Is Thailand more expensive than the Philippines

Southeast Asia: the boom in a critical phase / by Rolf Hanisch. - Bonn, 1997. - 15 pp. = 58 Kb, text. - (FES analysis)
Electronic ed .: FES Library, 1998

© Friedrich Ebert Foundation

*After the steep rise of the last few decades, the economic boom seems to be in the five ASEAN founding countries - Thailand, Malaysia, Singapore, Indonesia and the Philippines - are now slowing down.
*The GNP of ASEAN 5 grew from nominally approx. 20.5 billion dollars (1965) to 521 billion dollars (1994), this doubled the proportion of 330 million inhabitants (6 percent of the world population) at World national product to 2 percent. The GNP of ASEAN 5 therefore only corresponds to that today Canadas (29 million inh.) And is about a quarter of that of Germany (82 million. E.) - but it is almost twice as high as that of sub-Saharan Africa (572 million E.).
*Economic difficulties in the electronics industry and labor cost problems in electronics- and Apparel industry suggest structural bottlenecks: wages and unit labor costs that theirs Increasingly losing competitiveness, infrastructural and environmental problems that hardly can be ignored.
*The companies react by multilateralising their production sites, which are exporting to Southeast Asia now also venture capital. Thailand and Malaysia and - from a significantly higher level - Singapore must now also export more technologically sophisticated products. However, this is where the shortage now begins Skilled workers, technicians, engineers and managers as well as in their own research capacities noticeable.
*So far, growth has largely been based on cheap local production factors (land, raw materials, Labor) and their efficient combination, but not on technological innovation. The material one Infrastructure and human resources no longer meet the new requirements and become effective more and more expensive. An industrial growth based on low wages and labor costs is occurring in Thailand and Malaysia is increasingly at borders and has not been in Singapore for a long time due to the high wage level possible, especially since there are even cheaper competitors in China, Vietnam, and perhaps also Myanmar in the future.
*The rate of growth in exports and the economy as a whole has flattened out, as has the willingness to invest foreign venture capital is declining, the current account deficits of Thailand (1995: 8% of GDP, 1996: 7.8%) and Malaysia (1995: 8.7%, 1996: 6%) are becoming more and more serious and are now being discussed as a problem. In hangover prevails in these countries-, in Thailand even a crisis mood.
*Labor disputes are increasing in the region. They are an expression of something that is becoming more and more necessary Paradigm Shift in Economic Strategy. There is distrust of those who are unstable in parliament Multi-party governments. In Indonesia, the opposition is forming because of the question of succession to the aging authoritarian heads of state, although not acute, it exists.

Southeast Asia has seen remarkable growth in recent years that is otherwise only to be found in East Asia. In spite of this achievement should not be overlooked though be that the economic power of the whole Region just that of a medium-sized one(old)Industrial nationhas reached.Thisgrowthhas beenofthesinglesn parts of the region unevenly progressingdriven. In some countries it was a long time, mostly for political reasons, blocked. These blockages have since been released repealed, so that it is here now too to significant growth is coming. Thecountries SE Asia are currently on one different levels of development. You wise some similarities, but also considerable Differences on.

Only the resource-poor city-state of Singapore began its development right away by accelerating the export industrialization of light industries (initially) on the basis of low wages and labor costs. The resource-rich territorial states initially trusted in the valorisation of their natural wealth for export and relied on the economically problematic domestically oriented industrialization. Even in the production of raw materials for export, some countries have already shown considerable innovative strength in discovering new markets for agricultural products, so that they have been able to diversify the product range for the world market. Only later did they start building export industries (especially electronics, clothing) on ​​the basis of low wages, which enabled their exports to achieve double-digit growth rates for many years.

Growth is only possible if investments are made; high growth requires high investments that are carried out efficiently. The efficiency of the investments and the sustainability of the added value they generate depend largely on the type of financing. The booming countries have extremely high investment rates, but also very high savings rates, through which most of the investments in the country can be financed. The savings gap can be covered to a greater extent than in other countries by the inflow of foreign risk and investment capital. While foreign loan financing on non-commercial terms ("development aid") played a subordinate role in the three most important boom countries, taking out commercial foreign loans is of varying importance.

