The Perils & Promise of Peace

Asians, says Japan's Foreign Minister Takeo Miki, must work together on "a blueprint for the construction of peace." Behind that message lies the fact that the Viet Nam war--with its massive in flux of U.S. dollars--has had a major economic impact on non-Communist Asia. With peace a distinct, if still distant possibility, the challenge confronting Asians is to gird their war-swollen economies for a more enduring--and healthier--resurgence.

Peace could come as a jolt to many countries. Yet the war has helped lay a foundation for economic growth. Even battle-ravaged South Viet Nam will have gained new airports and harbors, built for waging war but equally suitable for handling peacetime traffic. In Thailand, U.S.-built military roads can be used--indeed already are being used --to get native farm products to market. Similarly, says John K. Wilhelm, an American AID official in Saigon, the heavy ocean-cargo volume generated by the war "might simply be transferred to civilian shipping" once hostilities cease.

Asia is short on specific plans--shorter still on capital--for economic development. There is no dearth, however, of physical or human resources. Its technical advisers in Viet Nam have proved that Taiwan has the kind of electric power, harbor development and agricultural experts necessary for rebuilding war's ruins. Malaysia can join in the reconstruction effort with timber and cement, South Korea with textiles and fertilizer. Indonesia, potentially a major Asian supplier of oil and copper, is even now busily luring the foreign investment necessary to exploit its rich natural resources.

The Fleet's Ice Cream. Obviously, the adjustment to peace would be hardest for the countries where the dollar deluge has been heaviest. In the Philippines, where the number of American troops and dependents has increased to 50,000 since the start of the Viet Nam buildup, the U.S. military outlay last year was $150 million, which helped considerably in easing the effects of Manila's outsize trade deficit.

In South Korea, wages--paid in dollars --sent home by countrymen fighting and working in South Viet Nam account for $62 million a year in sorely needed foreign-exchange earnings. And such pleasure haunts as Hong Kong and Bangkok enjoy a windfall--$100 million a year, all told--from rest-and-recreation visits by Viet Nam-based U.S. servicemen.

The war has also played a part in Taiwan's newfound prosperity. Last year the Nationalist Chinese sold South Viet Nam some $100 million in machinery, fertilizer and other goods, nearly 15% of Taiwan's total exports. In Japan, the U.S. military during 1967 bought some $200 million worth of goods for Viet Nam, ranging from sandbags to Isuzu buses. The war less directly helped generate another $800 million in Japanese exports; for example, G.I.s based in Southeast Asia purchased 13% of Japan's total camera exports. Other beneficiaries include Singapore and Malaysia, which store and ship Viet Nam-bound petroleum products, a trade that amounted last year to some $100 million between them.

With some 60,000 American servicemen and civilians living within its borders, Thailand has sprouted forests of high-rise luxury apartment buildings and sprawling neighborhoods of boxy, surburban-style homes. The American presence has provided jobs for 100,000 Thais. Now the military buildup has started tapering off. With the completion of the vast, U.S.-built Sattahip harbor and airfield complex southeast of Bangkok, some 5,000 construction workers will be laid off by December. "If the war ends," concedes one Thai economist, "we will have to start tightening our belts."

Just how much belt tightening would be needed depends of course on how fast the U.S. scaled down its military involvement in Asia. The likeliest prospect is for a gradual withdrawal--and even then, only a partial one. Thus Hong Kong ice-cream makers need hardly worry that their sales to the U.S. Navy might be cut off; the Seventh Fleet was plying Asian waters--and calling at Hong Kong's port--long before the U.S. ever got involved in Viet Nam.

Hardheaded Help. Many Asians naturally look first to Washington for peacetime assistance. In his Johns Hopkins University speech in 1965, President Johnson pledged the U.S. to a billion-dollar investment program for Southeast Asia, with much of the outlay earmarked for building a massive, United Nations-sponsored hydroelectric complex on the Mekong River in South Viet Nam, Laos, Cambodia and Thailand. Although the U.S. is sure to play a major reconstruction role, Congress is not likely to look favorably on such far-reaching assistance schemes as long as the U.S.'s dollar drain and pressing domestic problems persist. Unfortunately, wealthy European countries have shown little interest in taking up the slack by funneling funds through such international agencies as the World Bank.

That leaves the immediate problem largely up to private investment--and to Asians themselves. That is not as limited a prospect as it might seem. Rather than see their new hotels and restaurants stand empty, Asians will have to undertake large-scale programs to stimulate tourism. To compensate for the loss of military markets, Asia's industrial leaders--notably Japan and Taiwan--will be in a position to supply their less developed neighbors with much of the equipment and technical assistance necessary for reconstruction. Japan has already stepped up its economic aid to Southeast Asia; cool at first, Japanese businessmen now applaud such assistance as a hardheaded move that could result in new Asian markets for made-in-Japan products.

A Beginning. Wartime demand has helped fuel a business spurt in large parts of Asia. It has also keyed many of the economies to a false pitch. Ultimately, any hope for stable economic growth in Asia--and a better life for its masses--rests on planned development and viable trade. These, in turn, depend on peace. For South Viet Nam and its neighbors, the end of the war, when it comes, will be merely a beginning--with the difficult economic struggle still ahead. That struggle can be won only if the blueprint for peace is properly drawn.

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