I'm certainly no specialist on this since I'm supposedly working on
things which are completely `irrelevant to our present urgent concerns'.
But more than fifty people here at the Research for Pacific and
Asian Studies at ANU in Canberra are working full-time on this `relevant
issue' of East - and Southeast Asian economic development since 1990, so
nobody will miss me.
The irony of this is that all those 50 pundits did not predict the
present economic crisis. Thus books from 1995 and 1996 of which I have
review copies laying in front of me are all presenting `irrefutable'
evidence that Southeast Asian economic growth is sure to last for several
more decades. What is even more ironic is that the same pundits who were
praising authoritarian regimes as being more friendly to investment a few
months ago are now pleading that Indonesia or Singapore should adopt
democracy - and what I find irksome is that the same people who five months
ago had a very good explanation of why the `Asian model' worked now have a
good explanation of why it couldn't have worked. So much for the
`scientific' claims of economics. What good would astronomy be if it
couldn't predict the course of a commet - or, rather, if some had predicted
it but three years too early, others had expected it hunderd years later and
still others denied the existence of a commet altogether !
When the Romans conquered Greece they took a number of Greek orators
as captives to Rome - one of those orators dazzled the Romans by making a
speech in which he irrefutably showed one thing to be true and subsequently
making a speech in which he equally irrefutably showed precisely the
opposite to be true. The senators urged that these Greeks were to be
executed as they had a bad influence on youth and on the public morale and I
sometimes wonder what the Romans would have done with our economists and
social scientist working on `relevant' topics.
Anyhow, those personal grudges aside, I have four questions:
1.) Dennis Redmond says the SE Asian countries are going to sell
their products in Japan since Nippon has heavily invested in SE Asia.
Surely, the Japanese were already considering bail-out packages for Asian
countries six months ago, but is there any indication they are going to open
up their market or at least facilitate imports ? This would constitute a
true revolution in global trade since, if they were going to do this, I
don't see how they could refuse access to other Pacific rim countries - in
casu US or Australian or Canadian agricultural products which would destruct
the Japanese farmers. I think all of this is very unlikely but who knows -
maybe the keiretsu are now more powerful than the farmers' lobby. I don't
know - in the rest of the core - e.g. in the European Community the farming
interests are nearly as powerful as industry - perhaps more: as European -
or US - politician there are two groups you should never tamper with as that
equals political suicide: pensioners and farmers.
2.)Dennis Redmond writes too that Japan has vast reserves of capital
- no doubt - but why should the keiretsu want to `jumpstart Asia' ?
Capitalists - let alone if they are pension-funds who in Japan as elsewhere
dominate investments - normally invest in what promises to be the most safe
and profitable investment - thus, I think that already more Japanese capital
has been invested in safe US-state bonds and US real estate than in
Southeast Asia. Given that this crisis shows that Southeast/East Asia is a
risky investment - as the Barring-crisis already had shown - one should
rather expect more investment in the US and in Europe.
3.)Regarding Khay Jin's excellent posting I don't see why
liberalisation of restraints on global banking, anti-trust regulation etc.
should lead to shifts within the core. Because banking very much depends on
information, something which is build up through a wide network of contacts
very gradually, labour costs are hardly a consideration and banking is not
necessarily dependent on the location of commodity-trade, I think banking is
one activity which tends to stick pretty much to a single location for long
periods - essentially because all the main banks are already there.
Amsterdam was the world-banking center in the seventeenth/eighteenth century
and Dutch banks are still amongst the biggest European banks and its
successor, London, is still the biggest center of capital trade in the
world. In fact, the collapse of several Japanese banks over the last months
would give London even a bigger edge over Tokyo - theoretically its main
competitor - and the apparently structural problems with the German economy
would give an edge over Frankfurt too - one reason why Britain now wants to
join the EMU of course.
4.)My main problem - is the Asian economic meltdown a world-wide
crisis as most contributors are arguing or at least a portent of it ? If so
- one would have expected a fall of the index-rates of stock-exchanges
throughout the world. But in Amsterdam, for example, the rates slightly
dropped and then went up again, likewise the Asian economic meltdown had no
influence whatsoever on the Dutch economic growth-figures (and the
Netherlands is actually a country which has relatively big interest in
Indonesia). Nor do I see a world-wide drop or rise of commodity-prices, a
deep rise or fall of the dollar etc. This seems to me rather one of those
typical cases in which one peripherial region for some time shows rapid
export-led growth and then begins to stagnate again. Latin America is the
typical case throughout the twentieth century but who still talks about the
Persian Gulf as a new rich boom region too ?
But probably I am altogether wrong, I promise sincerely that my next
posting will be about something which is interesting but completely
irrelevant again.
Dr. R.J.Barendse
RSPAS - Canberra
Peace Research Centre
Research School of Pacific and Asian Studies
Australian National University
Canberra, ACT 0200, Australia
Tel: +61-6-2492259 (Wk)
Tel: +61-6-2675324 (Hm)
Fax: +61-6-62490174