For better or for worse, the last half of 1997 was an extraordinary period in the annals of East Asia. The financial turbulence that engulfed the region from July onwards served as a catalyst to rekindle the spirit of co-operation among countries in Northeast and Southeast Asia. Amid a global trend towards more integration, the crisis accentuated the importance of closer cooperation among Asian countries. The idea of sticking together in difficult times is no longer a choice but a necessity. But this newfound feeling of solidarity also carries the latent danger of the emergence of a siege mentality and closed regionalism, and ultimately an East Asian trade bloc.

Rejuvenated East Asian Regionalism

It was not surprising that at the informal ASEAN summit in Kuala Lumpur in mid-December 1997, the leaders of ASEAN and those of China, Japan, and South Korea discussed the acceleration of the ASEAN Free Trade Area (AFTA). What had not been expected though was discussion of a possible expansion of AFTA programmes to cover the countries of Northeast Asia as well. It was the first time this broader free trade co-operation within East Asian countries was raised officially and discussed as part of long-term measures to weather the current economic turmoil. Before the economic crisis, the agreed agenda between the leaders of ASEAN and East Asia concentrated on political and security co-operation.

Both Malaysian Prime Minister Mahathir Mohammad and Thai Prime Minister Chuan Leekpai urged ASEAN countries to increase intra-ASEAN trade by buying more ASEAN goods. Mahathir said that by increasing trade with one another ASEAN countries would help each other's economies recover faster.

The ASEAN leaders also asked major world economies and international financial institutions to help them deal with the meltdowns of Asian currencies and stock markets. They specifically named the United States, the European Union, and Japan in addition to the International Monetary Fund, World Bank, and Asian Development Bank as parties who could help.

In recent times Vietnam has had several very good years. The 1989–95 period, which marked the high point of socio-economic reforms after the launching of doi moi (renovation) in 1986, witnessed average annual growth of 7.8 per cent; the development of a multi-sector (mixed) economy; and a significant opening to international markets. This period also saw Vietnam's political reintegration into the world community, marked by normalization of relations with the United States (1994–95), entry into the Association of Southeast Asian Nations (ASEAN) in July 1995, and a growing participation in regional and international organizations. At the same time, it enjoyed an expansion of official aid flows to underpin the country's restructuring and development processes.

Can this success be sustained? Although the recent Southeast Asian currency crisis has had minimal effect on Vietnam, due to its relatively closed and underdeveloped financial sector, the ensuing regional slowdown is likely to highlight Vietnam's problems of competitiveness and restructuring as it integrates further into the world economy. Indications of the deceleration of economic reforms first appeared in mid-1994, as the state's capacity for effective absorption and management of increased foreign capital inflows experienced severe strains. Investment inflows continued to increase until mid-1995, but Vietnam's institutional framework remained essentially unchanged, particularly in the financial sector and in project licensing and implementation. This situation adversely affected investment conditions, which in turn began to have an impact on the country's macro economy. In early 1995 the leadership initiated a drive to reform both state and party structures — targeting immediate inadequacies while attempting to modernize and rejuvenate the institutions in a more fundamental manner — but this quickly stalled. While inter-departmental policy co-ordination and execution on issues like trade and foreign affairs have improved somewhat under reform, the impact of doi moi had fully run its course by the end of 1995.

In his presidential address introducing the Draft State Budget (RAPBN) before the House of Representatives (Dewan Perwakilan Rakyat, DPR) on 6 January 1997, President Soeharto stated that 1997–98 would be “the years of politics”. Such a characterization was probably due to the fact that during these years Indonesia would face two significant political events, namely, the general election to elect members of the DPR held in May 1997, and the presidential election to be held in March 1998. In this context, the general election was of particular interest to both the government and society. For the former, the general election served as a useful vehicle by which the New Order sought to demonstrate the continued acceptance by society of, at least in the formal sense, its right to rule as a legitimate government. For many in society, the general election brought about an unusual opportunity for them to participate directly in a major national political event.

1997 was also an unfortunate year for Indonesia. In addition to the outbreak of a series of riots from the beginning of the year, it was also marked by a number of “disasters” such as the fiasco over the Busang gold concession, the worst drought in many years, forest fires, and a financial crisis which led to the closing down of sixteen privately owned banks. The Indonesian Government, through Co-ordinating Minister for People's Welfare Azwar Anas, declared on 14 September 1997 that Indonesia was under a state of national disaster. Even though the declaration came as a response to the growing concerns both in Indonesia and in the neighbouring countries, especially Singapore and Malaysia, over forest fires which occurred in many parts of Indonesia, it reflected the general situation in the country. Indeed, at his end-of-year speech, President Soeharto admitted that 1997 was “the year of sadness” for Indonesia.

