Stanford University

The Foxy Art of Herding Dragons: How Sly Asian Leaders Pulled off Politically Difficult Economic Reforms

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Major economic reforms are often politically difficult.  They may cause pain to voters and provoke unrest.  They may be opposed by politicians whose time horizons are shortened by electoral cycles.  They may collide with the established ideology and long-standing practices of an entrenched ruling party.  They may be resisted by bureaucrats who fear change, and by vested interests with stakes in the status quo.  Obstacles to major economic reform can be daunting in democratic and autocratic polities alike. 

And yet, somehow, past leaders of today's Asian dragons did manage to get away with critical and creative economic reforms.  Sly political foxes nudged their countries onto high-growth paths toward global renown as economic dragons.  What lessons can be learned from their experiences?  Are tactics that worked in authoritarian systems applicable to democratic ones, and vice versa?  Can one identify a set of stratagems that would amount to an equivalent, for economic reformers, of the advice Machiavelli gave political princes? 

Arroyo will recount the crafty political maneuvers used by leaders of economic reform in Asia during these pivotal eras:  China under Deng Xiaoping; India in the 1990s; Thailand under General Prem Tinsulanonda; Vietnam's Doi Moi; South Korea under Park Chung Hee; Malaysia under Mahathir Mohamad; and Singapore under Lee Kuan Yew.  Arroyo's remarks will be drawn from the paper he has been writing at Stanford on "The Political Economy of Successful Reform: Asian Stratagems," which he describes as "a playbook of useful maneuvers for economic reformers."

Dennis Arroyo is presently on leave from his government post as a director of the National Economic and Development Authority (NEDA) of the Philippines.  He has held consultancies with the World Bank, the United Nations, and the survey research firm Social Weather Stations, and has written widely on socioeconomic topics.  His critique of the Philippine development plan won a mass media award for "best analysis."  He has degrees in economics from the University of the Philippines.  

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Dennis Arroyo

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Shorenstein APARC/Asia Foundation Visiting Fellow
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Dennis Arroyo is a corporate affiliate visiting fellow at Shorenstein APARC for 2007-08. Prior to joining Shorenstein APARC, he worked as the Director of National Planning and Policy Staff at the National Economic and Development Authority in the Philippines. Arroyo also formerly worked as a consultant for the World Bank in Washington DC and the World Bank office in Manila. Arroyo has spent much of his career in survey research with Social Weather Stations (SWS), which is a prominent organization in the World Association for Public Opinion Research (WAPOR).

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Dennis Arroyo 2007-2008 Shorenstein APARC/Asia Foundation Visiting Fellow Speaker Shorenstein APARC
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Southeast Asia Program

The Politics of North Korea in Japan

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This talk will examine the evolution of Japanese attitudes and policy toward the Korean peninsula.

The legacy of Japan's occupation; divisions in Japan's Korean community and the spillover into Japanese domestic politics; the impact of the abduction issue and the North Korean nuclear and missile programs on Japanese attitudes toward Pyongyang will be looked at. The current state of relations, with a focus on the divisions between Tokyo and Washington on how to proceed, will also be discussed.

Ambassador Deming joined the School of Advanced International Studies at Johns Hopkins Universtiy in September 2005, after a 38 year career in the Foreign Service. His last overseas post was as Ambassador to Tunisia from 2000 to 2003. Prior to that, he served as Principal Deputy Assistant Secretary of State for East Asian and Pacific Affairs (June 1998 to August 2000). He was Senior Advisor to the Assistant Secretary for East Asian and Pacific Affairs from December 1997. From October 1997 to December 1997, he was the East Asian and Pacific Affairs Bureau’s Senior Advisor to the United Nations General Assembly in New York.

Ambassador Deming has spent much of his career dealing with Japanese affairs, having served in Japan as Charge d’Affaires, ad interim, from December 1996 to September 1997, and as Deputy Chief of Mission from October 1993 to December 1996. From September 1991 to August 1993, Amb. Deming was Director of the Office of Japanese Affairs in Washington. He served as Minister Counselor for Political Affairs at the American Embassy in Tokyo from August 1987 to July 1991. From 1985 to 1986, Amb. Deming was detailed to the National War College at Fort McNair in Washington, DC.

He received his M.A. in East Asian Studies from Stanford University and B.A. from Rollins College.

