Miracle of Just Hard Work - Four Opinions on Neck-Breaking Asian Growth

United Nations ESCAP
HRD Section

Miracle! or Just Hard Work

Four Opinions on Neck-Breaking Asian Growth

FROM ESCAP HRD NEWSLETTER NO 7

The economic success of the tigers and tiger cubs of East and Southeast Asia continues to be a hot topic for debate. Whereas some claim that the growth is a result of human resources development and strong business determination, others argue that the success can be mainly attributed to the use of high savings for large investments in the region. We asked some experts their views on the matter. What are the main reasons for the high economic growth rates in East and South-East Asia? Has investment in human resources, such as health and education, contributed significantly to the high growth? Has the growth been mainly a result of foreign investment? Can the rapid growth of these countries be sustained and expanded to other countries? Here are some experts' views.

Manabu Fujimura, Visiting Researcher, East-West Center, Hawaii:

"It was a formation of 'national will' to catch up with the West, and the collective willingness to save and invest for tomorrow, that resulted in the spectacular growth in the region. Such 'will' stemmed from the historical and social settings of each society more than anything else. Also important were outward-looking economic policies, technology transfer through trade and investment, merit-based social mobility, and competent bureaucracies. Investment in human resources has contributed to the extent that basic health and education equipped people with sound decision-making capabilities. But in the long run, in an increasingly borderless world, people's welfare will depend more on individuals' and firms' own investment decisions, rather than on national policy."

A.B.M.M. Azizul Islam, Director of the Development Research and Policy Analysis Division, ESCAP:

"It is impossible to pin down one single reason for the high growth rates in East and Southeast Asia. The explanation lies in a combination of factors such as high levels of investment, macro-economic stability, openness to foreign trade, investment and technology, and political flexibility. Human resources development has been indispensable.

A high level of investment has been an important, but not the only factor explaining fast growth. Quantitatively speaking, domestic investment has been a lot more significant, but foreign investment has been an important catalyst for export competitiveness and technological standards. Fast growth can be replicated in other countries of the region; the basic policy elements are replicable. But success would depend heavily on political commitment to and administrative competence in implementing them."

Lorraine Corner, Regional Programme Adviser of the United Nations Development Fund for Women (UNIFEM), and former Research Fellow at the Australian National University:

"Investments in education have been especially important, and have typically gone together with high levels of investment in health. In both, the role of women was crucial. Despite the fact that levels of health and education were initially very low among women in several of the East Asian countries (and is still comparatively low in some), young women experienced rapid improvements in both areas. This facilitated the expansion of education and health for society as a whole and thus contributed to the quality of the labour force.

High growth and investment in the region would not have been forthcoming had the "human setting" been unfavourable. In some countries, foreign investment created some of the initial HRD. The Indonesian experience shows that a strong government can also initiate HRD through public sector investment. This will then attract private and international investment.

Sustainability of high growth depends largely on how 'high growth countries' treat their human resources, particularly in political terms. The educated and resourceful populations required for economic success are likely to demand a share in political decision-making and a 'fair share' of the cake that they have helped to create. It will also depend on whether and how these countries are able to incorporate and integrate excluded groups such as the poor, ethnic minorities and women. The expansion of growth to other countries in the region will depend very much on their capacity to generate HRD and good governance."

Lim Teck Ghee, Regional Adviser on Poverty Alleviation and Social Integration, ESCAP:

"Apart from the economic policies, I would add underpinning social investments in health, population and education, as well as the remarkable progress in involving women in gainful employment in the manufac-turing sector, as crucial factors for success. The latter, in particular, has generated considerable economic and social benefits that have yet to be fully understood or appreciated.

One must be careful not to single out investments as the main factor for growth. Economic development is a highly complex process involving changes in many spheres, including economic, social, cultural and political. There have been considerable advances in health and education in some countries of South Asia with relatively little impact on growth rates.

The sustainability issue - not just economic, but also social, cultural and environmental - is very important. To me, it is not a question of whether the rapid growth can be sustained but whether it should be sustained at the present high levels and at what costs. Rapid growth carries costs which require deeper analysis and appropriate remedial measures, even to the extent of slowing it down to enable the other spheres of life to adjust. As for expanding rapid growth to other countries, I would be cautious about exporting the many negative aspects of rapid growth to our neighbours."

SUBSCRIPTIONS FOR THE ESCAP HRD NEWSLETTER