#5 Structural changes and industrilisation in Asia

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Bagian 5 tutorial mata kuliah EAE II merupakan salah satu bagian yang menarik yang menjelaskan tentang perubahan struktur ekonomi yang dialami oleh negara-negara asia, seperti: ASEAN, China dan Jepang. Kebijakan industri di berbagai negara di Asia memiliki arti penting, khususnya dalam perubahan struktural yang terjadi di negara-negara tersebut.

Sebelum melangkah jauh, tentu kita perlu memahami secara basic apa yang dimaksud dengan structural transformation, kebijakan industri etc?

so, pertanyaan yang mendasar untuk materi ini adalah:

[Definition]

[Rationales – kenapa mereka ingin melakukan transformasi struktural?]

[Objectives]

[Contoh Kebijakan]

Structural transformation by definition: Large scale transfer of resources from some sectors to others in a system, necessitated by fundamental changes in its policies or objectives.

Read more: http://www.businessdictionary.com/definition/structural-transformation.html#ixzz24hhqpZs9

More understanding about structural transformation from Kuznets http://www.nobelprize.org/nobel_prizes/economics/laureates/1971/kuznets-lecture.html

Six characteristics of modern economic growth have emerged in the analysis based on conventional measures of national product and its components, population, labor force, and the like. First and most obvious are the high rates of growth of per capita product and of population in the developed countries – both large multiples of the previous rates observable in these countries and of those in the rest of the world, at least until the recent decade or two.3 Second, the rate of rise in productivity, i.e. of output per unit of all inputs, is high, even when we include among inputs other factors in addition to labor, the major productive factor – and here too the rate is a large multiple of the rate in the past.4 Third, the rate of structural transformation of the economy is high. Major aspects of structural change include the shift away from agriculture to non-agricultural pursuits and, recently, away from industry to services; a change in the scale of productive units, and a related shift from personal enterprise to impersonal organization of economic firms, with a corresponding change in the occupational status of labor.5 Shifts in several others aspects of economic structure could be added (in the structure of consumption, in the relative shares of domestic and foreign supplies, etc.). Fourth, the closely related and extremely important structures of society and its ideology have also changed rapidly. Urbanization and secularization come easily to mind as components of what sociologists term the process of modernization. Fifth, the economically developed countries, by means of the increased power of technology, particularly in transport and communication (both peaceful and warlike), have the propensity to reach out to the rest of the world – thus making for one world in the sense in which this was not true in any pre-modern epoch.6 Sixth, the spread of modern economic growth, despite its worldwide partial effects, is limited in that the economic performance in countries accounting for three-quarters of world population still falls far short of the minimum levels feasible with the potential of modern technology.7

The Industrial Policy plan of a country, sometimes shortened IP, is its official strategic effort to encourage the development and growth of the manufacturing sector of the economy.[1][2] A country’s infrastructure (transportation, telecommunications and energy industry) is a major part of the manufacturing sector that usually has a key role in the IP. The IP purports to “stimulate specific activities and promote structural change”.[3]

Industrial policies are sector specific, unlike broader macroeconomic policies. They are sometimes labeled as interventionist as opposed to laissez-faire economics. Examples of horizontal, economywide policies are tightening credit or taxing capital gain, while examples of vertical, sector-specific policies comprise protecting textiles from foreign imports or subsidizing export industries. Free market advocates consider industrial policies as interventionist measures typical of mixed economy countries.

Many types of industrial policies contain common elements with other types of interventionist practices such as trade policy and fiscal policy. An example of a typical industrial policy is import-substitution-industrialization (ISI), where trade barriers are temporarily imposed on some key sectors, such as manufacturing.[4] By selectively protecting certain industries, these industries are given time to learn (learning by doing) and upgrade. Once competitive enough, these restrictions are lifted to expose the selected industries to the international market.[5]

Baca selanjutnya di http://en.wikipedia.org/wiki/Industrial_policy)

Industrial policy in Asia

www.ide.go.jp/English/Publish/Download/Dp/pdf/128.pdf

Can we classify typical patterns of industrialization policies for economic growth in East Asia? Komiya, Okuno and Suzumura (1988) found that industrial policies helped Japanese companies become competitive with multinational corporations by cushioning the dynamic inefficiencies of Japanese markets through the protection of infant industries.

From Flying Geese to Leading Dragons

http://www.google.com.au/url?sa=t&rct=j&q=&esrc=s&source=web&cd=5&ved=0CD0QFjAE&url=http%3A%2F%2Fsiteresources.worldbank.org%2FINTMOZAMBIQUE%2FResources%2FWIDER_Lecture-Justin_Lin-05-03-11.pdf&ei=ZWs5UJGXCeyWiQf464HoCQ&usg=AFQjCNGThNvlAHnQ2eqvDaTWdW1s6o4g5Q

Flying Geese Pattern to explain Asia’s strcutural changes

The “flying geese” model is an industrialization process framed on “growth – clustering”

Growth-clustering is a phenomenon in which a leading economy (lead goose) propagate growth stimuli to the following economies (following geese)

The stimuli include dissemination of technology, knowledge, information skills, demand, and transplantation of growth-inducing institutional arrangement.

The “flying geese” was used to describe the catching-up industrialization process in East Asia

The model has three aspects

Intra-industry aspect: product development within a particular developing country shifting from import to export

Import à production à export of consumer goods

Inter-industry aspect: sequential appearance of industries from consumer goods to capital goods

Production of textile à electronics à semi conductor

International aspect: subsequent relocation of industries from advanced to developing countries during the latter’s catching-up process

Production of textile in Japan à NIE àSEA à China

Lead goose : USA

1st tier: Japan

2nd: Korea, Taiwan, Hong Kong, Singapore

3rd: Philippines, Thailand, Malaysia, Indonesia

4th: Vietnam, China, India

The industrial policy in East Asia

The Japanese model

The Asian model

The Chinese model

Japanese Model

Rely on domestic investment à selected key industries were given preferential treatment (eg. tax deductions and exemptions), support for the keiretsu system

Push domestic firm to be competitive with foreign MNCs.

ISI early in the stage, moved toward export oriented product

Collaboration between government & business. The state uses national resources to build infrastructure to underpin rapid industrialisation.

ROK adopt similar model

Asian Model

Promotion of international competitiveness through FDI

Centered on establishing Export-Processing Zones (EPZs) to attract FDI.

Within the EPZ, firms receive preferential treatment

Liberal policy toward FDI, allow 100% foreign for export oriented business.

Chinese Model

Similar to the Japanese model, except in its use of FDI.

To foster domestic companies –“pillar industries”— by guiding industrial policy and forming alliances between domestic companies and foreign MNCs.

The most typical case: China’s automotive industry, where the government selected eight domestic firms, gave them preferential treatment and permitted each company to make alliances with up to two foreign companies, such as GM, Ford or Citroen.

(Disummary dr kuliah Dr Achmad Shauki & Dr Risti Permani)

Dias Satria
Dias Satria
Dias Satria, Research field :Economic development, international trade, Banking and small/medium enterprise Email. dias.satria@gmail.com Mobile Phone. +62 81 333 828 319 Office Phone. +62 341 551 396

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