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Ambassador Rust Deming Adjunct Professor, Japan Studies, SAIS, Johns Hopkins University Speaker
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Korea Program

Multilateralism in Northeast Asia: Combining Values with Security

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In the midst of leadership changes and rethinking of the Six-Party Talks, the time is ripe for reassessing how multilateralism can be advanced in Northeast Asia. The earlier stress on economic integration as the engine of regionalism has lost credibility, although the forces of interdependence continue to grow. The tendency to treat security in isolation also may be receding, as the Six-Party Talks and Sino-U.S. relations both reveal the multi-sided nature of building trust. At the same time, the pessimism associated with overemphasis on the history issue between Japan and its neighbors has receded in the face of renewed Sino-Japanese and South Korean-Japanese diplomacy. Yet, finding common ground in strategic thinking about the future of multilateralism demands a new approach that takes into account lessons from recent years.

As the building blocks of a new approach, this presentation will focus on four themes: 1) re-examination of ways to accelerate regionalism, with attention to leadership, energy cooperation, and the role of Russia; 2) development of a more comprehensive outlook on values, with attention to shared modernity, gradualism, and the role of Japan; 3) discussion of the next phase in managing North Korea, attentive to Sino-U.S. accord and the role of South Korea; and 4) evaluation of U.S. priorities and how a new president may view Northeast Asia within an overall agenda.   The objective of this talk will be to stimulate thinking on a region at a crossroads in order to capitalize on recent currents of change.

Gil Rozman attended Princeton's Critical Languages Program, returning to Carleton College as an independent major in Chinese and Russian studies. He received his PhD in sociology at Princeton with a field on Chinese, Japanese, and Russian societies and a plan to concentrate on historical comparisons first and on the domestic roots of international relations later. His books have appeared in clusters, including: four on comparative pre-modern urban development and stages of modernization; three on debates in the Soviet Union, China, and Japan over bilateral relations and changes in socialism; two on regionalism; and four on strategic thinking in Northeast Asia. Although he is still learning about Korea, many recent writings have looked at Korea within a regional context.

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Gil Rozman Professor of Sociology Speaker Princeton University
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Sneider: Cautionary lessons for U.S.-Korea relationship

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%people1%, associate director for research at Shorenstein APARC, gives a few cautionary lessons on U.S.-Korea relations.
Earlier this month I visited Seoul as a member of “New Beginnings,” a study group of former American policymakers and experts on Korea, co-organized by the Shorenstein Asia-Pacific Research Center at Stanford, and The Korea Society. We formed this group last year, anticipating that the upcoming Korean elections and the American presidential elections afterwards would offer an opportunity to embark upon a “new beginning” in our alliance.

After several days of meetings in Seoul, most importantly with President-elect Lee Myeong-bak and his senior advisors, we came away convinced that our hopes for a “new beginning” were more than justified. As President Lee takes office, it is clear that his administration is deeply committed to restoring the alliance to its previous place as the foundation of Korean foreign and security policy. Equally important, the new government is focused on the need to boost economic growth based on the free flow of trade and investment, and sees the conclusion of the Free Trade Agreement with the United States as central to that goal.

For those of us who have long argued that a vibrant Korea is vital to America’s interests, these were welcome words. It is no secret that there was a perception in the United States that President Roh Moo-hyun, backed by a significant portion of the Korean people, no longer saw the alliance as a strategic imperative for Korea. Unfortunately, many Americans, particularly in Congress, had begun to share this view of the alliance, fueled by a mistaken belief that Koreans were “anti-American.”

This view of President Roh and of Korea was unfair and even distorted. President Roh deserves credit, particularly in the last two years, for taking important steps to improve alliance relations, not least his promotion of the negotiation of the FTA. He made unpopular decisions, such as the dispatch of troops to Iraq, in order to preserve a cooperative atmosphere. And as we saw demonstrated in the election, public opinion in Korea regarding the United States has shifted dramatically since the emotional days of 2002.

The Lee administration can anticipate a warm greeting in Washington, as is already clear in the preparations for his visit next month. The new President has sounded all the right notes – seeking closer cooperation on North Korea policy, restoring positive ties with Japan, America’s other vital ally in Northeast Asia, and building a broader strategic partnership with the U.S. beyond the Korean peninsula.

Amidst the renewed embrace of the alliance, it is worth however keeping a few cautionary lessons from the past in mind:

1. Not everything will be Smooth Sailing

Despite the welcome official rhetoric, it is no secret that the relationship between the United States and the Republic of Korea has never been entirely smooth. From its earliest days, born out of Korea’s liberation and the trials of the Korean War, the alliance has been marked by both close cooperation and by clashes over key policy goals. While bound together by strategic necessity, the national interests of Korea and the United States have not always been identical.