Both “politics” and “sadness” seemed to have dominated Indonesia's domestic developments in 1997. Many events resulted in a sense of despair, confusion, and uncertainty on the part of the people at large.

If it were possible to somehow quantify the degree of a nation's economic literacy and plot it on a graph, 1997 would show a sudden upward climb for the Philippines. This was the year when populist resistance to the pro-market economic policy reform package began to visibly dissipate, when fiscal discipline was finally appreciated, when the need for adept monetary and economic management was understood, when the correctness of trade- and investment- led growth was accepted, and when the constituency for the reform package finally emerged as a decisive factor on the political terrain.

1997 was, of course, the year of the great currency crunch that swept through the entire region like a terrifying, uncontrollable, and incomprehensible plague. The currency crunch and the improvement of public economic literacy in the Philippines are not unrelated occurrences. Nor are their simultaneous incidence ironic. The region-wide currency crunch, with all its terrible repercussions, was an overpowering calamity that demanded explanation. It was a great storm that raked through every aspect of the people's lives — and therefore required clarity in the popular imagination.

Five years of frantic and compelling market-oriented reforms have turned the Philippine economy around. From being the “sick man of Asia”, the country had become a convincing tiger cub, deserving of its place in a region of “tiger economies”. Five years of escalating economic growth changed the physical and psychological landscape of Philippine society: as buildings rose to scrape the skies, so did popular expectation of ceaseless economic expansion. To say that the Filipino people recovered their optimism after a long bout of economic mismanagement would be an understatement. Filipinos had come to expect constantly rising growth which would eradicate poverty, provide homes for all, and even absorb the large labour force deployed abroad. Any moderation of that growth, it seemed, would be interpreted as a failure on the part of a government that sought support precisely on the promise of securing that growth and ensuring its “sustainability”.

On 5–6 July 1997, troops loyal to Second Prime Minister Hun Sen (of the Cambodian People's Party, or CPP) and those of First Prime Minister Norodom Ranariddh (leader of the royalist party known as FUNCINPEC, or the National United Front for an Independent, Neutral, Peaceful, and Co-operative Cambodia) engaged in a fierce street battle in Phnom Penh. The fighting stunned the Cambodian people and the world. Within two days, the CPP force defeated its enemy, and then pushed the remnants against the northern Thai-Cambodian border into a tiny strategic area called O Smach. At year's end, Hun Sen still held high the trophy of victory.

This article seeks to explore the events of July 1997. At issue is whether or not what took place constitutes a coup; and, if it is a coup, what kind? I argue that the overthrow of Ranariddh was a coup, not a social revolution or putsch. Unlike coups in many other countries, however, it was not caused by factors such as ethnic or ideological antagonisms, socio-political turmoil, or military dominance. I take a structural approach, arguing that Hun Sen's actions must be explained in terms of his struggle for hegemonic preservation, as his party and adversaries braced themselves for the next election scheduled for 1998. (In this study, the term “hegemon” means “leader”, and struggle for hegemony simply means struggle for political leadership.) Although the Second Prime Minister has now achieved political dominance, preventing bipolarity from emerging, he has also recreated Cambodia's old power structure, prone to coups, violence, and war.

Prelude to a Pre-Emptive Coup

In the debate over whether Hun Sen's actions were or were not a coup, those who supported or sympathized with the Second Prime Minister viewed them as preventing Prince Ranariddh from staging a coup against the government. Those who put the blame on Hun Sen considered his actions a coup. It may be worth describing politico-military developments leading to the July events and then examining the two opposing perspectives more closely.

Any study of India's relations with Southeast Asia in the 1990s must begin with a reference to changes that took place in the international system following the end of the Cold War and the domestic political and economic developments that occurred within India around the same time. The two together nudged India towards a readjustment of its foreign policy goals and strategies. Foreign policy strategy in general, and towards certain regions in particular, was modified as the old international and regional orders began transforming. This is not to say that there followed immediately a clear articulation and implementation of India's ultimate objectives globally, regionally or trans-regionally but all the same one could discern alterations in the choice of target areas for its foreign policy. One notable area of emphasis in this connection was the region comprising member states of the Association of Southeast Asian Nations (ASEAN) which was identified as the thrust area for India's foreign policy. Thus in the post- Cold War era India's Southeast Asian policy may be seen as ASEAN-centric reflecting the concerns of the country's new found emphasis on foreign economic policy. Southeast Asia and ASEAN became more or less coterminous in Indian calculations despite the fact that ASEAN did not, and still does not, embrace all the regional states. This article will accordingly analyse the overall impact of India's rejuvenated interest in the ASEAN region and its other residual concerns in Southeast Asia from the perspective of foreign policy change. In terms of overall assessment, however, what bears emphasis is the change in the direction sought rather than in the achievement of specific goals.

