Juggernaut in the East

Forget America -- the real middle-class society is Asia.

Published February 11, 1997 8:00PM (EST)

if we now live in a world where ideological struggles have given way to the global marketplace, then Asia is unquestionably the force to be reckoned with. The largest middle-class population in the world, after all, now resides in Asia. The implications for the West are staggering, to say the least.

Economists predict that by 2010, affluent Asians will number between 800 million and 1 billion. "The biggest market for almost everything is in Asia -- not just cars, but high-tech products, entertainment goods, basic infrastructure -- you name it!" marvels an American businessman. "The idea that China will soon be the richest country in the world and still has only about 10 million cars makes my eyes pop out."

But these entrepreneurial dreams will fail unless the West realizes that Asians aren't just greedy for Western products. Modernization no longer implies Westernization: Asians are now inclined to think they are following "the Asian way." The only problem is, no one is quite sure what "the Asian way" means.

"Traditional ethnic cultures are being revived with new elements of universality," observes Masakzu Yamazaki, who studies cross-cultural influences at East Asia University in Tokyo. Korean agrarian folk music is influenced by jazz; Balinese dance, influenced by German art forms, in turn is influencing the Japanese modern dance troupe Sankaijuku.

Yamazaki sees a new Pacific International style emerging that draws on both Asian and Western cultures but with an emphasis on the East.

As affluent Asians acquire an increasingly sophisticated sense of self, they look for reflections of themselves as the main players in the global narrative. Nowhere is that more apparent than on the silver screen. Though moviegoers in the West are only beginning to discover Jackie Chan, the martial arts expert and Hong Kong movie star, for Asians he has long since replaced James Bond as the icon of global macho, whether fighting neo-Nazis in the Sahara desert or escaping Incas in Peru.

"Hong Kong has its own dream factory, the third largest in the world, and its own megastars, and more and more it's incorporating other Asian stars into its movies to represent the entire Asian region," notes Wayne Chang, whose family owns a movie theater in Hong Kong. The recently released Hong Kong film "Beyond Hypothermia" uses Korean, Japanese and Cambodian actors speaking at least five different languages (English included) in a highly stylized dance of bullets and tears that hypnotizes Asians all over the continent.

In the fashion world Asian designers like Rei Kawaibo, Hanei Mori and Joyce Ma are scoring with East-West hybrid designs. In the arts, although Western media headline Asian billionaires buying up Western art treasures, the real story is that Asian nouveaux riches prefer Asian to European arts. The new high-tech museum in Shanghai was funded mostly by overseas Chinese who also bought art objects to donate to the museum.

In Malaysia, prime minister Mahathir Mohamad is introducing the "Multimedia Super Corridor," a 15-mile-wide by 50-mile-long corridor that connects Kuala Lumpur's airport to the world's tallest building. With the help of Silicon Valley executives, he aims to usher in Malaysia's own version of the Information Age.

But despite occasional anti-Western chauvinism, there is little danger the new "Asian identity" will turn exclusionist. English remains the preferred language of commerce, and Western democracy and freedom of expression are the explicit goals of many Asians. A typical middle-class urban Asian speaks two or three languages, and feels at home in two or three different countries.

But he also retains the core values of his or her own culture. The Western journalist who reports on how a Thai youth wears his Yankee baseball cap turned backwards needs to be aware that deep down, as a recent survey of Hong Kong young people found, his family comes first, followed by education, caring for older relatives and saving for the future.

In a sense, to become relevant to the East, Westerners will have to grow more humble, just as once the East humbled itself to learn from the West. Certainly, the Westerner traveling to Asia with open eyes will discover an old continent being reborn into the New World.

Where Social Security is private

Look south for ways to save your retirement money.


president Clinton stayed far away from it in his State of the Union speech. His budget has nothing to say on the matter. Nor do Republicans. But you're going to be hearing a lot about saving Social Security in the next year or two. Which means you're going to hear a lot about Chile.

Chile, the sliver of a South American country, jumped ahead of the rest of the world 15 years ago when it privatized its state-run social security system, requiring most of its workers to invest their retirement savings in one of several tightly regulated private pension funds.