There is nothing unusual about such differences among allies. Look for example at the tensions that plagued U.S.-European relations over the disastrous decision to invade Iraq. Even with the best of intentions, there will be moments of conflict between Seoul and Washington. What is important is how governments manage those differences to protect the underlying relationship. Both Koreans and Americans need to remember the virtues of quiet diplomacy, trying to avoid negotiating their differences through the media.

2. All politics is local

Alliance relations can no longer be managed solely by diplomats or by friends meeting behind closed doors. Those ties are crucial but both Korea and the United States are democracies in which the issues that are at the core of the relationship – from trade to the alignment of military forces – are matters of public discussion. Domestic politics shapes policy decisions but both Koreans and Americans sometimes forget the pressures operating on the other side.

This is particularly important in an election year. The Korean National Assembly election in April is already having an impact, delaying ratification of the FTA. The U.S. election will mean FTA ratification by the U.S. Congress this year may be impossible. Presidential candidates are taking positions that they may adjust after gaining power. On another level, the new government in Seoul needs to remember that the Bush administration is a lame duck affair and begin to prepare for a new government in Washington.

3. Expect the Unexpected, particularly with North Korea

The limited progress on the nuclear negotiations with North Korea has temporarily brought closer coordination between Korea and the US. But it would be foolish to assume that this trend will necessarily continue. The negotiations are already facing a slowdown as negotiators grapple with much tougher problems. If they break down, both Seoul and Washington, along with their other partners in the 6-party talks, will face some hard questions about how to respond. Any attempt to pressure Pyongyang is likely to bring an escalatory response, not least to test the new government in Seoul.

It is possible that Seoul and Washington will once again be somewhat out of synch. Ironically, the Bush administration – and whatever follows it -- may favor greater concessions than the new administration in Seoul would prefer to make.

These differences are manageable. The key is real policy coordination between the US and Korea – and the inclusion of Japan in a revived trilateral coordination mechanism. If both sides keep that commitment, we will indeed have made a “new beginning” in our alliance.

Daniel Sneider is the Associate Director for Research at Stanford University’s Walter H. Shorenstein Asia-Pacific Research Center. A former foreign correspondent, Sneider covered Korea for the Christian Science Monitor.
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Bringing students to China helped demystify process of field research, Oi says

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Sometimes doing field research involves dodging cow pies in an actual field. At least, that was the case for a group of Jean C. Oi's students.

Oi discussed the importance of taking students beyond the classroom in a March 6 talk titled "Cow Pies and Democracy: Teaching in the Field," presented as part of the Center for Teaching and Learning's "Award-Winning Teachers on Teaching" lecture series.

Michele Marincovich, associate vice provost of undergraduate education and director of the Center for Teaching and Learning, introduced Oi, calling "Cow Pies and Democracy" the "most colorful title" in the lecture series.

Oi, the William Haas Professor in Chinese Politics, began her talk by laughingly apologizing for her word choice. "I still can't believe I chose that title, but I think it aptly describes what I do with my students," she said.

Oi teaches courses on political change in China, and much of her research has focused on village elections. Though China has been a single-party state since the Communist Party took control in 1949, the country has held direct elections for village officials since the 1980s, a move that has been greeted by some as a possible first step toward a more democratic state.

In 2001, Oi taught a course about village elections for Sophomore College, a three-week summer seminar for incoming sophomores.

Although the class was "very successful," her students kept saying, "I wish we could do this in China," Oi recalled. She agreed.

Without leaving Stanford's campus, "I think it's difficult to convey the different world [the Chinese] are living in," Oi added.

The year after she first taught Sophomore College, Oi had the chance to take students abroad for a class as part of the Overseas Seminar Program.

They spent two weeks at Peking University learning about village elections and China's political situation. They heard guest speakers from the country's Ministry of Civil Affairs, and the students designed research projects requiring them to interview villagers and village officials.

In the third week of the program, Oi and her students took a bus to Heilonjiang, a northeastern province on China's border with Russia. As the bus approached the village, the road became blocked by a long line of carts delivering corn to the local dairy farm. Oi had all the students get off the bus, and they walked through fields and pastures to get the rest of the way to the village.

"This is where we had to dodge the cow pies," Oi explained.

Oi characterized what she did with her students as "demystifying" the process of doing research. Students learned how to interview people in the field.

"When we got to the village, I said, 'OK! Go!' and they all just scattered," Oi said. "If you set your expectations high, students are going to produce."

Oi's students got to witness a village election. Villagers lined up to mark paper ballots to elect a village committee head. The votes were tallied on a chalkboard, and the winner got 509 votes, just a few more than the runner-up.

Many of the villagers that greeted the students had never seen Americans before, Oi said. "Russians were the only foreigners they had ever seen," she said.