With its world market-orientedDevelopment strategyaLongtimeafluent paradigm in developmentpolitics refuted the one about the world marketmediatedinhibit growththe "dependency" instead of an "autozentrated development "warned. Although the possibility of externally oriented growth was not denied, it was rather assumed that the bulk of the population would grow into poverty, that regions and economic sectors would drift further apart, and that progress on the technological scale was impossible in these “peripheral” countries. The individual groups of the population have actually benefited differently from the long-term growth; the income from growth has been distributed unevenly and unfairly. What is more important, however, is the fact that not only broader middle classes were able to develop, but also that the poor groups were able to improve their income situation, albeit in some cases at a very low level. Alternative development strategies in the region have not achieved better results in this regard.

For the past two years, the boom has stuttered in some countries. There are cyclical ones Difficulties in the electronics industry as well Labor costs problems in electronics- and Clothing industry. Behind it are in the individual countries undifferently relevant Problems visible: wages and unit labor costs, the increasingly lose their competitiveness instructural bottlenecks, environmental problems, thealways more Companies respond through a Multilateralization of their Manufacturing bases, exported to Southeast Asia now also venture capital. Thailand and Malaysia and - but from a significantly higher level - Singapore are now forced to also use technology to export more sophisticated products. It lacks but currently mostly skilled workers, technicians, Engineers and managers as well as own Research capacity to apply Product innovations and improvements also in the To be able to operate land. These deficits have been recognized and we are working on solving them.

Southeast Asia has been fascinating - alongside Northeast Asia - for several decades as the most dynamic growth region in the world. The gross national product rose over three decades (1965–94) by over 7% per capita and year in Singapore, by a little more than 5% in Thailand and Indonesia and a little less than 5% in Malaysia. A similar track record can only be found for Korea, Taiwan, Hong Kong and China (5–7%) and approximately for Japan (almost 4%) as well as for the African special cases Botswana (7.5%) and Mauritius (3.9%). ) ascertain. However, not all countries in SE Asia were involved in this long-lasting boom. This applies to the Philippines and Myanmar, both actually early starters in the colonial era and (the Philippines) also afterwards (in the 50s), as well as the Indochinese states Vietnam, Laos and Cambodia. In these countries there were long dips in growth, economic blockades that set them back in relative or absolute terms. Vietnam, Cambodia, Laos and Myanmar are still among the poorest countries in the world. In the last decade, economic growth dynamics could also be developed in the backward countries, in Thailand, Malaysia and Indonesia this was increased even further at a high level, only in Singapore it flattened somewhat at a very high level.

In terms of the global economy, the relevance of Southeast Asia can be illustrated as follows: The BSP of the five ASEAN founding countries (ASEAN 5) - Thailand, Malaysia, Singapore, Indonesia, the Philippines - grew from nominally about 20.5 billion dollars (1965) $ 521 billion (1994). The proportion of World national product thus doubled from 1% to 2% - with a share (with 330 million inhabitants) of almost 6% of the world population. The GNP of ASEAN 5 is exactly the same today Canadas (with 29 million inh.) And is around one Quarter of that of Germany (82 million E.) - but it is almost twice as high as that of southern Africa the Sahara (with 572 million E.). In 1965 the GNP of ASEAN 5 was around three quarters of that of Africa.

A comparative view of the economic performance of different countries and regions is only possible if the economies recorded in national currencies are converted into the international key currency, the US dollar. However, the exchange rates used do not always correspond to the purchasing power parities that one has been trying to calculate and take into account for several years (expressed in PPP dollars). As a result, the gap between the poorer and richer countries is usually somewhat reduced. In 1994 the PPP dollar GNP p.c. in Singapore at 85% of that of the USA (1987: 60%) and thus exceeded the value for the reunified Germany (by 12%). The value of Malaysia was at least a third of the US value (1987: 24%), that of Thailand was 27% (1987: 16%), Indonesia was 11.4% (1987: 10%) and the Philippines was just under 11 % (1987: 10%).

