What price President Forbes?

PUBLISHED : Friday, 27 March, 1998, 12:00am
UPDATED : Friday, 27 March, 1998, 12:00am

From Asia's point of view, 'President Forbes' might not be a phrase that rolls off the tongue any easier than it does for many American voters. Nevertheless, the region's America-watchers might want to start thinking about it.

When Malcolm 'Steve' Forbes announced his candidacy for president in 1995, few political animals in the United States took the millionaire publisher seriously - including Mr Forbes himself.

He was initially a rather reluctant point man for the Republican Party's influential supply-side economics faction, which had lost faith in the inconsequential Bob Dole and whose other key allies had refused to run.

But Mr Forbes did not take long to assume the mantle with confidence. As a child he had followed his father round an unsuccessful run for governor of the family's home state, New Jersey, and developed into something of a political junkie, memorising electoral statistics and names of local and national politicians. As an adult, he took to his new persona surprisingly quickly.

Armed with US$30 million (HK$232 million) of his personal wealth and one major policy cornerstone, the introduction of a flat tax rate (arguably one policy more than Mr Dole), he made an unforeseen impact on the Republican primary season. He won primaries in Delaware and Arizona, a better showing than candidates with a much higher political or voter profile, including right-wing populist Pat Buchanan and moderate former Tennessee governor, Lamar Alexander. In the process, he shaved several points off eventual nominee Bob Dole's political capital.

The Forbes phenomenon was not without some cost - and not only to the candidate's wallet. He was criticised for being a one-trick pony - the trick being economics - with little to offer on social or foreign policy issues; for his lavish spending on negative advertising against his opponents; and, by the party's conservative wing, for not falling into line on abortion and other Christian values issues.

But taking some lessons from his own book - the sharp-witted 'capitalist tool' that is Forbes Magazine - Mr Forbes put best business practices to political use, learning from the mistakes and adapting quickly to correct them.

Although he says he will not decide on whether to enter the 2000 race until after this year's Congressional elections, he is already semi-officially in the race, far earlier than his putative rivals, building support in key areas which failed him last time around.

He runs his own policy group, Americans for Growth, Hope and Opportunity, with 110,000 members and rising; he has been hitting the trail across the country, pitching ideas at gatherings of the party faithful; and - perhaps most crucially - has made friends with the party's conservative wing, strengthening his anti-abortion stand and winning a key new constituency in the process.

During the last campaign, one conservative activist said that getting Forbes to take a position on abortion was like 'trying to nail a jellyfish to the wall'. By January this year, such was the transformation that at the annual meeting of the Conservative Political Action Committee, delegates voted him their number one choice for Republican candidate in 2000.

Whether Mr Forbes, the Ivy-League, old-monied, blue-blooded East Coast millionaire, can capture the nomination of an increasingly new-money, middle-class (and Southern) party is now the big question. And its logical follow-up: can the closest thing to an American version of a member of the landed gentry win the hearts and minds of the nation's ordinary people? At the moment, though, the publisher is reaching out to Asia and the rest of the world for business reasons rather than political ones. He has just launched Forbes Global Business and Finance , in an attempt to push the Forbes Magazine world view into the global marketplace.

Calling the magazine 'more of a drama critic' than a bearer of spot news, he defines its mission as analysing, dissecting and drawing conclusions from what's taking place in international business.

'Ten years ago that kind of journalism would not have worked overseas, and there was not the global perspective you see more of today,' said Mr Forbes in his headquarters on Manhattan's Fifth Avenue.

'Now, the environment is different and we feel there's a great future for this kind of magazine.' For observers in Asia, it is the foreign policy arena in which Mr Forbes' political credentials will be judged, and a clear definition comes from his analysis of the current economic crisis. If his reaction to it is much to go by, the good news for Asia's leaders and businessmen is that he believes they should be left alone to make decisions; and that, because he also believes in the inherent reason of market forces, the right decisions will come in due course.

Such a world view has naturally put him on an intellectual collision course with the International Monetary Fund.

'The collapse of the [Asian] currencies is almost directly attributable to the IMF,' he said. 'Yes, the countries did have systemic flaws . . . but the IMF violated the first principles of medicine, which is that you don't harm the patient. And their policies of devaluations and tax increases have severely harmed these patients.' With global finance ministers currently scratching their heads over a so-called 'new architecture' to reform economies in the wake of globalisation pressures, Mr Forbes' solution is blunt.

'They should appreciate that they don't know what to do, and that any structure they come up with is ineffective and will do more harm than good.' The pressure of the market-place is what will eventually force countries like Indonesia into 'doing what's good for them', he suggested.

'What turned Britain around in the late 1970s? It wasn't the IMF, it was Margaret Thatcher and her policies.

'If a country wants to self-destruct, you can't stop them, but if they want to prosper and be part of the global community, there are things they will have to do.' In Forbes' book, these things revolve around his four principles of economic growth: sound money with low interest rates; low taxes; the rule of law (including property rights); and minimal bureaucratic interference in business.

Hong Kong is something of a model for Mr Forbes, who has studied the SAR's flat-tax system when putting together his own version. He believes it is too early to tell how the transition to Chinese rule is going, but said he was encouraged by Beijing's decision to let SAR officials deal with their own mini-currency crisis last autumn.

On China, Mr Forbes has strong views, but he is unlikely to fall into the trap Bill Clinton set for himself in 1992, when he made the campaign promise never to compromise with the 'tyrants in Beijing' - words which have haunted his China policy, even to this day.

But could President Forbes do what President Clinton cannot? 'First of all, I would have a China policy, which we don't now. When Clinton first came in, he made some very bold statements and then spent the next six months trying to figure out how to get out of them. I'm not surprised Beijing takes his statements less seriously than he does himself.' The Forbes policy would consist of maintaining a strong military presence in Asia, while encouraging close business links and the kind of openness which could lead to the same kind of liberal reforms which turned Korea and Taiwan into democracies.

Unlike Bill Clinton, he believes targeted sanctions - for example against PLA companies - can exert influence on Beijing's human rights conduct without risking the overall relationship.

'The key with China is that they have to understand the rules of engagement. When China does something indefensible, they hate it when the spotlight is put on it. It forces them to do some changing.' Mr Forbes, who speaks authoritatively on Asia's history and current affairs, has put much meat on the foreign policy bone since his 1996 campaign.

But, for now, his goal is to change the shape of America's political agenda - something he believes is possible whether or not he ever makes it to 1600 Pennsylvania Avenue.

He said his campaigning has helped keep on the front burner his plans for reforming the tax system, privatising social security, improving schools and fixing the blighted health care system.

'As result of 1996, the tax debate is now a real one, and, contrary to 1996 when everyone denounced it, everyone now feels the need to at least pay lip service to simplification. That's a huge move forward,' he said.

'In another area, social security, I brought up privatising it in 96, and the whole mantra of the party was, 'don't even mention it, don't open yourself up to what skewered Reagan in the early 80s'. Now everyone's talking about it.' He added: 'If I do run, it will be with the intention to win, but even if I don't, I hope the landscape will be positively changed.'