Multinational enterprise business behaviour and industrialization in ASEAN countries

This paper gives a progress report of a research project focusing on the competition of Japanese, US, and European firms on ASEAN markets and their impact on economic development both in home and host. countries [Hiemenz, 1984; GroB, 1985; Langhammer, Hiemenz, 1985; v. Kirchbach, 1985], The subsequent sections provide an analysis of some aspects of the contribution which the business behaviour of foreign firms from different industrialized countries may have made to industrialization and export expansion in ASEAN countries in the 1970s and early 1980s. The analysis presented below is in the tradition of Sekiguchi, Krause [1980], Kojima [1978; 1985], and Lee [1983; 1984] and supplements recent work by Ariff, Hill [1985], Hill, Johns [1985], and Hill [1985].

The future of Asia-Pacific economies: A view from Europe

Major disturbances in their global environment such as the world-wide recession in the early 1980s, in increasing protectionism in the EC and the US, large exchange rate fluctuations, high and volatile real interest rates and commodity price shocks have not prevented developing Asian countries from accelerating economic and social progress in the 1980s. Real per capital income grew much faster than in the 1970s both in South and East Asia, and the income gap between the Asia Pacific region and industrialised countries narrowed substantially (Table 1). Projections of e.g. the World Bank [1990] and the Nomura Research Institute [Kwan, 1990] indicate that these favourable trends are likely to be sustainable throughout the 1990s. Estimates of per capita income growth range from 5 to 7 per cent for East and Southeast Asia and around 3 per cent for South Asia. The good prospects for the coming decade are, nonetheless, overshadowed by rising uncertainties and concerns about persistent and severe trade imbalances, the emergence of trading blocs and the future destiny of the former socialist economies.

Asian-Pacific leadership: Implications for foreign economic policy of Japan and the US

In the 1980s, the Western Pacific hemisphere ranging from Japan and the PR China to Australia and New Zealand has remained the growth pole of the world economy. Real per capita incomes of East and Southeast Asian developing economies grew even faster in this decade than in the 1970s [World Bank, 1990: Table 1.3] despite major disturbances in their global environment such as the world-wide recession in the early 1980s, increasing protectionism in the EC and the US, large exchange rate fluctuations, high and volatile real interest rates, and commodity price shocks. The integration into the international division of labour in manufactures was a driving force behind the favourable economic performance of Asian-Pacific economies in the 1980s. This is reflected in the growing importance of manufactures and in particular capital goods in their export basket. In 1988, about 44 per cent of all developing countries' exports originated from the Asian-Pacific region [World Bank, 1990: Table 14], and Asian NIEs and Near NIEs participated overproportionately in the expansion of highly income elastic intra-industry trade with capital goods [GATT, 1989: Table 4].

Development strategies and foreign aid policies for low income countries in the 1990s

Most low income countries are characterised by a high dependence on exports of a small number of agricultural or mineral commodities. In the 1980s, the economic and social performance of these countries has been extremely dismal. Declining per capita incomes, stagnating food production, and an increasing foreign debt burden indicate a failure of development strategies applied in these countries as well as of foreign aid policies pursued by donor countries and institutions. Low income countries have suffered from a combination of adverse commodity price movements and an increasing inability to adjust to a changing external environment. Adjustment has been hampered by conflicting and often misguided policy signals, weak economic institutions, and a rapid deterioration of public management in general. These shortcomings were rooted in fundamental social conflicts, in particular the "personal rule" of parasitic elites or the emergence of a non-productive state class. A development strategy for the 1990s has to pave the way towards economic diversification and a better integration of domestic markets in low income countries. Such a strategy requires the discrimination of the commodity producing sector to be abandoned, a return to macro-economic stability, and institution building. Necessary prerequisites for success are improved access of low income countries to the markets of industrialised countries and the necessity to convince the ruling elites to sustain policy reform. Industrialised countries have hitherto neglected the political economy of decision-making in low income countries. Neither stricter conditionality nor more foreign aid or more sophisticated international commodity policies alone will be able to turn the tide. Policy reform has to be initiated from within low income countries with foreign donors mainly playing a catalytic role. For this reason, foreign aid policies should give priority to a strengthening of political bargaining processes within low income countries and to supporting actually implemented reform programmes. Such a foreign aid policy for the 1990s would require new criteria for aid allocation among countries and new priorities for aid programmes and projects. To remove politico-economic constraints and institutional weaknesses, foreign aid should focus on the development of a well-functioning domestic economic order, human resource development, and financing of poverty or ecology-related programmes. If some governments of low income countries are notoriously unwilling to improve fundamental economic conditions donors should not hesitate to reduce their efforts to the supply of emergency relief. --

