THE END OF THE WESTERN WORLD TIGER ECONOMY DEVELOPMENT IN THE FAR EAST
Asian market, including the Peoples Republic of China (PRC) is
the worlds largest market. For that reason, it is predicted that Asia
will be home to the worlds first trillionaire.
· Many Asians predict, with some bias, that they will increasingly play a more influential part in global economic, cultural, political and diplomatic roles in future decades.
· The Far Eastern financial crisis has had, understandably, a negative impact on the growth and expansion of the region.
The first Asian tiger whose take off was driven by foreign multinationals through foreign direct investment (FDI)
· This was brought about by active encouragement from the government. Created tax free free trade zones, which were linked to specific terms.
· Transnationals could expect tax relief, an adequate supply of docile, skilled workers, and investment incentivisation. However, they were bound to set up a joint venture system with an existing Malaysian firm. In this way, not all of the profits were expatriated, and the Malays gained experience, knowledge and tools. Initially, the Japanese TNCs e.g. Hitachi, were the first to utilise this offer.
· The Malaysian population is distinct and has several defining characteristics;
· They are fully aware of the vision set out for their country, and are committed to helping to achieve it.
· They have distinct cultural mores and ways, which aid their work enormously.
· They are ethnically diverse, it is estimated that 60% of the population are Malay, 30% Chinese, and 10% Indian.
· There exists a positive discrimination on behalf of indigenous Malays. In 1969, the Malay population rioted against the business like Chinese. The Government introduced a social reconstruction programme which positively discriminates racially and ethnically on behalf of the Malays in education and employment.
· It has been acknowledged that while this may not be fair under our own standards, then it has at least had a significant effect on the population and economic activity. The Malaysian economy returns an annual 8% growth rate, more than 4 times that of the UK.
· Another key factor in their success is the plentiful supply of cheap unskilled labour. The Malay states have a large number of peasant workers, who are keen to work in the cities.
· However, in recent years, the Malay population has been insufficient. The government relies on cheap labour from overseas; 1 in 7 labourers is immigrant. Usually, workers are draw from Indonesia or Bangladesh, because;
· They are close by.
· They have a low expectation of wages, and therefore are relatively cheap.
· They share a religion, and cultural system, and therefore assimilate well in to Malay culture.
· They are expendable. During the financial crisis, the immigrant workers were repatriated by the Malay government, in order to protect their own workers.
· The Asian labour market is vast. It will take some time to fully engage the labour supply of the region, especially the PRC.
· The Malaysian economy has another distinct advantage; that of stability. Since independence, the Malay Parliament has been ruled by only one political party. Party politics are ruthless at best. The political leadership is strong, and direct. Opposition is not tolerated. Politicians remain linked with the feudalist and inherently respectful society, and are expected to provide economic and moral leadership.
Taiwan - The Republic Of China (ROC)
· Was the first tiger, beginning in the 1950s. Like Malaysia, the government had a direct influence.
· Has returned the strongest growth rate in the world for the last 10 years, averaging around 10% p.a.
· Democratic procedures in the region are somewhat curious. The first presidential elections were held in the mid 1990s.
· Like Malaysia, similar expectations of political leaders are found. Far more respect than in the West is shown to the leaders, who retain a father like status amongst the ordinary people. This identification between the people and the state is modelled on the family structure, which dominates Far Eastern culture.