One student was a 6-foot-7-inch Olympic gymnast who drew crowds wherever he went.

"I've seen them on TV, but I'd never seen a real one," one awestruck observer said, marveling at the tall athlete.

Oi said her students felt like they had earned "bragging rights" after their trip to China. "They felt like they had done something none of their peers had done," she said.

One even changed her career plans after the seminar.

"Her parents were very worried about what would happen to her in China, and maybe they should have been," Oi quipped. The student had been planning to go to medical school, but she instead decided to declare a major in political science and study rural China.

"I think I did change some student lives," Oi said.

Oi is also a senior fellow at the Freeman Spogli Institute for International Studies and the director of the Stanford China Program.

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New course on North Korea profiled in Stanford Magazine

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The March/April 2008 issue of Stanford Magazine profiles a new course on North Korea taught by Robert Carlin, a Shorenstein APARC Pantech Fellow. The course, , "Media in North Korea: A Window to Plans, Perceptions and Decisions," is one of only a handful about the Democratic People's Republic of Korea (DPRK) that are being taught nationwide. Although Western observers typically characterize the DPRK as an informational black hole, Carlin encourages students to look beyond the caricatures of "Dear Leader" Kim Jong-Il's elevator shoes, poufed hair, and khaki jumpsuits. "It's not a joke," Carlin says. "It's a real place."
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Dating but Not Married: Southeast Asian Security Responses to the Rise of China

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During the Cold War, China was regarded in many corners of Southeast Asia as a sponsor of subversion and communist insurgency. Until the “four modernizations,” its anemic economy and limited ability to project power offered little incentive for Southeast Asian governments to cozy up to Beijing. Relations were often frosty or worse. Clearly, times have changed. Essentially all of the states in Southeast Asia have robust diplomatic and economic engagements with the PRC. Yet security concerns have not evaporated. Most Southeast Asian governments now embrace China, but “hedge” by setting up fall-back security options with the United States and other partners in case the PRC becomes more menacing.

This seminar will explore some of the nuances in Southeast Asian “hedging” strategies. How do various governments view China’s intentions and capabilities? How have they variously sought to engage the United States and others to gain and retain security without antagonizing Beijing? How do these strategies relate to multilateral diplomacy in ASEAN and related forums, and how do they affect the overall “balance of power” in the Asia-Pacific region? Lastly, what pitfalls might hedging entail? These questions are critical, because the reaction of Southeast Asian states to China’s rise will have a major effect on the shape and stability of regional security for years to come.

John D. Ciorciari is a 2007-08 Shorenstein Fellow and is currently completing a manuscript entitled Hedging: Southeast Asian Alignments with the Great Powers since the Fall of Saigon.  He has extensive work experience in Southeast Asia, both as an academic and as a U.S. government official.  He also served as a Visiting Fellow at the Institute of Defence and Strategic Studies in Singapore in 2003-04.  He holds a JD from Harvard Law School and DPhil from the University of Oxford.

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John Ciorciari 2007-2008 Shorenstein Fellow Speaker
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March 2008 Dispatch - A Short Honeymoon for South Korea's New President

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South Korea’s new President, Lee Myung-bak, was inaugurated on February 25, 2008. President Lee, a conservative former businessman and popular mayor of Seoul, was elected with a wide margin in last year’s December election. During his inaugural address at the plaza of the National Assembly, President Lee declared that Korea is now on the path to becoming an advanced nation. Advancement means reaching the rank of the world’s top countries, both in terms of economic strength and cultural standards. To achieve this task, he called on Korea to move beyond the “age of ideology,” and to enter the “age of pragmatism.” He also pledged to pursue economic revival, to strengthen the alliance with the United States, and to end a protracted stand-off over North Korea’s nuclear weapons.

Since Lee’s landslide victory ended ten years of rule by Korea’s progressive government, he was widely expected to maintain his momentum and to enjoy a long honeymoon, at least during his first year in office. But the reality was quite different, and Lee’s term got off to a rough start. In fact, there are some signs that his honeymoon may soon be over. His approval ratings were in the 70 percent range in the wake of his election, but had fallen to the 50 percent range by the time of his inauguration.

Public sentiment toward President Lee slumped to lukewarm levels mainly because he and his staff mismanaged the two-month transition period between election and inauguration. Hasty announcement of unpopular policies by a transition committee and, more significantly, poor and reckless choices in his cabinet lineup angered the Korean public. The almost daily allegations of wrongdoings by many nominees for minister-level positions raised the serious doubts about the moral standard of a Lee government. Furthermore, his cabinet and top advisers—which consist of people mainly from Seoul and Lee’s native Gyeongsang Province—provoked a sense of alienation among Koreans from other regions of the country.

