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Dragons Gain New Muscle

The enormous economic clout of Asia's newly industrialised countries could give them formidable political power, analysts say. Ramon Isberto of IPS reports from Manila
AS the world becomes multi-polar, Asias economic dragons are emerging as potent new factors in the security of the Asia-Pacific region.
The prosperity of countries like South Korea, Singapore, Hong Kong and Taiwan is giving them political influence in the region, says a new study by the Centre for Research and Communication (CRC), a conservative Manila-based think lank.
It also allows them to spend generously on defence which again enhances their political clout, the study said.
The growth importance of the newly industrialised countries (NICs) Is diminishing US political influence in the region, says Julius Caesar Parrenas. author of the study. Restructuring for Stability.'
Along with a gradual US military withdrawal from the region, the Soviet Union s vanishing act and Japan's increasing assertiveness, this trend Is contributing heavily to the rise of a multi-polar balance of power In the region.
Such a scenario would be even more interesting if the two Koreas are reunited this decade. "Korean reunification must be seen as a development that could lead to a major change In the face of the western Pacific," Parrenas says.
This analysis is premised on the view that in the post-Cold War world, military clout is declining in Importance while economic power is rising.
"Military strength remains important," says Alan Ortiz, deputy director general of the Philippines' National Security Council. "It will always be there. But in the new world si-
tuation. economic power is the dynamic element."
By that measure. Asia's NICs have enormous potential clout. The four so-called dragons account for one-third of Asia-Pacific exports and their combined gross national product amounted to USS31 1 billion in 1988.
The NICs are awash with surplus cash. Taiwan has foreign exchange reserves worth USS75 billion. Singapore has USS20 billion while South Korea has USS 13 billion. From being net recipients of foreign aid after the Pacific War. these countries have become sources of aid and Investments for the less developed countries of the region.
Total Taiwanese direct In-vestments abroad 1s estimated lo be worth about USS5 billion, while South Korea and Singapore have about USS2 billion each.
"More directly related to the Asia-Pacific balance of power Is the growing military capabilities of the NICs.” Parrenas said.
The defence budgets of South Korea and Taiwan (both over USS7 billion dollars in ihc last three years) arc the second and third largest in the Western Pacific after Japan. In dollar terms, their budgets exceeded that of China and Australia.
These two countries have thus become conventional military powers, whose armed forces are among the best-equipped tn the region. Tiny Singapore's military Is the best trained and best-armed In South east Asia
The prospect of a unified Korea no longer seems impossible after Germany's experi-
ence and North Korea's worsening economic difficulties. Analysts foresee this happening if communist control in Pyongyang.
"A unified Korea would be an important political, eco- . nomic and military power in North-cast Asia, adding one more power to the four already shaping the region's future — China, Japan, Ihc United States and Russia," Parrenas says.
A united Korea today would have a population of nearly 70 million, a combined Gross Domestic Product (ODP) of around USS200 billion. This would bring together the technological and financial resources of the South with the disciplined, low-cost labour force and mineral resources of the North.
Its armed forces would have 1.7 million men, with about 10 million reservists, versus Japan’s 250.000-strong armed forces with about 48,000 reservists.
A combined Korean air force would have 1,100 combat aircraft, twice as many as Japan’s. With 5.000 tanks and 3,700 other armoured vehicles, a unified Korean army would have an armoured force five times larger than Japan's.
Parrenas expects Japan's economic role in Korea to grow as Japanese capital flows in to develop the North. But friction could rise as the two countries become rivals in the region.
The end of the North-South conflict would also lead moat likely to the withdrawal of US forces in Korea, which could translate Into a major reduction of the US military role In the region. Parrenas says