Where the wave of the future will crest
Los Angeles — You can see the future from here.
It laps at the California shore, and stretches west from there across one-third of the globe. It borders five continents and cradles two-thirds of Earth's people. In the eyes of most Atlantic-oriented Americans, it has long been that ''other'' ocean.
But not for much longer. At least so say growing numbers of Western and Pacific observers, who contend that it is in the Pacific Ocean that the wave of the future will rise and crest.
It's a concept that's hard to grasp in a nation that has spent 200 years looking across the Atlantic Ocean toward Europe - drawn by ethnic and cultural heritages, political goals, and economic needs.
But that doesn't change what's happening in and around that ''other'' ocean. Almost unnoticed in the past decade, the Pacific Rim - the basin that includes the Pacific Ocean and all the countries in and bordering it - has taken on global importance as a result of growth in trade, finance, energy resource exploration, and immigration.
''The now flourishing Pacific region . . . constitutes nothing less than one of the great developments in human history,'' said James Day Hodgson, former US ambassador to Japan, and vice-chairman of the US chapter of the Pacific Basin Economic Council, during a recent panel discussion of the basin.
''A new era is indeed upon us,'' he said. ''From now on, the words 'Pacific' and 'future' will be synonymous for all North Americans.''
Just how that era will unfold is still unclear. There will be challenges, to be sure - challenges like the trade issues now creating friction between Japan and the United States - as Occidental and Oriental cultures are drawn to a common meeting ground. But the promise of ''a Pacific century'' is bright, say business, government, and academic experts, who note indications of that coming age everywhere.
Some of the most striking hints of what lies ahead are found in statistics, and the trends they imply. Within the past five years, for example - for the first time in history - Americans have been trading more across the Pacific than across the Atlantic, trade worth more than $100 billion a year. That trend is expected to continue, since basin trade is accelerates at a faster pace than total world trade.
The fastest economic growth in the world is taking place in the Pacific Rim, basin experts say. Although it wouldn't surprise many people to know that Japan, until recently, has grown more rapidly than the US and Western Europe, this island country isn't the only booming economy in the Pacific.
South Korea, Hong Kong, Taiwan, Singapore, and others have grown at rates well above those of most Western nations - and have earned themselves the nickname ''Confucian capitalists.'' In fact, in October 1981, Euromoney magazine rated 85 countries around the world on their economic performance since 1973. At the top of the list was Taiwan, with Singapore and Hong Kong right behind.
Such growth has prompted many observers to predict an imminent shift in the balance of global power. Paul McCracken, for one, a former chairman of the President's Council of Economic Advisers, has predicted that:
''By the year 2000, the Pacific complex represented by Japan, Taiwan, South Korea, Hong Kong, Singapore, Malaysia, and the Philippines, would in aggregation of economic power and dynamism exceed that of Western Europe and the US.''
In California, perhaps more than anywhere else in the mainland US, the facts and figures have special meaning. Here, for example, more than 1.2 million people of Asian ancestry live - the largest total anywhere in the US. Here, too, the largest number of Indochinese refugees - 185,000 - have settled.
Although the state has complained that it is bearing an unfair share of the nation's refugee burden, overall these Indochinese newcomers and other Asian immigrants have earned reputations for being hard-working citizens. They are known, too, for bringing with them a sense of community, which is particularly striking in Los Angeles, where collective values are often trammeled in the pursuit of the individualistic life style that is the city's hallmark.
But California's newcomers have brought more than family connections - they've brought financial connections as well. Some 50 banks based in Pacific Rim countries have opened branches in California, says Dr. Hang-Sheng Cheng, assistant vice-president and economist with the Federal Reserve Bank of San Francisco. Over the past 10 years, it has been estimated, some 400 Japanese companies have invested in southern California. And in Los Angeles, Japanese money has helped fuel a renovation of Little Tokyo, a major part of the city's downtown renewal effort.
For the most part, the implications of these statistics and trends escape widespread public attention. But many individuals, government officials, and private organizations have begun taking notice - and action.