From this point of view, Singapore belongs - as does that neighboring Hong Kong - already to the countries with high income. The political Decision makers in Thailand and Malaysia looking to 2020 with the developed Developed countries draw level with the Philippines want - somewhat ambitiously - by the year 2000 Join the Emerging Markets Club. Indonesia and Vietnam has its sights set on 2019.

It has long been considered a truism that high growth and high GNP p.c. are not necessarily to be equated with "development", that it would possibly be a question of "impoverishment growth", only of the "development of underdevelopment" and of the deepening of the "dependence" of the developing countries on the industrialized countries. It was assumed that a foreign trade growth induced by the demand and possibly active tutoring of the metropolises in the peripheries would only lead to the exploitation of raw materials, people and ecology there. This will cause a split of these peripheral economies into partially modernized world market and crypto-traditional internal sectors, i.e. the conditions for development of the peripheral regions and the poor people in the peripheries would be further restricted and worsened. These divided peripheral economies should be dependent on the world market dominated by the capitalist metropolises in the sense that they are almost completely lacking in self-control capacities and in the ability to build up or expand corresponding capacities.

Empirical indications that confirm or seem to confirm these paradigms existed and are everywhere in the Third World, not least in Southeast Asia. A breakout of this vicious circle of "dependent capitalist impoverishment growth" therefore seemed possible only through the revolutionary disempowerment of the small so-called "comprador bourgeoisies" who, as privileged bridgeheads of world capital, seemed to secure this course politically and militarily in their countries and earned quite well from it . This should enable a decoupling from the world market and a restructuring of economic processes with regard to an internally (auto-centered) and regional orientation. In Southeast Asia, after taking power in Vietnam, Cambodia and Laos, the communist parties were able to implement an economic policy that came very close to this paradigm, as did the socialist military in Burma. The Pol Pot regime in Cambodia proceeded most "consistently": This regime was responsible for one of the great tragedies of this century, which probably killed 20% of the population (2 million people).

Today we know that it is these Development paths were about dead ends that Development opportunities were wasted that many human sacrifice and suffering not the price for one better futurewere,but senselessly wasted worwho are.

The first generation of the East Asian Emerging Markets - Taiwan, South Korea, Hong Kong and Singapore- that means that Dependency paradigmrefutedandby the waytheEntdevelopment theory in the crisis fell. Strikingly, it was resource poor countries. They couldn't get into that Feeling developmental trap, which many people by "wealth" those who are blessed with natural resources - or better - obviously not to evade polluted countries able to: focus on an easy one Growth through simple valuation of fallow land or workers, on the realization of pensions in the case of exploitation of non-renewablebareRaw materialsandtheconcentrationon appropriation, distribution and Consumption of these rents without being serious Exerting yourselfefforts have been made to this to lead fragile growth to a stable level. The African countries and the oil countries of the Orient offer instructive examples of such undesirable developments. The latter type is also represented in Southeast Asia with the small sultanate of Brunei.

The populous territorial states in Southeast Asia supported their development strategy also on the exploitation and valorization of their natural resources, on the export of Petroleum / Natural Gas (Indonesia, Malaysia), from Metals, precious woods, food and agricultural raw materials. The countries of Southeast Asia were no less dependent on the changing World market development than other raw materialproviders. Unlike most African countries However, they were able to extend their range of products in the Agricultural sector to diversify significantly and thus reduced the vulnerability single monocultures. There were also new ones Tapped growth markets (such as the Cassava export as fodder from Thailand to Europe), by lowering production costs one gained access to other markets (like Malaysia and Indonesia in the cocoa market). Thailand and Malaysiawereherewellthemost successful and innovative countries, less the philippins. For Indonesia remained until the drop in prices in the mid-80s, the oil-/ Natural gas sector dominant, neverthelessde also here the agricultural sector is not so neglected and in hindered its development, such as in Venezuela and Nigeria.

