Transcript #3
I just want to move on to the next speaker, Mr. Chakramon Phasukavanich from Thailand. I invited him not just because he represents a country which has achieved very great economic growth through trade and cross-border, longer-term investments in the East Asia region, but also I have known him personally for about seven or eight years when Mr. Chakramon was a senior official of the investment board. I was responsible for the consumer electronics industry in the government of Japan, and we were sitting together to talk about how to develop the trade and investment link in the consumer electronics sector in the ASEAN region. That was the first joint project between us, so I respect his leadership, and now he is the Secretary-General of the National Economic and Social Appointment Board of the Kingdom of Thailand. I am very much looking forward to his remarks from a developing country's perspective. Mr. Chakramon, the floor is yours.
Mr. Chakramon Phasukavanich: Thank you, Mr. Sumi. Well, first of all, let me congratulate Mr. Ohno for his excellent paper and clear and concise presentation. I think it conceptualizes and provides insight into the East-Asia experience during the last couple of decades. I myself have found his paper very interesting and very enlightening, and I would like to highlight some of his key messages, upon which I would like to make comments.
The first message: development in East Asia is unique. An appropriate development strategy in East Asia may not be the same as in the West and may not totally apply to other less developed countries. Agreed. Even among East Asia or South-East Asia themselves, we are quite different in various aspects and there is no way to replicate the East Asia experience to any single country.
Message number two: it is important to look at the region as a whole rather than focusing on an individual country due to the dynamic production network embedded in East Asia. Comment: I think economic integration in East Asia has taken place in its natural course rather than by design, maybe due to the close proximity or similar social wills which have reinforced the integration among East-Asian countries.
Message number three: a stable political regime and political integrity are relevant to achieve high growth. Comment: I think that history has already confirmed the significance of stability. However, it should be kept in mind that stability alone cannot lead to sustainable growth. Since there are so many factors involved, there might be some trade-off between, say, a strong political regime and full democracy, perhaps.
Message number four: a supply of international public goods may be the way to get out of the mess. Frankly speaking, the meaning of supply of international public goods in the paper is not clear to me; it seems hanging to me as well. However, if we adopt the meaning as defined by Professor Ohno, I think that under the umbrella of ASEAN+3, the Chiang Mai Initiative, which is arranged by ADB, Asia Cooperation Dialogue (ACD), resource pooling or international reserve pooling, soft arrangement, and the fund cycling are likely to be conceivable international public goods in the future.
Message number five: economic growth and macro-economic stability are conducive to reducing poverty. I more than agree to this because in the case of Thailand, since after the crisis in 1997, the number of poor increased from 6.8 million to almost 10 million people in 1998, just two years apart. And when the economy turned around later in 1999 and 2000, the number of poor had dropped to only 8.2 million in 2001.
Another message: growth and stability in East Asia have been largely supported by international trade, investment, and regional cooperation led by Japanese forces. In principle I agree, but how much the Japanese forces have influence upon the growth and integration of East Asia-I doubt it. They need to be examined before we can make such concrete conclusions.
Seventh message: the role of the government. There are three roles identified by Professor Ohno. One, creating a market economy; two, promoting trade and investment integration; and three, reducing negative impact of growth, for instance income cap, environmental problems, etc. Comment: the government, I think, should keep in mind a level playing field when creating a market economy. I think country competitiveness is perhaps the key factor to long-term growth. Sometimes we walk a very delicate or thin line between a liberalized economy and what we call a government-intervened economy-this is a very delicate line. I also agree with Professor Ohno that the government should promote trade and investment integration, but the degree and sequence of trade and investment liberalization need to be carefully deliberated and in good timing. I also agree that the mobilized approach, which I call dual track, should be a good solution, and I will touch on this subject matter later on.
Message number eight: poverty reduction should be blended in government policy rather than specifically pursued as the only objective. Such a notion, I think, is very consistent with the way several countries in East Asia have formulated their development policy, and may I add at this point that growth with equity and growth with stability should be the first and foremost objectives of development.
Message number nine: Japanese policy in long-term assistance should aim to help tailor the most appropriate growth strategy for selected countries. Second, selectivity criteria will be revised if resources are extended to other regions. Third, unlike other regions, East Asia has a well-established network of Japanese investment. Agreed. But, talk however must be done at the initial stage so that the donor can understand the nature and characteristic of the recipient, so that the most appropriate strategy can be designed to match recipient needs and that the right attitude between the two parties can be put in place. I remember 40 years ago when King Bhumibol of Thailand visited the United States, 40 years ago nobody in the United States knew Thailand-40 years ago. The media, one pressman, asked the king, "Your majesty, you come to the United States to ask for something?" The young king replied, "Yes, we ask for your understanding." That set the right tone for successful cooperation at a later stage.
Message number ten: this is my own comment that I would like to add. First, I think it is very important that strengthening the government agency in policy implementation should be emphasized, because a strong government agency can be an extra driving force to boost the economy further. I think we are approaching the dawn of a knowledge-based economy which is driven by information technology, and the question is how can less developed countries handle this without having adverse affects on people in the traditional sector - digital divide.
Well, in the case of Thailand, insofar as the Thai economy is concerned, I think that at the moment the Thai government is currently implementing what we call the dual-track economy policy, emphasizing not only international trade and investment but also boosting the local or domestic economy as well. We realize the importance of international trade and investment as what we call a locomotive or an engine of growth, but we need some extra engine or to energize the existing or local engine so that it can provide an extra impetus to move the economy.
In conclusion, I would like to say that East Asia is growing strong, from strength to strength, from year to year. This is not only because of integration or cooperation but I think because of what I term-I think some professors at Harvard have already termed it-what we call "co-opetitive" or "co-opetition." This is a combination of cooperation and competition, and this would lead to competitiveness in the future. Thank you very much.
Mr. Sumi: Thank you very much, Mr. Chakramon, for your excellent remarks. I believe that Professor Ohno may want to respond to some of the remarks that Mr. Chakramon made but I would like to postpone that until all the speakers complete their remarks. I just learned a very new concept called co-opetition - that is, the combination of cooperation and competition, those are very important key words in energizing the economy.
