How Small Countries Can Show the Way

In this series, we asked speakers at the Milken Institute Asia Summit to make one prediction for where Asia is headed in the next 20 years. Join the conversation by writing your own article here and including #MIGlobal. Follow the Milken Institute to get updates from the Asia Summit.

Dili, Timor-Leste – The tremendous economic troubles and political unrest that once swept large parts of Asia starting in 1997 seem a world away, as I watch yet another beautiful sunset here in Timor-Leste following the peaceful conclusion of elections this past July.

Yet, as my Milken Institute colleagues look back 20 years to 1997 and ahead 20 more to 2037 at our annual Asia Summit, it is worth pondering the transformations and disruptions that have taken place across Asia and what may well lie ahead.

The story of Asia today remains very much one driven by its largest nations and economies. An increasingly assertive China, a slow-growing Japan, a rising India and a still emerging Indonesia dominate the headlines, along with mounting tensions from the Korean peninsula. Yet, all of “Asia rising” can take a lesson from some of the region’s smallest countries.

From three small countries come three big lessons for a greener, more representative, and more transparent Asia. My hope for Asia 2037 is that these small nations can inspire and show the way.

Bhutan: Conservation & Gross National Happiness

“Going Green” is a phrase that has been thrown around for many years by both countries and companies. But despite the rhetoric, Asia is increasingly polluted, with man-made forest fires and smog-enveloped cities an annual occurrence. At least one Asia-Pacific nation, however, both “talks the talk” and “walks the walk”. 

The small Himalayan kingdom of Bhutan – 750,000 people in a nation of only 17,500 square kilometers (17,950 square miles) – offers an example that its much larger neighbors (China to the north and India to the south) can learn from.

Bhutan’s leaders have put conservation at the heart of their environmental agenda, pledging to keep the country carbon neutral and writing into their constitution the requirement that 60% of the nation must remain forested. Other initiatives include bans on plastic bags, restrictions on private vehicles in the capital Thimpu, and a commitment to become the world’s first 100% organic-farming nation.

All this is in line with the philosophy of “Gross National Happiness” advocated by the fourth King of Bhutan, Jigme Singye Wangchuck. Known simply as GNH, this approach to development goes beyond traditional economic measures such as gross national product, which only captures the economic value of goods and services produced. In addition to environmental conservation, central GNH tenets advanced by a Gross National Happiness Commission include sustainable and equitable socio-economic development, preservation and promotion of culture; and good governance.

Timor-Leste: Representation – and Power to the People

Another of Asia’s smallest countries, with 1.2 million people and 14,875 square kilometers (5740 square miles), offers an example of how people can move forward post-conflict and take control of their own destinies, when given the chance.

I returned recently to this former Portuguese colony located on the eastern half of an island shared with Indonesia, just north of Australia. This trip, my third to Timor-Leste, was as part of an international election observation mission from the Washington-based International Republican Institute. The Timor-Leste government had invited observers to monitor the first parliamentary elections administered without U.N. oversight since the country regained independence in 2002 from Indonesia.

The results were a peaceful and powerful example to many nations, big and small, still struggling to put the power of the vote in the hands of their citizens. 

While significant economic challenges continue, the people of this newest of Asian nations deserve significant praise as they progress from decades of conflict and centuries of colonialism. Timor-Leste was ranked 1st in the Economist Intelligence Unit’s Democracy Index 2016 for Southeast Asia and 5th in Asia, behind the well-established democracies of Japan, South Korea, India and Taiwan.

Singapore: Transparency and the Rule of Law 

The densely-populated city-state of Singapore, 5.6 million people on an area of only 719 square kilometers (278 square miles), is perhaps the leading example in Asia of a small nation that thinks big – and succeeds big. With one of the highest GDP per capita in the world, Singapore showcases the economic benefits of transparency and the rule of law. Its neighbors would do well to adopt this nation’s embrace of free markets and free trade in their own search for drivers of growth and foreign direct investment.

Understandably, the push-back was significant when Kishore Mahububani, dean of the Lee Kuan Yew School of Public Policy at the National University of Singapore, recently argued, “Small states must always behave like small states,” in remarks perceived as a criticism of Singapore’s recent foreign policy.

Singapore did not succeed by thinking small, nor has it reached global prosperity by conforming to “small-country guidelines.” Having developed from fishing village to first world country in just a few generations, Singapore also has become the leading finance and trade hub in Southeast Asia and a role model for rule of law. This prosperous “Lion City” is now ranked the 2nd easiest place in the world to do business in the World Bank's Doing Business 2017 report, behind New Zealand, and the 7th least corrupt economy in the world according to Transparency International’s Corruption Perceptions Index 2016.

Being ambitious is not a bad thing. Small in geography need not mean “small-country mentality and policies.”

Asia 2037: Going big with small state ideas?

Over the last 20 years, I have visited Timor-Leste three times, and Bhutan and Singapore regularly, and seen firsthand their accomplishments and continuing challenges. As small fish in the big pond that is Asia, these three nations' futures are by no means certain. 

In the two decades ahead, Asia will continue to transform. According to United Nations estimates, India will have traded places with China six years before 2030 to become the world’s most populous nation, en route to 1.66 billion people by 2050. Wealth and inequality will likely grow, as will the risk of military conflict amidst competing demands for energy, water and other resources. Paradoxically, a more populous Asia dominated by large nations might also prove “smaller” as trade and technology further link the region.

All share a vision for an Asia-Pacific that is both prosperous and at peace in 2037. Much though will depend on the world’s biggest powers and the region’s largest nations.

Here’s a prediction. Large countries will seek in the years ahead to apply economic or military pressure to shape their smaller neighbors’ behaviors and policies – no different than today. Asia and the Pacific, however, will be better off if all nations adopt some modern-day, “small state ideas” offered up by Bhutan, Timor-Leste and Singapore – namely the embrace of a greener, more representative and more transparent future for all their citizens.

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Curtis S. Chin, a former U.S. Ambassador to the Asian Development Bank, is managing director of advisory firm RiverPeak Group, LLC. Follow him on Twitter at @CurtisSChin. He is the inaugural Asia Fellow of the Milken Institute.