In Southeast Asia, too, they initially followed the Latin American and African wrong track of a so-called.import substitutingdomestic marketoriented Industrialization for Consumer Goods (ISI), which the East Asian emerging markets (plus Singapore) had largely avoided. In addition to high protective tariffs, this industrialization strategy initially also allows high growth rates in industrial production, which, however, soon reach the limits of the overly narrow domestic market and then flatten. The domestic markets are made scarcer by these industries themselves: they are partly financed by split exchange rates, i.e. by indirect subsidies by the (agricultural) export sectors, their contribution to productive employment (and thus to mass incomes) is small due to the favored capital-intensive nature of production.The products are often inferior and expensive, since oligopoly prices can be enforced without domestic competition and product innovations and cost rationalizations can be dispensed with. The ISI determined industrialization in the Philippines in the 50s and 60s, in Thailand in the 60s, in Malaysia until the 70s and in Indonesia until the 80s. From the beginning of the 1970s in the Philippines and Thailand, a little later in Malaysia and actually only in the 1980s in Indonesia, export industrialization began with wage-intensive light industries based on low labor costs. Singapore had been following this path practically since the beginning of its industrialization. The export industries could neither develop from the ISI companies nor were they able to network with them (e.g. as buyers of intermediate goods), since the inferior and too expensive products of the ISI companies would also have impaired the competitiveness of the export factories on the world market. These were therefore set up in parallel - in the Philippines and Malaysia partly in exclusive export zones. Machines and intermediate products could hardly be obtained from the country, but had to be imported. The sale of the better products on the domestic market was administratively prevented or severely restricted in order to protect the ISI operations, which were profitable but inefficient for their operators. The actual value added in the country is therefore relatively low, the net export value is considerably below the gross export value shown in the foreign trade statistics. At the same time, this export industrialization also resulted in an impressive dynamic development in some ASEAN countries.

High economic growth over a longer period of time is only possible if efficient investments are made beforehand in promising companies. The investment rate (bemoved to the BSP) is in the Southeast Asian growth economies extremely high. While it is assumed to be only around 20% in Latin America and even lower at around 16% in Africa, it is well over 30% in Indonesia and Malaysia, around 40% in Singapore and now also Thailand. In Asia, only the Philippines (by 20%) and so far also the Indochinese states, which have experienced an investment boom in recent years (Vietnam: 1989: 11.6%, 1994: 20%; Cambodia: 1991: 9.4%, 1995: 22.4%), as well as Myanmar (approx. 13%), cannot keep up. However, not every investment promotes economic growth. Cathedrals, "white elephants", serve symbolic, but not economic purposes. Investments can be made inexpensively or overpriced in terms of price-performance ratio, e.g. in companies that are hopeless from the outset or risky companies that cannot be materialized and only leave investment ruins behind.

A simplified rule of thumb can be: The Profitability and Sustainability state and state-mediated investments may be lower than that of private companies taking Market conditionsbe taken as social, political as well as clientelistic motives the purely economic goals of the investment decisionfertilize overlay and impair can. Investments, which are financed by savings abroad, are part of their added value as interest, Dividends and profit transfers abroad again have to submit. Only if these are investments by foreign companies, which may also bring in technological skills, market overview and market control, are the inflows also offset by back transfers of the economically productive investments. This is not necessarily the case when taking out commercial and non-commercial loans ("development aid"). In Africa, the scarce investments in the modern sector are primarily financed by development aid and implemented by state and public agencies, in Latin America by their own savings and via commercial loans.

In SE Asia, the booming countries are able to create very high savings of their own and to motivate foreign companies to make direct investments. In addition, commercial and non-commercial borrowing also play a different role.

Singapore is likely (in the 90s) with a Gross savings rate of almost half of GNP one Take top place in the world, including Malaysia, Thailand and Indonesia are around 34-35% well above the values ​​of the European Industrialized countriesasLatin America(eachetwa 20%) or even Africa (about 15%). In SE Asia we only find similarly low values ​​in the Philippines (18%), extremely low values ​​in Vietnam and Myanmar (12% each) and Cambodia (perhaps 7%).