Foreign Policy Reorientation

In the theoretical literature, foreign policy redirection or change is placed on a continuum indicating the magnitude of the shift from major adjustment changes, through programme changes, goal changes to international orientation changes. In other words, this would encompass what K. J. Holsti calls foreign policy reorientation and restructuring.

In 1932, Thailand chose to follow the democratic path, and while there have been many detours and obstructions along the way, the crafting of a Thai democracy has remained the ultimate goal. Over the years, the narrowing and constricting of Thai democracy seems to have frustrated Thai observers, while the broadening of democracy has often been far more subtle. The year 1996 saw an expansion of both the strengths and weaknesses of Thai democracy. This expansion had an impact on politics, on the economy, on foreign relations, on civil-military relations, and on the shape of the political system itself. During the year, democracy both crafted, and in turn was crafted by all of these spheres. Although much attention was paid to weaknesses of Thai democracy in 1996 in the local press, many strengths developed as well. Furthermore, a clearer understanding of weaknesses such as vote-buying, corruption, and political interference in the economy emerged, accompanied by a determination to alleviate them through democratic methods.

Politics under Banharn

The government of Banharn Silapa-Archa, elected in July of 1995, struggled with problems of legitimacy and factionalism throughout 1996, resulting in a dissolution of the Parliament in September. These twin problems of factionalism and legitimacy were exacerbated by the failure of Banharn's Chart Thai party to gain any support in Bangkok, where the middle class, through its wealth and through the media, plays a role disproportionate to its size. Indeed, the differences between politics in Bangkok and the provinces are key to understanding the fall of the Banharn government.

Banharn and his party came to power from a provincial base. The Chart Thai party did not even contest seats in Bangkok, where it has no real constituency. Chart Thai won ninety-two seats, all in the provinces. From the beginning, Banharn and most of his party were perceived by the Bangkok middle class to be uneducated, corrupt, and self-serving.

We are pleased to present the twenty-fourth issue of Southeast Asian Affairs, an annual of comprehensive regional coverage on the political, economic and social trends and developments in Southeast Asia.

Designed to be easily readable yet in-depth, informative and analytical, the annual has come to be a useful reference for scholars, diplomats, policy-makers, private sector executives and journalists who seek to understand and keep updated on the dynamics of Southeast Asian developments.

The year 1996 opened with tensions in the Taiwan Straits and rising concerns in Southeast Asia and elsewhere about deteriorating U.S.–China relations. However, these negative political developments receded as the year progressed and later in the year interest was focused on a number of economic developments, particularly on the progress of Asia-Pacific Economic Co- operation (APEC) forum and the World Trade Organization (WTO). The APEC ministerial and leaders’ meetings in the Philippines and the first WTO Ministerial Meeting saw further progress in global and regional trade liberalization.

I take this opportunity to thank all the authors who have contributed much to make this publication possible. While the Institute encourages the statement of all points of view in the publication, the authors alone are responsible for the facts and opinions expressed in their articles. Their contributions and interpretations do not necessarily reflect the views of the Institute.

The highlight of 1996 for many Bruneians was the celebration of Sultan Hassanal Bolkiah's fiftieth birthday on 15 July, with elaborate traditional ceremony, Prince Charles of Britain as guest of honour and a concert by the singer Michael Jackson. In a sense, the event symbolized a dominant theme in Brunei affairs — the tension evident between tradition and modernity. As in previous years, Brunei in 1996 maintained a wide range of international contacts, endeavoured to diversify its economy, developed its infrastructure and communications to establish itself as a regional hub, and strove to reconcile these developments with the preservation of domestic stability and Islamic values.

Diplomatic and Foreign Affairs

Brunei's foreign relations followed the pattern of recent years, playing an active role in ASEAN and the Asia-Pacific region and fostering its links with the Muslim world and with larger powers like the United States and Britain, while reserving to itself a substantial level of independence and freedom of action.