In Los Angeles, for example, the Chamber of Commerce holds an annual Pacific Basin seminar that features experts from the region and attracts scores of local businessmen. In Hawaii, where the state's heavy Asian population and Pacific location have meant a greater awareness of the Pacific Basin than is found elsewhere in the US, government and business officials are striving to style Honolulu as a natural regional center - and already have attracted many corporate regional headquarters to the islands.
These officials also make a point of seeking out Pacific dignitaries who stop over in Hawaii while passing through the region. And an advisory council to Gov. George R. Ariyoshi has begun encouraging more widespread study of Pacific Rim languages, so that Hawaii will eventually be able to offer simultaneous translation for all its Pacific visitors. ''This is where the action is now,'' says Hideto Kono, director of planning for the state. ''We're in a favorable position.''
Pacific potential also has been recognized by Western coal-producing states. They have joined with US industry leaders and representatives from Japan, Korea, and China in attempts to open those markets to Western coal. And Pacific Basin countries have begun meeting informally - bringing together representatives from government, business, and academia - to discuss how best to guide and enhance developing relations among Pacific nations.
Within the next decade, say those now exploring the Pacific's future, the current discussions - which have involved a fairly limited group so far - will broaden into widespread public awareness and dialogue. At the heart of that growing awareness, they say, will be these Pacific Basin issues and trends:
* Trade and finance. In the past 30 years - as communications and modern transportation have forged previously nonexistent links among Pacific Basin countries - the whole region has grown increasingly interdependent in trade, says the Federal Reserve Bank's Dr. Cheng.
California, for example, counts seven of its top 10 trading partners among Pacific Rim countries, which account for 75 percent of the state's foreign trade , he says. Japan and Australia count on their Pacific partners for 45 percent of their foreign trade. Among other Pacific countries, the figure is as high as 60 to 70 percent.
As local economies continue to expand at rates expected to remain the highest in the world (although not necessarily as high as the boom rates of the past decade), such interpendence is expected to grow. With those increasing links, however, come a complex series of challenges, like the already thorny issue of trade protectionism.
What is needed both to deal with these problems and to promote regional cooperation, experts say, is some sort of pan-Pacific organization - broader in scope than the Association of Southeast Asian Nations, a five-country economic development group started in 1967. Present discussion centers on the possibility of forming a Pacific Economic Community, although it is highly unlikely such an organization would be patterned after the European Economic Community.''
We don't want to be that,'' Dr. Somsakdi Xuto, dean of Thailand's National Institute for Development and Administration, told businessmen recently at the Los Angeles Chamber of Commerce's fifth annual Pacific Rim conference. ''We are very proud of ourselves.''
''Why should we want to be another EC?'' he asked. ''That's the European way - good for Europeans, but not for us. . . . We have a uniquely Southeast Asian style of consensus decisionmaking. We have lots of talking, lots of parties and informal gatherings before signing official documents. . . . We like to be a little more open-ended, and not so specific.''
* Energy and mineral resources. Energy exploration in the Pacific Basin has taken a back seat to development of resources in other parts of the world. Yet beneath this vast expanse of water, geologists say, may be some of the richest energy and mineral deposits on Earth.
It is in a large triangular section of the Pacific ocean floor, for example, that trillions of manganese nodules are found - porous lumps containing vital minerals. ''
The Pacific's got all kinds of minerals. You just name the minerals, they're there,'' says Michel T. Halbouty, a Houston geologist and petroleum engineer who in 1972 founded the Circum-Pacific Council for Energy and Mineral Resources, an international group of Earth scientists who meet every four years to discuss Pacific discoveries, research, and potential.
The basin is rich in minerals, Mr. Halbouty explains, because it is surrounded by ''a ring of fire'' - a chain of more than 300 active volcanoes - unparalleled on Earth and responsible for the creation of an ''untold wealth of minerals,'' he says. These same volcanoes also make the region rich in geothermal resources.
In addition, the Pacific Basin is believed to harbor rich deposits of oil. Armand Hammer, chairman of the board of Occidental Petroleum, says that China has the ''greatest unexplored offshore oil basin in the world today.''
