Will Re-armament Wreck the 'Asian Miracle'?

The Asian miracle faces two external threats, both related to re-armament. One is that the regional arms race will trigger open hostilities. The other is that renewed conflict in the Persian Gulf will trigger an oil crisis, choking Asia’s energy-hungry economies. The immediate danger on both fronts is limited. In the Asia, tangible ‘peace dividends’ from growth still far outweigh potential ‘redistributional gains’ from war, whereas in the Middle East the Arab-Israeli peace process remains on course. The long-run risks, however, are significantly greater. Asian growth will eventually decelerate, which implies a far thinner cushion to soften political disputes.