Most regional economies are in disarray. The collective Southeast Asian economy is smaller today than it was before the crisis broke. Many dormant ethnic and religious resentments have exploded in violence.
Democratic systems are under tremendous stress and a stinking tide of corruption is on the rise.
The dominant regional power, Indonesia, has lost the territory of East Timor that it held by force of arms for twenty-four years and is in danger of further splintering in a process commonly invoked as Balkanization. And, depressingly, the region is increasingly inclined to blame the West for its troubles. The holiday bombs are a clear symptom and a timely signal that the world needs to reconsider this asset that is fast becoming a serious liability. The effects of weak growth could compound with political difficulties to create the same downward cycle that occurred in Latin America in the 1980s. The crucial question must now be whether the sharp deterioration is a temporary relapse, or whether it was the quarter century of gains that was the aberration.