1990-95 flowed to SE Asia Annual average more than $ 14 billion Investment capital of private companies - that was nominally five times more than in the early 80s (2.9 billion Dollars) and over three times moreasinthesecondhalfthe80sYears ($ 4.4 billion). On a world scale is this amount is still relatively modest (7%) since most direct investment in developed countriesmadebecome.Underthe Developing countries, however, was SE Asia one of the most important investment regions and is going to Dynamic recently only from the People's Republic of China surpassed that of the foreignCapital investmentsfirstsince1993thethose in Outperform South Asia.

Singapore is still the most important investment country for foreign venture capital in SE Asia, but has been under heavy pressure from Malaysia since the 1990s (1990-95: 4.8 and 4.4 billion dollars p.a.). If one puts direct investment in relation to gross capital formation, the values ​​for both countries are extremely high (28.4 and 22.4%, respectively). The densely populated states of Indonesia, Thailand and, to some extent, the Philippines together account for hardly more direct investments than the city-state of Singapore. In Thailand today well over half of the manufacturing industry is controlled by foreign companies (1986: 49%), in the Philippines (1987: 41%) and Malaysia (1990: 38%) one can assume only slightly weaker shares. In terms of the fixed assets of foreign companies - after the PR China - Singapore (2nd), Indonesia (3rd), Malaysia (4th) and Thailand (10th) are among the top ten investment countries, accounting for two thirds of the total foreign fixed assets in developing countries are omitted.

Most of the foreign investment now comes from neighboring Asian countries States, from Japan, the advanced Emerging markets Hong Kong, Taiwan,South KoreaandoutSingaporeyourself. Also Company from Malaysia and Thaicountry, isolated from the Philippines and Indonesia now abroad, in the other ASEAN-and the Indochinese states as well as in China.

However, inflows of private capital are also offset by outflows of investment income. In 1990-94, for example, $ 63.7 billion was invested in the region by foreign companies and $ 115.8 billion in profits and dividends withdrawn. The own investment income (abroad) was already 59 billion dollars (and 2/3 went to Singapore). A counter-calculation of these capital flows - as is not infrequently practiced in order to document "conditions of exploitation" and "capital outflows" - is not possible because the added value and exports of the establishments established in this way are ignored.

Non-commercial loans and lost grants play some role in funding public investment in the Philippines and Indonesia, and more recently in the Indochinese states, but are now marginal in Thailand and Malaysia. While in the African countries the share of development aid in the GNP is mostly over 10%, in the Philippines it is only 1.6%, in Indonesia 1%, in Vietnam and Cambodia - with a strong upward trend - it is now 7, 5% (1995).

The Philippines, Indonesia, and also Thailand and Malaysia have also increasingly taken out commercial loans abroad. While the share of (all) foreign debts in Africa is around 79%, Latin America around 37% of GDP, this value is 37% for Malaysia, 43% for Thailand, and 57% and 60% respectively for Indonesia and the Philippines. Debt servicing is a problem again and again for the Philippines and Indonesia, which must be rectified by rescheduling (debt servicing ratio to exports in 1994: 21.9% and 32.4%, respectively). For Thailand, the debt service ratio (1994: 16.4%) can be considered normal. Malaysia was even able to repay some of its foreign debts prematurely (rate 1994: 7.9%).

The rich and super-rich are certainly the most visible winners. Old wealthy families were able to expand their wealth considerably, and many were even outstripped by newcomers out of nowhere. The large private fortunes of family clans are valued in the hundreds of millions of dollars, in individual cases in the billions of dollars. They are necessarily a small group, the real peak being a few dozen or a few hundred families in large countries. They are likely to have increased their distance to the rest of the population. Distributive justice is not just a problem for moralists. In addition, it is primarily of developmental interest how middle and lower incomes, how the middle classes and poor groups developed under the conditions of the boom. The mere absence of large private wealth or the leveling of incomes of the elites does not improve the situation of the lower and middle classes. The socialist Indochinese states have demonstrated this impressively, which is now recognized by their political leaders.