Regional integration in Europe and its effects on developing countries.

Wirtschaftsunion; EU-Binnenmarkt; Außenwirtschaftspolitik; EU-Staaten;

Effective protection of West German industry

The establishment of the Common Market, a more inward looking trade policy on the part of the United States and, last but not least, the urgent demand of less developed countries for free access to the markets of the highly industrialized nations have revived international interest in the impact of foreign trade regulations on a country s domestic industry. One of the major points of interest is to analyse how trade regulations influence the comparative costs of domestic industries and consequently the structural pattern of industry. Protective measures such as tariffs, import quotas, subsidies and taxes alter a given industrial pattern by providing some industries with an advantage, while the economic conditions of others remain unchanged or even worsen. In the course of international trade liberalisation, reductions of trade barriers will create a need for adjustment processes in almost all economic activities. Effective rates of protection may help to achieve a better and smooth adjustment by providing information on the impact of trade regulations on gross production.

Export liberalization and the outward oriented trade regime

The purpose of this essay is to re-assess the case of outward- oriented trade regimes in the process of economic development. The nature of outward-orientation is briefly explained in the next section. As developing countries usually start their industrialization through import substitution strategies, the shift from an inward- to an outward-oriented trade regime raises questions concerning the set of economic policies to be reshaped, the timing of the policy reform, and the feasibility of such changes, which all are discussed in the third section. The fourth section provides evidence on successful as well as on unsuccessful liberalization attempts undertaken in the seventies and traces the causes for success or failure by relating the country experiences to the policy framework for export liberalization outlined in the previous section. In the fifth section, the revival of export pessimism is evaluated.

Employment creation in less developed countries: A cross section analysis

Research in the field of economic development and respective discussions in the political sphere are presently focussing on two major issues: the social inequality within the third world and the continuously widening, economic gap between developing (LDCs) and developed (DCs) nations. The remedy for both problems suggested by UNIDO, the UN General Assembly and various other institutions is a new international economic order''. One aspect of this new order is the claim for a 20 per cent share of LDCs in total manufacturing production of the world by the year 2000. Given a 6.8 per cent share of LDCs manufacturing output at present (in 1973) a tremendous structural change will have to take place in third world economies and in the international division of labour in order to achieve the 20 per cent target. The purpose of this paper is to analyse the past structural change in LDCs and to outline some of the implications of the intended increase of their share in world industry. In particular, the paper seeks tentative answers to such questions as - whether the necessary structural change is feasable and under which conditions it is likely to occur; - what the prospective employment effects of such a strategy would be and - whether alternative strategies might offer better chances in reducing unemployment and poverty within the third world. To fulfill this task in the first part of the paper, a cross section analysis is applied to a sample of LDCs and DCs respectively. The focus is to identify major determinants of sectoral patterns of production, employment and productivity in both country groups and to find out whether there are differences among the various patterns or among country groups. Based on these estimates some projections of production and employment patterns are made in the final section of the paper and some consideration is given to the potential contribution to employment creation in various economic activities.

Regional integration among developing countries : opportunities, obstacles and options.

Wirtschaftsunion; Entwicklungsländer;