The experiment has been enormously successful, say its boosters. The country's stock market has skyrocketed, and many blue-collar workers have millions of pesos (thousands of dollars) more in their personal accounts than the old system would have paid. In a mildly surreal version of hardball marketing, the giant pension funds now send platoons of smiling sales representatives -- many of them attractive young women -- to woo potential investors in factory cafeterias and office hallways.

Proponents of privatizing the United States' badly fraying Social Security system point to this apparent success story with an impatient mix of respect and envy. Without reform, most financial analysts agree, the current American system will be bankrupt by 2029, when baby boomer retirement withdrawals will have far exceeded the amount of money being paid in by their offspring. To some, Chile and the high returns earned by its market-invested private pensions mark a way out of this demographic bind.

"The United States is really lagging behind," says Naomi Lopez, an analyst at the conservative Cato Institute, which has taken the lead in pressing for a Chilean-style system in this country. "If people in a nation like Chile can handle this system, the people of the U.S. can."

But is Chile, a country of 15 million with a $98 billion economy, really a good model for the United States, which encompasses roughly 264 million people and boasts a $6.8 trillion GDP?

Differences between the two countries go well beyond problems of scale. When Chile began its experiment with privatization, it was governed by a brutal military dictatorship that -- whatever its economic success stories -- had no qualms about "disappearing" its more outspoken critics. It also sold off state-owned companies and assets accrued by earlier, more socialist-minded governments, providing a massive one-time infusion of funds for a new system. America has no such cash equivalent.

But what really blocks a successful transplant to U.S. soil are the dates on American birth certificates. "In 1980 Chile was demographically very young," notes World Bank senior economist Louise Fox, who spends much of her time advising other nations on how to import the Chilean model. She points out that in 1990, fewer than 10 percent of Chileans were over 60 years old. The same age group in the United States made up 16.7 percent of the population, a figure that promises to shoot upwards as baby boomers hit retirement age. "(Chile's) transition debt was very small," Fox says. "We've just got too much of a debt already."

The debate in this country is focusing on recommendations released last December by the 13-member presidential Advisory Council on Social Security, a body so torn between different fix-it philosophies that it finally released three different reform plans -- all of them a far cry from what Fox calls the "full Chile."

The first plan would keep the current system structurally unchanged, tinkering with the levels of monthly checks and the retirement age, and allowing the government to invest its surplus funds in the stock market. Plan two would have taxpayers pay a small portion of their total Social Security tax into an individual account, which could be in equities, though still managed by the government.

Only the third alternative provides any real red meat for privatization advocates. Under this plan, close to half of a worker's Social Security payroll tax would go into a private retirement account, managed by the individual worker. The other half would go toward supporting retirees that had paid into the old system, and would in the long term provide a basic level of benefits for everybody. The transition costs would be financed by nearly $2 trillion in bonds over the next 72 years, to be paid off by a payroll tax hike of about 1-and-a-half percent.

This third plan met with stony skepticism from many Democrats. "I think it's a non-starter," said Senate Minority Leader Tom Daschle, D-S.D., on CBS's "Face The Nation." Republicans focused on erasing the federal deficit also cast a worried eye on the plan's short-term budget implications.

But whatever the initial resistance, the Chilean idea isn't going away. Other countries, including Sweden, Switzerland, Holland and Argentina, are allowing their citizens to put some of their social security funds in some form of private account. More are moving in this direction every year. "Absolutely all industrial countries ... are facing the same problems," Fox says. "Pay-as-you-go systems are too expensive."

It might not be tomorrow that a smiling representative of Prudential Retirement knocks on your door, offers you a wall calendar and launches into an explanation of why your current pension fund manager is wasting your retirement taxes. But it might be sooner than you think.
Feb. 11, 1997

John Borland is an editor at California Journal, a monthly magazine that covers California politics and policy.


Taking the mommy track

I don't want to send a message to the world that says, 'Don't hire a mom.' But at a certain point you make the personal decisions. It all came to a point where I made the decision that this is not what I wanted to do with my life right now.

--Heidi Roizen, who resigned Monday as head of software developer relations for Apple Computer. (From "Apple to Take Big Write-Off On Acquisition: Deal for Next Revalued; A Top Executive Quits," in Tuesday's New York Times.)

By Andrew Lam

Andrew Lam is an associate editor of Pacific News Service.

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