As a small Muslim state, Brunei particularly sympathized with the fate of Bosnia, to whose envoy the Sultan granted an audience in February. During a visit by Pakistan's Prime Minister Benazir Bhutto in March, the Sultan stressed their shared Islamic values and their co-operation on international issues where Muslims suffered as in Bosnia. In September, after being briefed on developments in Bosnia by Jon D. Glassman, Deputy for Military Stabilization in the Balkans in the Bureau of European Affairs of the State Department, the Brunei Government expressed its support for American efforts to restore peace and stability there, sentiments which were reiterated by Brunei's Foreign Minister, Prince Mohamed Bolkiah, at the United Nations.

Brunei established diplomatic ties with the Kyrgyz Republic with effect from 15 March. Existing close ties with Oman were reaffirmed during high level talks on co-operation in education, religious affairs and trade held in Brunei in March and by the signing of a Memorandum of Understanding (MOU) on religious ties in September.

Among the Southeast Asian countries today, Indonesia, with an ageing New Order regime and widespread uncertainties, appears to be closest to its time of major change. This has been made possible by the unwitting consequences of the New Order's success in achieving its original goal of restoring order, developing the nation economically, and maintaining stability through depoliticisation. Major events of the past year have accentuated further the general patterns that began in 1990. In some areas, these trends have accelerated. They all point towards a developing crisis in the New Order government's legitimacy that prompts serious questions about the ultimate outcome. Are we going to witness a new historical transformation of the fourth most populous country in the world? Or, will the New Order regime survive the crisis and reassert its hegemony, without significant changes of the system?

It is hard to predict which scenario will ultimately become reality. The difficulty of making predictions stems partly from the fact that open political contestation has been declared illegal, thus forcing all sorts of political activities to take place behind the scenes. Under such circumstances most political bodies and individuals will not expose their true position, unless their hand is forced.

The following is an account of the major events that have taken place in 1996. It explores the probable connections among these events, and considers their significance in the light of bigger questions pertaining to social transformation. Before this is done, a general framework and comment on the overall situation is provided.

Collaboration: The Basis of Hegemony

The New Order is one of the longest-lasting regimes in the world today. A study of its present crisis requires some consideration of its formation and what solidified it for more than a quarter of a century. While a thorough analysis of these issues lies beyond the scope of the present discussion, suffice to say that the regime's longevity has been made possible by complex mechanisms of collaboration by those formally designated as non-governmental agents.

The recent economic slowdown in some ASEAN countries has been accompanied by inflationary pressures and current account deficits. This raised questions about the ability of these economies to sustain growth and competitiveness. Questions were of the type: Can the cubs grow up to be tigers? Nevertheless, the slow-down that had prompted such questions still supported growth rates much higher than those of many other countries. The most attention was given to the falls in growth in Thailand, Singapore and Malaysia; the first two economies are expected to register growth of only (!) 7.0 and 7.7% respectively in 1996 (Table 1). The Malaysian slow-down is also significant but it may be considered more of a soft landing, because the 1996 GDP growth was still expected to be a relatively high 8.2% — in fact, this relatively slower growth was welcomed for its effect of relieving labour and resource shortages. In the case of Indonesia, although the estimated GDP growth rate of 7.6% was slightly lower than that of 1995 it was still higher than that of the 1992–94 period. The rest of the ASEAN economies, Vietnam, the Philippines and Brunei, performed reasonably well, each recording an upward trend in its GDP growth.

Even these lower growth rates, by themselves, would be regarded as excellent if they took place in virtually any other country, whether developed or not. Yet, in ASEAN they have been received with trepidation. Some of the reasons for this reaction are the exceptional growth rates in the past eight years 1 and the growth targets and economic agendas set by ASEAN countries; only with high growth, sustained over a long period will they achieve the transformation into developed economies. Malaysia, for example, has a target to be an industrialized country by the year 2020 while the leaders of Thailand and Indonesia have also made similar pronouncements. What this implies for the Malaysian strategy, as stated by the government, is that high Gross Domestic Product (GDP) growth of at least 7% per annum has to be sustained for quite a long period of time.

The year 1996 saw better prospects for peace, stability, and democracy in Cambodia. The cautious optimism of this article rests on the notion that peace and stability are relative terms and that democratization is a long and painful process from authoritarianism to liberal democracy. This article is based on the theoretical notion that the way to peace, stability, and democracy rests largely on the strengthening of a weak state which has been incapable of mobilizing resources to achieve national goals and the weakening of a strong society which has been able to successfully resist the state's national policy initiatives.

