At 8:57 am +0800 15/2/98, Dennis R Redmond wrote:
> On Sat, 14 Feb 1998 kjkhoo@pop.jaring.my wrote:
>
> > 7. Placed within the context of the current phase of
> > globalization, I would suggest that E Asia, with the possible
> > exception of Japan, has been effectively put in its place -- and
> > I think the media has caught on to this with alacrity.
>
> Ah, but this is the problem with most analyses of East Asian capitalism --
> which either talk about the evil things Western capitalism is doing, and
> talk about the poor, impoverished tigers, or talk about the evil things
> comprador elites in SE Asia are doing to their poor, impoverished
> citizens...
Whatever in what I wrote merited this retort is beyond me. So
I'll let it pass, with the exception of the last phrase - "the
evil things comprador elites in SE Asia are doing to their poor,
impoverished citizens". I would not wish to cast it in such
moralistic terms, but yes, do take at look at what's happened
and what's happening to the citizenry. Without nationalist
intent, I would just point out that Malaysia is an exception of
sorts (it is largely without the sort of grinding poverty and
hardship found elsewhere), but not altogether.
I do not wish to expose my ignorance regarding the organization
of Japanese capital, except to note:
a. did I suggest Japanese capitalism to be identical with US or
European capitalism? Deferring to your greater knowledge, I
accept your point that Japan is governed by keiretsu, gigantic
cross-industrial holdings, organized around giant banks and
insurance firms, that economic policy is not made by the Nikkei
punters, but by government and the major multinationals and
keiretsu. However, would you care to explain to what degree is
this that much different from other places? Is US economic
policy made by Wall Street punters (is it ever made by 'punters'
anywhere?), or is it made by the interaction between government,
major multinationals and their lobbies? Aren't the US and
European economies organized around giant banks and insurance
firms, major multinationals, and a significant degree of
cross-enterprise holdings? Wait; don't jump -- yes, the Japanese
state does play a different role if compared to the US or
European states.
b. there are indeed some doubts as to Japan's ability to
jumpstart Asia at this juncture -- put it to policy failures,
put it to the financial collapse of 1989/90, to mean-mindedness,
whatever; I can't say -- but I do believe that there's a
consensus of sorts that Japan's not in too great shape these
days. Again, a signal is the media -- including pieces saying
how Japan should adopt flexible manufacturing, just-in-time
production, etc. All a little laughable in the context of the
books and articles coming out in the latter half of the 1980s,
but there it is. Apologies if I'm ill-informed on the matter,
just going by the Financial Times, Economist, Business Week;
don't have much access to the works of scholarship. But I hasten
to add that the laughable stuff is not in the likes of the FT,
although it does sometimes show up in the Economist and Business
Week.
c. as for "the real story of the devaluations is not the fall of
the rupiah versus the dollar, but the strength of the yen
vis-a-vis the other East Asian currencies" -- I don't quite
follow.
As for the direction of exports, let me just speak for the
little corner of the globe I know a little about. Take 1975,
1985, 1990 and 1996 percentage shares for Malaysia's direction
of exports:
US Europe Aust Japan S Korea PRC HK Taiwan ASEAN
1975 16 23 2 14 na 1 na na 24
1985 13 14 2 24 na 1 na na 26
1990 17 15 2 16 5 2 3 2 23
1996 18 14 2 13 3 2 6 4 28
1985 was a recession year, globally I believe. Total value (in
Malaysian currency, nominal) was 9.2 billion in 1975, 38 billion
in 1985, 80 billion in 1990 and 197 billion in 1996.
These figures, of course, don't tell the whole story. A healthy
proportion of the exports to ASEAN went to Singapore and a good
proportion of that was for re-export to onward destinations. A
bit more below. But the table does suggest that your scenario of
Japan becoming the major destination does not quite hold, at
least for Malaysia.
d. I guess what got your goat up was the phrase "put in its
place". Aiya, a manner of speaking-lah. Wouldn't want to string
a whole structure of explanation on that; nor any hint of
conspiracy. But you'll forgive me if I stick by my view that the
meltdown has been seized upon with alacrity by the media -- you
want quotes, chapter and verse, whole articles, whatever -- by
now I have a few megabytes of them, courtesy of the Internet.
> By "strategy breaking down" I meant the simple export-push strategy of the
> Sixties, where the point was to dump cheap textiles or labor-intensive
> goods in American markets. That strategy was gradually replaced in the
> Eighties by a more nuanced form of development: internal Asian markets
> began to expand, Japan became the major destination for Asian exports and
> not America, and the commodity mixture turned high-tech.