In the booming countries we can see an improvement in the situation of the middle and lower income earners. This took place through advancement through better training in qualified and better paid jobs in the secondary and tertiary sector, through the diversification of income opportunities, for example for poor and underemployed land managers, and finally through the rise in real wages also for lower wage groups. Singapore is the furthest advanced and has now reached a wage level that comes close to that in Western European countries and makes the employment of (academically trained) Europeans on the local conditions (and without foreign subsidies) appear attractive for them. The result is: The middle classes complain - and speak from a "middle class squeeze"- that they are due the StateLich more expensive and rising prices would have greater and greater difficulty in getting ainen private car and a (modern) To afford condominium. Also in Malaysia are the median incomes for European viewers has now become interesting. In both countries there is now full employment. For hard, dirty and relatively poorly paid staffactivities (in the plantation sector, in construction, in the household) there is a lack of workers and guest workers are emerging the Philippines, Indonesia, Bangladesh.

In the large states of Thailand, Indonesia and the Philippines, the situation has not yet developed that far. The group of middle income earners is narrower, their incomes are lower, unemployment and, above all, underemployment are still a problem, and the incomes of the poorer classes are generally lower than in the first two countries. The gap between these three countries also becomes clear when looking at transnational migrant work: While from the Philippines an army of millions in the diaspora work too get tried, labor migration is over Indonesia and especially Thailand (now) more likely modest. Thailand, on the other hand, is itself Host country for mostly illegal migrant workers its poorer neighbors. If we try to quantify the middle classes, the following picture emerges: If we take this group sociologically and include managers, administrators and technicians as well as employees, it comprises 48.7% of all employees in Singapore and 22.4% in Malaysia , 11.5% in the Philippines, 9.5% in Thailand and 8.8% in Indonesia.

The Philippines are a bit out of the ordinary here, as the sometimes very low incomes of these occupational groups are not taken into account here. If the bar is set very high ($ 30,000 annual income in 1992), only 0.05% of all households in the Philippines, 0.1% in Indonesia, 0.8% in Thailand, 2.1% in Malaysia and 11, 5% in Singapore on the income side of the middle class. Nevertheless, in SE Asia, too, the idea of ​​prestige is that everyone tries to own a television set and their own private car. Cars are more expensive here than in the OECD countries, in Singapore they are extremely expensive - in favor of smoothly flowing traffic and well-functioning public transport. If one ignores the special case of Singapore, one can assume that car owners and also the owners of the cheaper motorcycles will cultivate a lifestyle that cannot be limited to the satisfaction of basic needs. If one relates the ownership of private cars and motorcycles (excluding taxis and the like) to the number of employees, in Malaysia in 1994 84% (1990: 72%), in Thailand 31% (21%), in Singapore 27% (25%) ), in Indonesia 10% (1990) and in the Philippines 3.6% (2.9%) have their own vehicle.

If we look at the outcome of the boom at the foot of the social pyramid, there are significant problems. The height of the "poverty line" can be argued about, there are mostly different views, methodological calculations, different problems of data collection for each country, so that one can at best assume a limited comparability of the country data. Nonetheless, the trend seems to be clear: Poverty was in the Boom countries diminished. In Singapore since 1982 no longer reported poverty (1972: 7%). In Malaysia became the proportion of the population under the Poverty line from 49% (1970) to 19% (1989), in Indonesia from 39% (1976) to 14% (1993) pressed. The development in Thailand to be lost where the 80s were none Have brought about a reduction in poverty. In the Philippines the poverty rate fluctuated over the years of decay, the 80s, around the 50% mark, meanwhile it is said to have fallen to 41% (1994). There is no tradition of poverty statistics for the other countries in the region. In 1992 the World Bank determined a poverty rate of 46% and 51% for Laos and Vietnam, respectively. In Cambodia and Myanmar, the situation is likely to be even worse. However, the data that correctly signal a decrease in measured poverty in the territorial states should not overlook the fact that many people above this threshold are still quite poor, live in relatively insecure conditions and have to limit themselves considerably. In Indonesia and Thailand take the labor disputes in recent years Years and partly archaic formsat,therearegulatedConflict managementthrough institutionalized (autonomous) collective bargaining partners be-or is prevented. These protests, and strikes However, riots usually signal not an increasing impoverishment of the affected Workers, as in the journalistic Reporting is suggested, but finding on the basis lower, but increasing Real wages or income instead. You are done however in a difficult situation of the Upheaval and something that is becoming more and more necessary Paradigm Shift in Economic Strategy.

