1998: Economic Growth of East Asia—Will It Last in the 21st Century?

The timely theme is discussed in terms of growth potential, financial sectors and regional cooperation.

Kiyoshi ABE (Chiba University) analyzes the cause of the East Asian Crisis triggered by the Thai Baht devaluation in July 1997, and refers to six structural problems common to Southeast and East Asia: high-exchange economy, weak inter-industry linkage, institutional mismatch, global standard, weak intra-Asia cooperation and lacking self-help. A revival of the East Asian Miracle will remain very difficult. Its total factor productivity will remain low in the near future.

Sahoko KAJI (Keio University) argues that capital-account liberalization and financial globalization enforce structural convergence. Global standard emerges in a system where people from different nations mingle and do business without risking financial ruin. One of the unintended consequences of capital-account liberalization is the structural convergence to the global standard. Resisting the structural change with financial sectors widely open is not only fruitless but also detrimental.

Fumio YOSHINO(Takushoku University)points out that the past high growth of Southeast Asia has been due to the MNC supply network as well as Chinese network, rather than a success of the ASEAN. Weak is the contribution of the ASEAN to the economic growth. Southeast Asian economies depend so much on the MNCs and the Chinese power. The self-help power is still so weak. The role of Japan is crucially important.

There were three papers on Japan-Korea Relations presented by Chuk Kyo Kim (Hanyang U.) & Jong Wook Won(Institute for Health & Social Affairs), Dong Cheon Shin & Young-Sun Lee(both Yonsei University), and Yong Jin Kim (Dongduk Women’s Univ.) & Jong-Wha Lee(Korea University).

A special lecture was also held on East Asian Crisis (Some Limits to Liberalization of Global Markets), with Lawrence R. Klein, University of Pennsylvania as Main Speaker.