus Danial Okimoto. He attended Harvard University for his doctoral studies.

Since the end of World War II, East Asia has often been characterized as a region with weak international organizations. There has been no regional integration project comparable to the European Union (EU). Cooperation on a wide variety of issues has tended to be ad hoc rather than institutionalized. Regional organizations, such as the Association of Southeast Asian Nations (ASEAN), have generally been weak or limited in scope, with some notable exceptions such as the Asian Development Bank.

However, in recent years, there are indications that the pattern of institutionalization in Asia is shifting. Since the end of the Cold War, regional cooperative arrangements have emerged and grown. With the addition of China, Japan, and South Korea, a revitalized ASEAN+3 is becoming a locus of economic cooperation. Many observers believe the Six Party Talks could be institutionalized to manage a broader set of security issues beyond North Korea. The Chiang Mai Initiative, a multilateral currency swap arrangement, might eventually develop into a monetary fund. Bilateral trade agreements are proliferating and could ultimately produce a regional free trade zone.

Under the right circumstances, regionalism can complement the broader global order. However, to a significant extent, recent regional initiatives reflect an underlying dissatisfaction with the global institutional architecture. The Chiang Mai Initiative emerged after the Asian financial crisis, from a widespread sense that the International Monetary Fund (IMF) underrepresented Asian interests and therefore imposed overly harsh conditionality on the affected states. Paralysis at the Doha Round negotiations of the World Trade Organization (WTO) has facilitated the rapid expansion of bilateral trade initiatives. The North Korean nuclear problem is precisely the sort of collective security issue the United Nations (UN) Security Council was envisioned to deal with, but the rigidity of both Security Council membership and its decision-making procedures has rendered this impractical.

Historically, international organizations have often exhibited path dependence, or a resistance to change. For example, the permanent members of the UN Security Council still remain the victorious powers of World War II. The distribution of voting shares in the IMF and World Bank has consistently overrepresented inception members such as Canada, France, and the United Kingdom, at the expense of both the defeated powers of World War II and newly independent and developing states. The Organization for Economic Cooperation and Development (OECD) remains a predominantly European institution despite the rapid growth of Asia. Across a wide range of international organizations, Asian nationals continue to be underrepresented among employees, and in some cases leading positions are allocated to Western nationals by convention, as in the IMF and World Bank.

However, as Asia continues its rapid growth, the active involvement of Asian states in the global order will become paramount. Including India, broader East Asia encompasses more than half of the world's population. The region already accounts for about one-third of global oil consumption and CO2 emissions, and this is only likely to grow in the future. By 2020, in purchasing power parity terms, regional GDP will likely exceed that of the United States and the EU combined. Over the course of the twenty-first century, Asia's economic and geopolitical weight in the world will, in all likelihood, come to rival that of Europe in the nineteenth century. With Asia's dramatic rise, Asian problems will become increasingly indistinguishable from global problems.

Thus, a critical question in the coming decades will be whether the contemporary international organizational architecture will be able to smoothly incorporate the rising states of broader East Asia. Sweeping geopolitical shifts have often created instability in the international system -- the waning of Pax Britannica in the early twentieth century precipitated two world wars and a global depression, as the world lacked a geopolitical and economic stabilizing force in times of crisis. If universalistic institutions such as the UN, IMF, and WTO are seen as unresponsive to Asian concerns, two potentially destabilizing outcomes are likely. First, Asian regional cooperation may further intensify. For example, a full-fledged Asian Monetary Fund that acts independently of the IMF could be formed, or an Asian Free Trade Area established. Such institutions have the potential to undermine existing international organizations such as the IMF and WTO. Eventually, Asian institutions may supersede existing global institutions, but only after contestation and needless replication. A second destabilizing outcome could be that Asian states disengage from the U.S.-backed international order without developing strong regional institutions. This might create a situation akin to U.S. nonparticipation in the League of Nations in the interwar years. Without active involvement of some of the most important players, international organizations will become less effective at facilitating cooperation and resolving major disputes. International relations will become more anarchic and cooperation more ad hoc.

The rise of Asia will likely provide the first major stress test for the global organizational architecture that the United States has constructed and underpinned since the end of World War II. Of course, there are also some grounds for optimism. Among other things, China and Vietnam have joined the WTO, ongoing IMF quota revisions have produced ad hoc increases to South Korea and China, and Asian nationals increasingly play important roles in major international organizations -- e.g. UN Secretary General Ban Ki-moon and former UN High Commissioner for Refugees Sadako Ogata. It is paramount that concerns about Asian representation and interests in universalistic international organizations be addressed so that the rise of Asia contributes to -- rather than undermines -- the stability of the international order.