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Introduction: Growth and Structural Change in the Second-Tier Southeast Asian NICs
Abstract
In September 1993, the World Bank published The East Asian Miracle: Economic Growth and Public Policy. Eight high-performing Asian economies (HPAEs) — Japan, South Korea, Taiwan, Hong Kong, Singapore, Malaysia, Thailand and Indonesia — achieved the highest growth rates in the world between 1965 and 1990. According to the report, the statistical chance of such success on a regional scale is extremely remote. Is East Asia growing rapidly as a region, or have many economies in the same region simply managed to get things right? What is East Asia’s success due to? The World Bank has dismissed the notion of an ‘East Asian model’ of development; instead, rapid growth in the HPAEs is attributed to the implementation of similar, market-friendly economic policies (World Bank 1993a: Chapter 6). The report concludes: in large measure, the HPAEs (high-performing Asian economies) have achieved high growth by getting the basics right... In this sense, there is little that is ‘miraculous’ about the HPAEs’ superior record of growth; it is largely due to superior accumulation of physical and human capital’ (World Bank 1993a: 5).
... To begin with, it is far from clear that the experience of the first-tier Asian newly industrializing economies can be replicated in developing countries today. For one thing, the development success of the first generation Asian " tigers " was predicated on a number of countryspecific characteristics (competent, goal-directed and insulated bureaucracies, etc.) not found in many other parts of Asia, Africa and Latin America (Keefer and Knack, 1997; Felipe, 2000; Jomo, 2001). For another, many of the state interventions (trade protection, subsidies, procurement, etc.) that were used to promote local industrial development in the past are no longer available to developing countries under today's international trade and investment rules (Lall, 2002). ...
... The practical implications of this will, of course, vary with a country's specific objectives, as well as the level of capabilities amongst firms within target sectors, and indeed, the economy as a whole. In fact, as acknowledged elsewhere, measures to promote technological upgrading are likely to fail if they are not closely tailored to national circumstances (Jomo, 2001). Nevertheless, drawing from recent work on technology transfer for environmental protection (Hecht, 1998; IPCC, 2000; Wilkins, 2002 ) and technological learning (Lall, 1992; Hobday, 1995; Intarakumnerd et al., 2002), it is possible to identify two broad sets of policies that will be needed to support the leapfrogging process. ...
It has been suggested in recent years that developing countries need not pass through the dirty stages of industrial growth that marred the past of today's developed countries. Instead, they may be able to bypass these by leapfrogging straight to modern, clean technologies as an integral part of capacity addition. This article critically reviews existing approaches to leapfrogging. It argues that they are not only characterized by considerable ambiguity, but also based on an incomplete understanding of the technological and policy requirements of cleaner industrialization. Consequently, the article goes on to offer a number of suggestions as to how current approaches might be advanced so as to better meet the challenge of leapfrogging. Amongst these suggestions is greater clarification of the specific targets for leapfrogging and policy intervention to accelerate the development of technological capabilities needed to select, absorb and innovate leapfrog technologies.
... Part of this Southeast Asian 'miracle' narrative is that Malaysia created a favourable environment for FDI and exporters by, as far as possible, relying on market forces and foregoing industrial targeting and financial repression. Yet, it is controversial whether Malaysia's reserved industrialisation policy is a suitable example for other industries or economies, because it was largely backed by natural resource extraction and foreign, particularly Japanese, manufacturers that exploited Malaysia's cheap labour as assembling and exporting platforms while under cost pressure at home (Jomo 2001). ...
Universities from varying institutional and geographical contexts have increasingly invested in offshore subsidiaries in the Malaysian private higher education sector. Literature on transnational education policy and management as well as economic‐geographic accounts of firms’ transnationalisation or public service provision have not investigated foreign providers’ direct investment and market access strategies in the higher education sector. This paper addresses these gaps, showing how and why foreign actors’ investment and market involvement in Malaysia have changed. Empirical data is drawn from qualitative interviews and policy documents. The research reveals that foreign universities have strategically modified their business partnerships and bi‐national accreditation to bypass and bend state regulation of market access as well as to restructure internal organisation and geographical configuration. The paper proposes conceptualising foreign higher education providers as transnationalising, reflexive networks within networks that respond to dynamic market access regulation by adopting firm‐like investment strategies.
... 2 7 Tokunaga (1992). Also refer Jomo (2001) for a brief account of Japanese investment abroad and relocation of production in Asia. ...
Nigeria is the largest economy in Africa, but it suffers from resource curse or Dutch disease where she is unable to leverage on her resource endowments to diversify into many other sectors of the economy. Her industrial capacity is very low due to infrastructure shortage. But the foregoing are motivated by rent-seeking and vested political power holders who rather will support implementing import-dependent policies. Consequently, it is difficult to adopt the latest technology and liberalize the economy for inclusive participation of the citizenry. Utilizing the New Institutional Economic (NIE) perspective, secondary sources of information and content analysis, the paper ascertained that protectionist policies of protecting nascent industries have not worked for Nigeria. For instance, closing the borders to protect local rice producers rather caused rice price volatility and inflation among others. Hence recommends a radical revolutionary change in the political economy will necessitate the needed reforms. All emerging economies in Asia passed through this stage of development.