A close look at Cambodia in 1996 justifies this cautious optimism: the two major political parties within the state were not capable of tilting the balance of power at the expense of each other; opposition parties gained a degree of political legitimacy; and the Khmer Rouge guerrilla force declined rapidly. On the economic front, the country did not fall into total despair, despite the fact that the state still failed to mobilize resources to strengthen its own budget and to meet social needs and was unable to undertake administrative reform. On foreign affairs, Cambodia continued to expand its interactions with other countries and still enjoyed the international community's material and diplomatic support. Major aid donors adopted a more healthy policy attitude that contributed to the military decline of the Khmer Rouge rebels. Overall, 1996 gave Cambodia a better chance to eliminate violent social challenges to state authority (thus strengthening the weak state and weakening the strong society), to devote more attention to economic development (giving more legitimacy to the state), and to prepare for the next elections scheduled for 1998 (which would further legitimize state authority).

Political and Security Structural Development: From Unipolarity to Bipolarity?

The political and security developments during 1996 could give rise to a bipolar political and security structure: the rising tension between the two coalition partners (the Cambodian People's Party or CPP and FUNCINPEC or Front Uni National pour un Cambodge Independant, Neutre, Pacifique et Cooperatif);

The role of public policy in development has been an intriguing and often neglected subject of analysis ever since the study of developing economies began at the close of World War II. Perhaps more than anything else, the success of the economies of East Asia in achieving rapid economic growth, often in tandem with activist public policy has forced us to re-examine issues pertaining to the relationship between government, the private sector, and the market. Singapore's economic success, as credited by the World Bank report entitled The East Asian Miracle effectively supports the hypothesis that effective activist public policy is paramount to ensuring effective economic growth.

While arguing that economic policies and policy advice must be country- specific to be effective, this paper does stress that there are important ideas in the Singapore experience that may aid us in our quest to search for indigenous Asian concepts of development. While the special circumstances pertaining to the external international environment, namely an expanding global economy with an increasingly open world trading system and a relatively free transfer of technology between Asia and the West, played an important role in making Singapore's economic policies since 1965 highly effective, this study will focus purely on the domestic dimension of development in an attempt to understand how an ethos of good government in Singapore has evolved and how it is articulated by the ruling élite.

Understanding Governance from the Singapore Perspective

Since the end of the Cold War or as Francis Fukuyama has contended, the End of History, there has been a growing literature in international relations on the “inevitability of democracy”. The impression given is that social pluralism leads to political pluralism and the inevitable domination of culture and values of the industrial societies of the West resulting in some form of assimilation of those values in the developing world. It is certainly true some values which are universal in application are receiving more importance as countries begin to come to grips with the repercussions of economic development and the rapid globalization of international society as a consequence of information technology.

During the 1990s, leaders of the Vietnamese Communist Party (VCP) have implemented policies to reorganize and strengthen state institutions, while retaining the party's leadership. In politics, they have reformed the VCP apparatus itself, the state administrative system, the National Assembly, and the Fatherland Front and mass organizations. In the economic sphere, they have endorsed the leading role of the state and collective sectors, along with recognition of the rights of other sectors. In the cultural realm, they have assigned to the Ministry of the Interior the tasks of eliminating “social evils”, and recentralized the power of the Office of the Prime Minister and the Ministry of Culture and Information to handle cultural production in both state and non-state sectors. In foreign relations, they have revived and continued ties with communist parties, while diversifying economic relations with other members of the international community. The former has served to reinforce the position of the VCP, while the latter has served Vietnam's economic development.

The rebuilding of state institutions in Vietnam in the 1990s should be seen as part of a process to re-establish hierarchies lost following Vietnam's move away from central planning in the 1980s. The 1990s mark the beginning of the third wave of state building in Vietnam since 1945. The first occurred after the end of the Franco-Viet Minh War in 1954 during the transition from colonial capitalism to state socialism; the second took place after reunification of the Democratic Republic of Vietnam (DRV) and the Republic of Vietnam (RVN) in 1975 when the DRV model was imposed on former South Vietnam and when the communist leadership moved to implement its large-scale socialist development plan.

Several factors precipitated the leadership's move to elevate and strengthen the role of state institutions. First, the only ideological capital the Vietnamese leadership had accumulated, Vietnam's recent socialist past, favoured a state-oriented model of development. Second, Vietnamese leaders needed a new and efficient institutional framework in order to promote further economic growth.