Think Tank Chairman Discusses East Asian MiracleBy Naveen Sunkavally
On Friday, Noordin Sopiee, chairman and chief executive officer of Malaysia's leading think tank, the Institute for Strategic and International Science, spoke about the myths and realities associated with the "East Asian miracle." The Malaysian Students Association sponsored the event, held in 10-250.
The East Asian miracle refers to the persistently high growth rates and standards of living among East Asian economies in the last 30 years.
Sopiee began his speech by analyzing the word "miracle." He felt the word contained bad connotations because it implied something "magical, mysterious, and easily done." However, Sopiee also pointed to the good connotations of "miracle," as something "remarkable or astonishing."
Sopiee then discussed 10 common myths associated with the East Asian miracle. He attacked people who gave single-causal explanations, such as an authoritarian government or a Confucian work-ethic, for the miracle and those people who think that every East Asian country has followed a general East Asian economic recipe for success.
Sopiee also argued that the East Asian miracle was not easily accomplished and said, "You young people don't know the hell we went through to go toward today's hell."
Sopiee discusses currency crisis
The last myth, or "pre-myth," that Sopiee addressed was the notion that the current currency crisis represents the beginning of the end for East Asian countries.
Sopiee tried to debunk this "pre-myth" by noting the incredible strength of East Asian economies before July 2, when Thailand set off the currency crisis by devaluing the bhat.
Malaysia, which has thus far suffered a 30 percent devaluation in the ringgit, would "suffer the consequences but somehow get up and become as competitive as before" after one to four years, Sopiee said.
Before the crisis, Malaysia was the second strongest and fourth most industrial economy in the world, Sopiee said. The Malaysian economy had all the fundamentals, like low inflation and high growth. Singapore, with an average growth rate of 7.92 percent, has been the most successful economy in the world in the last 25 years, he said.
"Never before have so many countries grown so fast," Sopiee said of the East Asian economies. In 1947, the situation for East Asian countries was hopeless, and Japan had only 60 percent of the output of India and Pakistan, he said.
According to an Australian forecast, the East Asian sector would achieve parity by 2000 in terms of the volume of trade with the rest of the world, Sopiee said. He showed graphs that placed the East Asian economic block far ahead of the North American Free Trade Agreement block and the European Union.
Sopiee also said that the "electronic herd" of speculators could not ignore the strength and potential of East Asian countries, and that despite the currency crisis, the herd will later turn back to invest in East Asia. Last year, investors made an average return of 25.9 percent in Malaysia, while the average worldwide rate of return was only 12 percent.
Change in ideology is true miracle
Despite the bad connotations of the word "miracle," Sopiee thought that its good connotations described well the current situation with East Asian countries.
He said that the change in ideology was remarkable. "[Before] we [Malaysia] were prepared to kill people if they were communist. [Now] for the first time in 150 years, nobody is shooting anyone anymore."He said that the most turbulent region in the past is not the Middle East but East Asia, which has experienced the Korean War, the Vietnam War, and countless other civil wars.
"I think we have made a tremendous advance with regards to democratization," Sopiee said. "However," he said, "I believe we have to do better with regards to political and civil rights."
Speaking of the psychological and cultural change over the last 50 years, Sopiee said that East Asian countries now have a greater sense of confidence and a regional consciousness and no longer feel inferior to Western nations.
Pointing to a survey that asked East Asians and Americans their most important values, Sopiee said that East Asian values have also contributed to the miracle. According to the survey, in East Asia, the most important values were the existence of an orderly society, consensus, and respect for authority, while in the United States, the most important values were free expression, personal freedom, and open debate.
Sopiee answers questions
When asked about Malaysian Prime Minister Mahathir Mohamad's recent comments about a conspiracy among Jews and rich nations, Sopiee said the prime minister was making a point to the media. He also said that it was not possible for rich nations to conspire.