From 2003 to March 2018, Malaysia showed increasing enthusiasm toward forging free trade agreements (FTAs). This article analyzes the factors that determined its attitude, focusing on: (i) why it is currently active; (ii) why it selects specific partners; and (iii) why it combines moderate with comprehensive liberalization. It is found that the interplay between ideas, institutions, and interests are important to explain the causes. First, both state interventionism and neoliberal ideas influence these outcomes. Second, within the competitive authoritarian institutions, neoliberal supporters have benefited from executive‐heavy policymaking processes, while the anti‐FTA groups failed to forge a strong alliance. Third, interaction between two veto points – the neoliberal executive and the resistant faction within the ruling party – created compromise and convergence in FTA policy. Ultimately, Malaysia has an “assertive but reserved” attitude toward reconciling differences between old embeddedness and new international practices.
The chapter explains the creation and resistance to change of Thailand’s centralized and fossil-fuel intensive electricity regime through a Sustainability Transition and Multilevel Perspective lens, with an emphasis on the sector’s political economy. The incumbent electricity industry has evolved from a state-owned monopoly to a partially-privatized industry structure dominated by the state utility and several large independent power producers. The analysis demonstrates how important global landscape shifts articulate with the sector’s domestic political economy, including a shifting global development paradigm from developmentalist state to liberal market principles, as well as the impact of waves of global economic crisis. The chapter highlights the role played by civil society coalitions in unsettling the incumbent electricity regime since the late 1970s, despite significant power asymmetries, through opposing problematic projects, advocating for progressive policy, and proposing alternative plans, values and visions for Thailand’s electricity sector. Important but small steps towards sustainability transition are identified, including greater energy conservation and distributed renewable energy generation, the creation of an independent regulator, and a small increase in public participation and accountability in the power planning process. The chapter argues that civil society has been—and will continue to be—important in shaping the incumbent electricity regime and often acts as a catalyst for transition towards sustainability.
A key priority for the Gulf Cooperation Council (GCC) countries is to create a dynamic non-oil tradable sector to support sustainable growth. Since export diversification takes a long time, it has to start now. We argue that the failure to diversify away from oil stems mainly from market failures rather than government failures. To tackle market failures, the government needs to change the incentive structure for workers and firms. Experiences of oil exporters that managed to diversify suggest that a focus on competing in international markets and an emphasis on technological upgrade and climbing the “quality ladder†are crucial.
This article seeks to answer the following research questions: Why did Malaysia and South Korea choose different economic policies to cope with the 1997 financial crisis? What caused or constrained them? Did they choose different policies, and under what contexts? For this, I examine structural determinants that led to the different policy choices including the nature of the economic crisis, regime types and political leadership. Meanwhile, many scholars have been less concerned with political factors in terms of the cause of the Asian financial crisis and its overcoming process. From the findings, this article argues that their different policy choices resulted from the interaction between economic and political factors. In particular, I argue that political leaders' leadership was the most crucial factor in the different policy choices of the two countries.
How successful are multinational corporations in extending their firm-based environmental standards to their subsidiaries and those subsidiaries' local suppliers in their global production networks in developing countries? We address this question through an in-depth case study of how Motorola, a prominent multinational electronics firm with an extensive global production network, is using a set of firm-based standards to meet several new stringent European Union environmental directives. The case study demonstrates that these firm-based standards appear to be enabling a major subsidiary and its suppliers in one developing economy to reduce the environmental intensities of their production activities. This finding suggests that the firm-based environmental standards of multinationals with extensive global production networks might contribute to a leveling up of environmental standards in subsidiaries and their local suppliers, rather than a “race to the bottom”, thus reinforcing the technique or intensity effects associated with open trade, investment, and technology policies.
Discourse on industry development and policy practice in late industrialization countries in East and Southeast Asia has predominantly tended to relate the emergence of new industries to ‘creation’ by the state and thereby to the role of state intervention or involvement in industrial growth and restructuring. On the other hand the role and position of (local) entrepreneurship in the genesis of new industries has been rather neglected, as little room was perceived for ‘autonomous’ development. Southeast Asian late industrialization is currently being confronted with the limits of development and expansion of specific (FDI-driven) export industries and thus with the necessity to devise new growth paths in industry (on the basis of high tech industries). This compels a reconsideration of policy practice and perceptions of modes of industry development on which it is based. In this paper we argue that a state-orchestrated ‘creation’ of priority industries is not the only possible route to new high tech industries in Southeast Asian late industrialization. This emanates from an analysis - based on field research - of the emergence and development of a recent growth industry in Malaysia, i.e. the manufacturing of automated equipment (or, automation industry) and its constituent firms in the Penang region. The analysis demonstrates that the mode of development of this industry conforms rather well to a number of notions from evolutionary economics on firm genesis and development in new industries. This suggests that successful industrial policies can be based on supporting an evolutionary ‘birth and development’ path, i.e. industry genesis and evolution as a more or less autonomous incremental process of the development of firms and their capabilities.
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