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AbstractThe nations of the Asia‐Pacific Region, including its three sub‐regions of Northeast Asia, Southeast Asia, and South Asia, face major potential dangers in securing the energy needed for their economies. This paper focuses on these dangers and discusses the future prospects for these vulnerable nations, including their need for closer cooperation. (JEL Q32, Q34, Q40)

From a political standpoint, post‐communists systems include both democratic and non‐democratic nations. From an economic standpoint, they include both collapsing and expanding economies. All four logical possibilities exist for post‐communist political and economic systems. The Czech Republic is an example of a democratic political system and an expanding economic system. Russia is an example of a democratic political system and a collapsing economic system. China is an example of a non‐democratic political system and an expanding economic system. North Korea is an example of a non‐democratic political system and a collapsing economic system. The fact that all four logical possibilities exist suggests that democracy is neither necessary nor sufficient for good economic performance. However, democracy is certainly a value in itself that requires certain basic institutions, including free and fair elections, the orderly transfer of power to those elected, the rule of law and the separation of powers, and the protection of individual freedoms and basic liberties, including those of speech, press, religion, assembly, property, and economic opportunity.Economic policies, rather than the form of government, determine the results for an economy. Russia and China, the two largest socialist economies, followed very different economic policies and experienced radically different outcomes. The failure of "shock therapy" economic policies for transition to a market economy in Russia is related to its use of the Washington Consensus SLP package of stabilization, liberalization, and privatization, as recommended by the World Bank and the IMF. The success of Deng's economic policies for transition to a market economy in China is related to its rejection of the SLP in favor of the ICG approach of institutions, competition, and government. Other interesting cases are those of the Czech Republic and North Korea.Those nations in which both political and economic reforms have been simultaneously successful, such as the Czech Republic, are generally small, homogeneous European nations with a historic work ethic, with a relatively short period of socialism, and with support from neighboring advanced industrialized nations. There is great difficulty in simultaneously establishing both democracy and a market economy without a very special set of circumstances. Thus, it is necessary to determine a sequence for political and economic reform. Ultimately, however, the ideal of both democracy and a market economy may be attained even in nations without special circumstances and external assistance, with Russia eventually turning its economy around and with China eventually reforming politically into a democratic nation.

AbstractRussia has recently embarked on a dramatic program of privatisation as part of the process of shock therapy which aims to convert the command economy to a market economy. This program has been undertaken in the absence of a well‐developed set of institutions needed for the proper functioning of a market economy. These institutions include a legal system, a related system of property rights, a credit system, a system of commercial banks, classified advertising, an accounting system and others including a sound currency and a social safety net. In the absence of these institutions the incentives facing agents in economic transactions have been perverted. This has led to criminalisation of the economy, dramatic falls in production, loss of confidence in all aspects of commerce, and political instability. The recent Russian experience of privatisation has important lessons for other economies in transition, for developing economies and for economic theory.