According to Pu Shan, deputy director of China's Institute of International Studies, several American oil companies - including Occidental, Union Oil, and Getty Oil - already have begun bidding for a role in China's offshore oil development. In fact, China is so rich in oil, both onshore and off, says Halbouty, that within 10 years it could become the world's No. 4 oil producer, moving ahead of Mexico.
Although mining for deep-sea minerals remains mired in a thicket of unresolved international issues because of the ongoing controversy surrounding the Law of the Sea treaty, energy and mineral exploration in the Pacific will receive a large boost by 1984 when the first maps ever to chart the Pacific's mineral and energy deposits will be finished.
That work, sponsored by the Circum-Pacific Council, represents a $100 million effort by geoscientists from several countries. So far, 18 of the 43 maps have been completed and published. All are, or will be, available to the public for a nominal charge.
* Culture. Although most Pacific Basin discussion currently focuses on economic and resource issues, many observers argue that the debate must take into account the region's sweeping cultural spectrum if understanding between East and West is to be promoted.''
People talk a lot about the business side, exclusively,'' says Frank Gibney, president of the Pacific Basin Institute, a small nonprofit organization aimed at fostering greater understanding in and of the region. ''That's OK, but it's a mistake to cast the whole relationship in terms of business.''
Mr. Gibney and others like him contend, for example, that it's not enough simply to copy Japanese styles of management. It is necessary, they say, for Westerners to understand the Confucian and Buddhist cultures that have been the foundation for these skills, just as the Japanese have worked to understand the West.
Cultural differences, however, are not limited to East-West relations. Asian-Pacific countries are hardly a homogeneous group - and, like European countries, have had a history of intraregional animosities and differences.
But despite cultural differences and rivalries, the overwhelming force of Pacific developments is bringing the region together, not pulling it apart, observers say. Former Ambassador Hodgson explains: ''In the Pacific, North America's Calvinist work ethic has met, been fused with, and reinforced by Confucian principles. The result is something now rare - a unique region where human aspiration is actually matched by human striving. For real progress no better combination exists.''
Besides possible cultural pitfalls, there are other question marks hanging over the Pacific's development as the world's leader into the future. Although the region has enjoyed relative quiet in recent years - with most global strife centered elsewhere - there are potential clouds on the horizon which could disrupt the political stability so necessary to economic growth.
These include the Korean Peninsula, split between the communist North and Western-aligned South; the question of Soviet intentions in the region, particularly in Vietnam and Kampuchea; the already strained relationship between Taiwan and China; and the Philippines, where it is unclear whether stability will be maintained after President Ferdinand Marcos leaves the scene.
For now, however, the most pressing demand in the Pacific Basin is simply for greater communication, observers say. What is really needed, they add, is a widespread understanding and acceptance of the concept of a Pacific community and what that portends for the future - an understanding that, it is hoped, will lead to more cohesive, long-range policies, particularly by the US.''
It is important for us as Americans to come out of our cocoons, out of our European backgrounds, to see that the last part of the 20th century and into the 21st century is a century of the Pacific Basin region,'' says Cheng. ''We have to do much more than we have been doing to promote trade within this region . . . to understand them, and to help them understand us.''
This plea for historical perspective and foresightedness is perhaps best summed up by Jiro Tokuyama, author of ''The Pacific Century,'' who puts it this way in The Whole Pacific Catalog, a publication of the Pacific Basin Institute:''
History's biggest changes are generally hardest to perceive. The Egyptians in the ancient times were not aware of the emerging Phoenicians, who, engrossed in commerce and trade, paid little attention to the rise of the Greeks and the Romans, who in turn were ignorant of the Portuguese and the Spanish on the Iberian Peninsula.''
The Spanish did not realize the potential power of Great Britain, which was not far-sighted enough to see the United States taking shape in the tobacco and cotton fields on the new continent. This lesson of history teaches us to open our eyes to the change that is taking place right before us in the Pacific.''
For more information on the Pacific Basin, contact: The Pacific Basin Institute
PO Box 30158
Santa Barbara, Calif. 93105-1158 The Pacific Basin Economic Council
333 Ravenswood Avenue
Menlo Park, Calif. 94025 Circum-Pacific Council for Energy and Mineral Resources
American Association of Petroleum Geologists
PO Box 979
Tulsa, Okla. 74101