The boom has been stuttering since 1995/96. The clothing industry (in Thailand) and the electronics industry experienced some real slumps in 1996. The growth rate of all exports and the economy as a whole flattened out somewhat (by 2–3% compared to the high level of previous years). The willingness of foreign venture capital to invest is also declining, albeit still at a high level. The current account deficits of Thailand (1995: 8% of GDP, 1996: 7.8%) and Malaysia (1995: 8.7%, 1996: 6%) are becoming more and more serious and are now being discussed as a problem. In Singapore, on the other hand, the current account shows a surplus of 18% of GNP (1995). In Thailand they increasingly have to be financed by short-term foreign loans. In these countries there is Male cat-, in Thailand even in a mood of crisis. In Bangkok factories are being closed in isolated cases, ArLay off workers, profit margins decrease, the The stock market shrank like none in 1996other on the World (by 30%). The unstable ones in parliament Multi-party governments are not trusted Problem-solving skills too.

There is also political uncertainty in Indonesia ascertain. The question of succession to the aging (authoritarian) heads of state is not up to date, nevertheless exist. Try opposition forces to position yourself and deliver yourself bloody Street battles with the police. Riots are also increasingly directed again against the Chinese minority, the eireal Top performers in the country who are their position in a possibly restless transition phase and post-Suharto time can no longer be entirely certain.

Political decision-makers are also aware that they are dealing not only with economic downturns and temporary signs of overheating, but also with structural problems. Some critics point out that in Southeast Asia, too, growth has so far been achieved largely through the valorisation of cheap local production factors (land, raw materials, labor) and their efficient combination, but not through technological innovations. The expansion of the material infrastructure and human resources did not keep pace with the boom, on the contrary, it is becoming less and less fair and thus effectively becoming more and more expensive. Industrial growth on the basis of cheap wages and low wage costs is increasingly reaching its limits in Thailand and Malaysia and has not been possible for a long time due to the high wage level in Singapore, as wages have also risen partly above productivity gains and in China, Vietnam , in the future perhaps Myanmar as well, there will be even cheaper competitors.

The environmental costs have so far been largely neglected or ignored; this policy will hardly be sustainable in the future. All of this means that huge investments have to be made in infrastructure and the environment, that export production has to be converted from wage-intensive simple products to higher-quality, more sophisticated products, that technologies not only have to be imported and adapted, but also creatively further or newly developed . Southeast Asia will have to employ fewer and fewer semi-skilled workers, more skilled workers, technicians and engineers as well as researchers and product developers in its factories if it does not want to be pushed out of the market by the low-wage countries that are moving up without being able to challenge the emerging economies ahead.

However, the problems are different in the region: Theadvanced singapore has long been with its excellent infrastructure not just an industrial location, but a service- and communication center for the entire region. It has high foreign exchange reserves and already considerable foreign investments of our own andalsoonehighLevel of trainingbenerpopulationasacapable of acting governmentofTechnocrats.Thailandwill the biggest problems in the region have one maintain a high growth rate. Here are to call: the infrastructure problems of the Mega metropolis Bangkok, the restriction of the further expansion of the big city and the Development of the hinterland and finally the Conversion of industries from "low tech" to "high tech "under the conditions of one still poorly educated population.

Malaysia is perhaps between the two countries, while the rest of the countries in the region lag behind with the still familiar problems and Are growth potentials.

If we look at the qualifications of the workforce in order to clarify the differences between the individual countries, the following picture emerges: In Indonesia around 2% of the workforce have had tertiary education (university, college), in Thailand around 5%, in Malaysia 10% and in Singapore more than 15%. However, this is only the formal-quantitative side. A 1996 survey by the Singapore Ministry of Education found that graduates had good analytical skills but were not creative and innovative, unable to deal with problems that were not well defined. You now want to get through this creativity "Thinking Skills Program" strive. The exciting question, however, would be whether these "competent but not creative students and academics" are a product of the specific form of teaching, learning and examinations practiced (which could in principle be reformed in the short term), here their (centuries-old) culture (" Confucianism ") shimmers through (which could possibly have to be dismantled in the long term) or the current political conditions of the semi-authoritarian state, in which an articulation of interests is possible but is discouraged by (mostly economic) sanctions, not only the political but also the general academic one Self-employment affects (which one could change, but probably does not want to).