President Lee’s shaky popularity will be tested in earnest in the upcoming parliamentary elections, which are scheduled for April 5. Until recently, it was predicted that Lee’s ruling Grand National Party would easily take over the majority in parliament, mainly because the April election will be held during the new president’s presumed honeymoon period. As the Korean public has become increasingly disenchanted with the Lee administration, however, the April election will be a tough battle for the ruling party candidates. In fact, the United Democratic Party, the main opposition party that was demoralized and divided by internal rivalry after December’s humiliating defeat, has shown renewed vigor and has taken the offensive against the Lee government. Without a resounding victory in the parliamentary election, President Lee’s governing leadership will be substantially undermined—if not in jeopardy—and he will be plagued further with factional rivalry within the ruling party.

The economy is the most crucial issue facing the Lee presidency. The Korean economy has lost its vitality in recent years, with a GDP growth rate that has stagnated at less than 5 percent since 2003. Though President Lee has pledged to revitalize the economy as his government’s most critical task, current economic circumstances are not favorable for the new president. The Korean economy, heavily reliant upon foreign trade, has been further slowed by the sluggish cycle of the world economy. The new finance minister, Kang Man-soo, has forecast that the Korean economy will again grow less than 5 percent this year, falling short of the 7 percent that Lee pledged during his campaign. Without a visibly improved economic outlook and new job creation, it is highly likely that high public expectation for an economic recovery under President Lee will instead become a major disappointment.

Dealing with unpredictable North Korea is another daunting task for the new government. President Lee has declared his skepticism of the engagement policy pursued by the two liberal governments that preceded him, and accordingly has announced a new North Korea policy initiative: the “Denuclearization Opening 3000 Initiative.” Through this initiative, President Lee showed his commitment to assist North Korea opening its economy, once it gives up its nuclear programs completely. According to President Lee’s vision and as a result of this economic opening, North Korea will be able to upgrade its per capita income to $3000 over the next ten years. The Denuclearization Opening 3000 Initiative clearly shows that President Lee seeks to revamp South Korea’s approach to North Korea, shifting from a policy of unilateral appeasement to a strategy of reciprocity. North Korea has not yet revealed its response to the new policy. But many experts remain unconvinced that the new initiative will succeed in abolishing North Korea’s nuclear weapons program and its nuclear ambitions.

Since its transition to democracy in 1987, one of the key features of Korean politics has been its recurring cycle of high expectation and subsequent disappointment. Every president has begun his term with high approval ratings and ended with lame duck status, due to various scandals and declining popularity. At this point, it is too early to determine whether the Lee presidency prove the exception to this cycle. Perhaps the administration’s rough start will serve as a wake-up call for President Lee and his staff, who must now realize that the Korean public is demanding and tough to satisfy. Korean voters, who overwhelmingly supported President Lee in the December election, are now eager to scrutinize his policies and performance, and have their enthusiasm justified.

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Shorenstein APARC announces new Shorenstein Fellows for 2008-09

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Shorenstein APARC is pleased to announce the winners of the 2008-09 Shorenstein Fellowship. Christian von Luebke and Li Han will join the center in fall 2008, each for a one-year term.

Dr. von Luebke completed his Ph.D. in 2007 in policy and governance at the Crawford School of Economics and Government, the Australian National University. He also holds a masters in Economics and a B.A. in Business and Political Science from Muenster University. He is currently working on a book that analyzes the determinants for local policy variation in Post-Suharto Indonesia. During his stay at the center, he will extend his work on local governance to other Asian transition countries, in particular China and the Philippines.

Li Han is currently a Ph.D. candidate at Harvard University. She expects to receive her Ph.D. in economics in June 2008. She also holds an M.A. in economics from Peking University and a B.A. from Xi'an Jiaotong University in China.

Li Han's primary fields are development economics and political economy. She is particularly interested in political incentives in nondemocracies and public policy issues in developing countries. She is currently working on a project that analyzes the link between economic liberalization and autocracies.

APARC looks forward to their arrival in the fall.

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Li Han

Shorenstein APARC
Stanford University
Encina Hall E301
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Assistant Professor, Hong Kong University. Research Team, Rural Education Action Project China.
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Li Han is an assistant professor of economics at Hong Kong University of Science and Technology. She holds a Ph.D. in economics from Harvard University. Li Han's research interests are development economics and political economy. Her recent work examines the recent wave of centralization reforms in rural education system in China.

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