Region's Economic Future Vaporizes

But it has also prompted some to write obituaries about "Asian values," the mainly Confucian ethics of discipline, thrift and hard work that was supposed to have been East Asia's winning formula for success.

Before the currency turmoil shook the region's financial and capital markets in July last year, one Asian leader after another would peer into the future and herald the dawn of the "Asian Renaissance." Even some Western skeptics had come around to support the view that there were certain socio-cultural qualities that underpinned the East Asian economic miracle.

Today, nobody talks about this renaissance much. Even the foremost promoter of Asian values, Malaysian Prime Minister Mahathir Mohamad, admitted yesterday in Kuala Lumpur that perhaps markets should be left alone. For now at least, the Asian miracle seems to have vaporized into an Asian mirage.

The rupiah fell even more dramatically last week, fueling speculation on a moratorium on debt payments and prompting Suharto to issue a statement Friday reaffirming his commitment to the terms of an IMF bailout package.

Other Southeast Asian countries also continue to be badly mauled. Not even South Korea, Hong Kong and Japan are spared. And last week there were fears that the contagion was spreading to three economies which have remained relatively unscathed: Taiwan, Singapore and China.

In the good days, traditional values in Asia were said to have fuelled the region's boom. These included hard work, the desire to save, respect for leaders and putting society's collective interest before individual rights. They helped attract investors to the region in droves, as foreign money and economic growth fueled the engines of Asian economies.

Asia's spectacular growth by an average of 6.5 percent from 1965 and 1990 lent its leaders added standing when talking about economic growth and poverty reduction.

But now several economies are paying the price for the way some of Asia's real values -- twisted to serve vested interests of its business and economic elites -- contributed to the region's downward slide, and flight of capital and erosion of confidence from it.

"Asian leaders were very selective in choosing and interpreting certain traditional values in a way that suited their interests," said Mustafa Anuar of the Malaysian social reform movement, Aliran.

Respect for authority, for instance, was adapted by powerful presidents and prime ministers to mean blind loyalty toward political leaders and leave little room for dissent. Leaders were to be listened to and followed, not taken to task. Criticism was often frowned upon and discouraged.

Albert Chen, dean of the University of Hong's law faculty, says these distortions of values actually contrast sharply with Asian political culture.

For instance, Chinese cultural tradition recognizes "the importance of consultation by the ruler and his following the wishes of the people and winning their hearts instead of just their outward submission" Chen said in Hong Kong recently.

But accountability to the people was not among the "Asian values" espoused by the region's political elite.

Mustafa added: "Asian leaders very conveniently ignored religious values that exhort the people to criticize rulers who are unjust and corrupt." Instead, many heads of government stifled dissent, jailed critics and closed down outspoken newspapers.

Absolute power corrupted absolutely. Nepotism and patronage politics thrived, sapping much of the region's vitality. Transparency was poor in the incestuous links between government and big businesses like South Korea down and Indonesia. It may have worked in the past, but proved costly weaknesses once investors panicked and rushed to abandon Asia.

Inadequately-regulated banks were pressured to lend huge sums for dubious projects carried out by business interests close to the political elite -- a key factor leading to the downfall of dozens of Asian financial institutions.

At the same time, ordinary citizens were asked to toil and practice strong work ethics to create prosperity in a fusion of public and private sector interests. "But work hard for what and for whom? At the end of the day, who really benefited the most? It was the people at the top: politicians and well-connected businessmen," Mustafa said.

Moderation and prudence were among the traditional values that were neglected, Mustafa observed. This was especially evident in Malaysia, where megaprojects were a pillar of the fast-growth policy pursued by Mahathir.

Moderation took a back seat as consumerism and materialism flourished, and many parts of Asia splurged like there was no tomorrow. Unproductive spending pushed up current account deficits in most South-east Asian countries, exposing them to global forces and undermining the strength of their currencies.

While there was enough money for megaprojects, there was never enough for essential social services, leaving the poor to fend for themselves.

Some Asian leaders did try to use "Asian values" to justify political repression or to cover up corrupt or untransparent practices, but it would be swinging to the other extreme to say that East Asia has made no strides.

In fact, what the Asian economic crisis has exposed is that unbridled Western capitalism without the checks and balances of democracy can go dangerously awry.

It will take another three years or so for East Asia to crawl out of this morass, but is clear that Asians have not been served well by the elite's twisting of traditional values to serve its own interests.