Southeast Asia: Book Review - dragons in distress - Confucian confusion.

Southeast Asia: Book Review - dragons in distress - Confucian confusion. - Dragons in Distress. By Walden Bello and Stephanie Rosenfeld. Penguin; 428pp; £7.99.

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Last Updated: 31 Aug 2010

Dragons in Distress. By Walden Bello and Stephanie Rosenfeld. Penguin; 428pp; £7.99.

Review by Dick Wilson.

Being a Newly Industrialised Economy (NIE) is a thankless business. You struggle against a heap of odds to pull yourself up from poverty, only to have a couple of West Coast sociologists throw the book at you for dereliction of human rights. They go on to predict your imminent collapse because you have caught some of the diseases of developmental middle age: labour unrest, dependence on imported components, and decline of low-tech industry such as textiles and garments.

This all stems from exaggeration. On page one Bello and Rosenfeld quote an eminent futurologist to the effect that, "South Korea, Taiwan, Singapore and Hong Kong have revolutionised the theory of economic development by showing the world how to skip over much of the industrialisation phase and plunge into the information economy" - growing three times faster than the US or EC into the bargain.

But in the real world there is no skipping of stages and no development without tears. The four Asian NIEs take their place in a continuum of economic modernisation in which Japan and southern Europe precede them.

Dragons in Distress has the remedy for the NIE's troubles: democracy. The message is hammered home: guided capitalism, "command capitalism" and authoritarianism must be booted out. Democratic participation, on the shopfloor and in the legislature, is what's needed. Not a word about the human raw material in the economic equation, or how it differs in East and West.

The economic facts are painstakingly accumulated, and afford abundant insight into the problems of the NIEs. Pollution, weak R and D and marketing inexperience are all vividly exposed. Singapore does not receive the same full treatment as Korea and Taiwan, though its authoritarian politics get a caning. The authors approvingly quote Ishihara's extraordinary view that Singapore's success is to be attributed to its experience of Japanese occupation. They also show poor judgment in arguing that ASEAN might open up its markets to Korea, in some form of industrial alliance.

Talk of Korean reunification, of Hong Kong's reversion to and Taiwan's collaboration with the Chinese mainland nevertheless opens up new vistas of labour pools, and economies of scale, which could do wonders to relieve the NIEs. They all faced the challenge of separation from their natural markets and sources. If that was the key to their success it will not easily be replicated elsewhere.

Since this book first appeared, authority has dwindled in the Confucian world. Democracy has taken a step forward in Taiwan and the iron grip of Singapore's Lee Kuan Yew is being relaxed. Recession in the West makes the state of the NIEs, by comparison, not quite as deplorable as these authors found them two or three years ago.

Dick Wilson is a freelance writer specialising in Asian economics.

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