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		AMERICA'S ASIAN "BERLIN WALL" HAS CRUMBLED Thanks largely to American Cold War politics, Asia has been fed a steady diet of undemocratic regimes and corrupt leaders. No wonder the current economic turmoil has been such a shock to their systems. BY JONATHAN BRODER | "Everything is going to be fine." That's the message that President Clinton has been urgently attempting to convey about the economic turmoil engulfing Asia. But is it? Last week, the 18-nation Asian Pacific Economic Cooperation summit endorsed a $78 billion International Monetary Fund rescue plan that will likely mean severe austerity for a number of economically troubled Asian nations. Meanwhile, economic analysts have been at pains to assure us that Japan is not on the verge of an economic meltdown, despite the closing of the country's fourth-largest brokerage firm, Yamaichi Securities, and what appears to be a rather shaky banking system. Salon spoke with Patrick Smith, author of the critically acclaimed "Japan: A Reinterpretation" published by Pantheon Books earlier this year. Smith, a former correspondent in Asia for the New York Times, the International Herald Tribune and the New Yorker says Asia's current turmoil is not temporary, and may be the beginning of a seismic regional shift that could take years to play itself out. At last week's APEC summit, President Clinton referred to the turmoil in Asia as "a few little glitches" and then later seemed to be more serious about its implications. Which assessment do you think is the correct one? I think it's a fundamental shift. It represents what the writer Robert Shaplen would have called "the turning of the wheel." Put another way, our Berlin Wall in Asia has fallen. It was a wall not made out of bricks but out of corrupt forms of capitalism and papier-mâché democracies. Their leaders existed under glass for 50 years. They thought they were political leaders. They were not. They were redistributors of wealth and corruption and money changers, basically. And they were our clients; they were our satellites, with all that implied. What's happening now is that globalization has come to Asia, and the party's over. How badly is the party going to end? There's talk of a new domino theory in Asia, in which the cycle of currency devaluations, bankruptcies and austerity measures sap the political strength of the countries involved. Is it that serious? Yes, it is. The deal in Asia was always implicit: You get plenty to eat -- an attractive thing to Asians because poverty was so endemic for so many centuries -- and we run things. You don't get democracy, but you get a big bank account. That was the social contract. The problem was, to keep the deal going, high growth has to be maintained at all costs. During a recession, the public works projects in Malaysia and these countries were just flabbergasting. They pulled out all the stops because everybody had to work, everybody had to have a rising income, no matter whether the growth rate came from manufacturing, trade or public works spending. Now that the equilibrium that had to be maintained between political peace and economic growth is breaking down. The question now is: Where are these guys going to run to? And where do you think that will be? It's hard to predict. These economies are not going down the tubes, but they're going to have to absorb a lot of shock. One of the most important questions is political leadership. The way we ran Asia during the Cold War was not conducive to producing qualified leaders. Stability was the first priority, not democracy. Basically our attitude was that good, solid anti-communist thugs would do just fine. Look at (Indonesian President) Suharto. He's had to go to the International Monetary Fund for a bail-out, but he's not too pleased about it. He has the banks of his sons and daughters to think about. You're saying the implications are more political than economic. Yes. Over the long term, these countries will emerge from this either more authentically democratic, instead of just pretend-democratic, or they will be pronouncedly more authoritarian. And America will have a lot to answer for. I'm not one of these people that says it's all America's fault, but looking at this clearly and with a decent regard for history, a lot of this can be placed at our doorstep. A lot more than we're talking about in our newspapers, that's for sure. N E X T+P A G E+| The Japanese domino