OK, again I'll only speak for the tiny corner of the globe I
know somewhat. The EOI of the late 1960s, as far as Malaysia was
concerned, had much to do with off-shore processing in the
semiconductor industry. So much so that by the end of the
decade, manufacturing was the second largest export after
commodity exports, and semiconductors were the single largest
component, I believe 1/2 of value, of manufactured exports. By
1990, manufacturing was the largest export, with semiconductors
continuing to dominate.
As for the commodity mixture turning hi-tech, that depends on
destination. That was true of the US which in 1985 was the
destination of 18% of manufactured exports (SITC 1+5-8),
compared to 11% for Japan -- and 1985 was a recession year when
export proportion to the US fell overall while that to Japan
rose (table above). By 1990, the US absorbed 27% of manufactured
exports, while Japan only took 8%; Singapore took 27%, but with
the note regarding Singapore, and Europe 19%. This pattern holds
good into 1997 (Jan-Jul) where the proportions are 22% to the
US, 11% to Japan and 23% to Singapore. In 1996, the last full
year for which statistics are readily available, the proportions
were 23% to the US, 11% to Japan, 22% to Singapore and 15% to
Europe.
Total value of manufactured exports (Malaysian currency,
nominal) was 4.5 billion in 1985, 44 billion in 1990, 141
billion in 1995 and 152 billion in 1996.
In comparison, in 1996 (last full year) Japan absorbed 58% of
the saw logs exports, 14% of sawn timber exports and 22% of
petroleum exports.
Evidently, at least for Malaysia, what happened between
1985-1990 when we went from recession to 10% growth doesn't
exactly accord with the picture you paint. I believe -- at the
risk of seeming foolish -- that the same picture broadly holds
for NE/SE Asia. Aiya, the period from 1987, when the upturn
started to 1997 was one crazy time-lah.
> Your typology, though, is basically correct; whereas the
> first NICs, like Taiwan and Singapore, built powerful developmental states
> and carefully screened imports and pushed exports, the second
> generation of tigers relied on foreign direct investment and the tap-on
> effect of the tiger boom, plus lots of hired money. But Thailand et.
> al. never developed a coherent developmental state, mostly for good
> historical reasons (lack of Cold War American subsidies, and the fact that
> the Vietnamese and Chinese, whose state apparatuses were forged in the
> heat of epic world wars and revolutionary struggles, beat them to the
> punch).
While it may be tempting to do so, I don't think one should lump
Taiwan with Singapore. Better Taiwan and S Korea -- the pattern
of development, the Cold War, the state trajectory, somewhat
parallel. Then perhaps HK and Singapore -- a lumping of
political contrasts but of significant geo-economic parallels.
Then the other ASEAN states, more or less.
I have a special affection for Thailand simply because they show
that governments can come and go, but things sort of carry on;
they can have one coup after another and yet have perhaps the
freest press outside the Philippines; also the only place where
one can go demonstrate (risk getting killed) but get some
support from the king, bring down a government. And Thais can
have no illusions about their government, yet willingly put
their gold down for their country. So don't bad-mouth Thailand,
OK?
But I'd think that Indonesia and Malaysia both qualify as having
developmental states, if doing things somewhat different from
Taiwan/S Korea. And you perhaps overestimate the coherence of
the Vietnamese developmental state -- for various reasons,
including the Hot/Cold War, Vietnam was perhaps even less
coherent than Thailand as a developmentalist state in the
material period in question; it's coherence was directed towards
other concerns.
> > Also one query: Dennis R writes that "Singapore is propping up
> > Malaysia". What is the basis for saying so?
>
> Singapore has huge investments in Malaysia, and is tied in innumerable
> ways to the UMNO's developmental state. One interesting example:
> Singaporeans spend something like 3 billion in Singaporean dollars in
> Malaysia just as tourists. This is money which can be immediately recycled
> for investment, savings, defending the currency etc. This is undoubtedly
> why the collapse has been less severe in Malaysia than in, say, Indonesia.
Hey, you got to share this with me -- the way in which Singapore
is tied in with UMNO's developmental state. I knew there was
something going on with all this tap-dancing, but haven't been
able to put my finger on it.
As for your suggestion that Singapore is "undoubtedly why the
collapse has been less severe in Malaysia than in, say,
Indonesia", I'm sorry I can't give you the comparative figures
without some work, but I would recommend that you do look again.
Again, no nationalist intent at work, just that I don't think it
squares up.
Khoo Khay Jin