There's more than one way to survive a crisis. It was about a year ago that two Southeast Asian economies ignored the West's advice, introduced strikingly unorthodox measures to protect their fast-weakening currencies and roiling economies and triggered a transpacific diplomatic storm. The West, especially America, howled, as if some holy Adam Smith commandment had been violated. But that did not stop Hong Kong from shoring up its stock market in an unprecedented way, and Malaysia from erecting a firewall to protect its besieged currency. What happened next was the stuff of regional legend: The unprecedented moves actually worked, and the West's unease at such economic unorthodoxy, aimed at Western stock and currency speculators, looks in retrospect suspiciously overwrought.
 

Happy anniversary, Hong Kong and Malaysia. It looks like you were right and the West was wrong. Neither is gloating, not yet, at least. Though today their economies seem much improved over a year ago, they--and Asia in general--are still slogging their way through regional financial turmoil. But this dramatic tale of two economies that publicly ignored Uncle Sam's avuncular advice is an object lesson. The truth is, every Asian nation will have to fashion its own survival strategy, whether Washington likes it or not. Hong Kong and Malaysia got the chilly brunt of American criticism for intervening heavily in their supposedly free markets, but everyone knew that other Asian nations, though more quietly, were stitching together their own approaches to economic survival in the age of globalization. But if Asia frequently complains, usually under its breath, about America's economic dogmatism, America is often right to call attention to the Asian penchant for inertia. It's a serious issue: If the region plans to compete effectively in the global economy, it's not going to do so without modernizing, especially regarding financial transparency, government oversight and banking systems.

In fact, top-flight Asian executives know this better than anyone, according to a recent regional survey conducted by the research unit of Rabobank International of Singapore. It found that few Asian professionals believe reforms have gone very far; indeed, most doubt that the programs have even made it to the halfway mark. Such reforms are among the big issues sure to arise at next month's annual get-together of the Asia Pacific Economic Cooperation group in New Zealand. APEC is now the region's leading multinational organization, and this could prove one of the most important meetings ever for America and its Asian friends. For if the flu flares anew, and millions more Asians are thrown out of work, the U.S. could lose more than just a region of healthy trading partners. Warns Princeton professor Richard Falk, in the current issue of Harvard International Review, "Further retreat [from Western ways] could be prompted by instability, generated in part by a spreading sense that the benefits of economic globalization are being unfairly distributed."
 

It was only six years ago that APEC rose from the mundane--a low-key ministerial meeting in which the U.S. participated--when President Clinton dramatically decided to attend the organization's annual meeting; overnight, virtually every other Asian head of state showed up. That ceremonial sequence changed the very nature of APEC, also virtually overnight. Next month, Clinton is expected to be in Auckland. He's scheduled to bring along a top team, including America's tough-minded, highly respected chief trade negotiator, Ambassador Charlene Barshefsky. APEC, she concurs, needs to become a premier venue for better Asia-U.S. understanding: "Asia's future is tied up in regionalism, so a priority in Auckland is to build APEC up." This is the long-range vision that U.S. diplomacy needs. Among other things, Barshefsky believes the APEC summit will help create new momentum for China's accession into the World Trade Organization. Its annual meeting is in Seattle in November. And she believes that the high-pressure, star-studded atmosphere in Auckland will seal market-opening agreements with long-shuttered Vietnam.
 

Like predecessor institutions to the current European Union, APEC could be an important evolutionary stop on the way to true Asian regional union. Sure, that idea's a long shot. But so were those shots in the dark that Hong Kong and Malaysia took a year ago in order to survive.
 
Tom Plate
Times Contributing Editor. He Teaches at Ucla.