Malaysia is expected to deteriorateofLevelstheacademic training. Here one can clearly see political causes localize: To the economically backward Malays to the economically dominant Chinese that led by the Malays has to introduce multi-ethnic government including BahasaMalaysia as mandatory teaching- and Official language prevailed and seeks the Malays preferential access to the Universities (and later to the public service) too procure. Therehowever, one does not discriminate with only the ChineseandIn thein theLandratheralso the previously widespread former colonial- and The official language is English, today's global business- and science language. The Chinese nonetheless found a way to pursue their academic careers after they were denied access to the country's public universities. The wealthy sent their sons and daughters to (English-speaking) abroad, the slightly less wealthy first to private universities in the country and only then, in the exam phase, to (expensive) abroad. The Malay students at the Malay universities are also faced with problems. There is hardly any scientific literature in the language they speak - most of it appears in English. The result is that many Malay students learn only from their lecture notes and prepare for their exams and also write their theses practically without reading the specialist literature. Thanks to their better language (English) and general academic knowledge, the Chinese academics can now expand their competitive advantage over their Malay competitors on the private internationalized job market.

In 1995 the government was therefore forced to English as the language of instruction is again limited to introduce, in addition, the private Universities in the country examination rights get, and the state universities are said to be Corporations run more efficiently and to the Private sector connected and commercialized become.

Before these measures can take effect, however, in Malaysia, as in Singapore and Thailand, there is an acute shortage of demand for qualified engineers and managers, for which there is fierce competition among companies, a comparative investment report speaks of one "Grim headhunting". For the decade 1990–2000, engineers in Malaysia alone have forecast a need of 153,000 new jobs (as of 1990: 99,000), compared to a potential of only 125,000 educated children from the country. In order to accelerate market access for university graduates in all subjects, the Minister of Education shortened the basic course from four to three years without further ado in August 1996. Nevertheless, one cannot avoid having to recruit qualified academics abroad. Singapore seems too on this questionat themost determinedproceed.Theregation searches all over the world by ad and through the Posting of recruitment missions (1995: seven in the US, UK, India and Australia) To attract interested parties for vacancies and offers them citizenship if necessary at. Research personnel are also being sought-and development departments (R + D), an area in to that of Singapore and its neighboring countries has hurried ahead, but continues to do so in all countries- or needs to be built. Singapore turns in 1991 After all, 1% of GDP was spent on R&D in 1995 it should be 2%, which is about the level of the other emerging countries (e.g. Koreas) and thus also in the Range of relative Research expenditure in the old industrialized countries moves. Malaysia is trying to follow Singapore and is aiming for a ratio of 2% of GDP for R&D in 2000 (1990: 0.8%), while Thailand and the other countries in the region are still well behind. The continuation of the economic boom in Singapore, Malaysia and Thailand depends not only on spending more on training their workforce and on research, but on improving workforce skills and applied research. So far, in Malaysia and Thailand, government and university institutions have spent most of their money on R&D (85% and 93% of total funds, respectively). It is necessary to expand (possibly state-funded) private research, the practical relevance of which is presumably to be rated higher than that of public research. In Singapore as in other advanced emerging economies (such as South Korea) is already more in the private sector Company spent on research as im public sector (approx. 60%). That is maybe also an indicator of the maturity of this Economies. Thaicountry and Malaysia still have to follow this development.

TheSoutheast Asian growth economies so currently in a not onefold Upheaval phase. Although the to be dealt with Problems are difficult and obvious is one too great pessimism or malice with regard to their future growth- and Development course not appropriate.

© Friedrich Ebert Foundation | technical support | net edition fes-library | March 1998