The Four Tigers (1988)

From the July 1988 issue of the Socialist Standard

  A weary Asia out of sight  

Is tugging gently at the night  

Uncovering a restless race; 

Clocks shoo the childhood from its face.

W.H. Auden

A trade union demonstration in Singapore is a rare sight; one protesting a decision of the United States Congress is unheard of. That it was permitted is a measure of the government's concern at Singapore's inclusion with South Korea, Taiwan and Hong Kong as one of the Four Tigers allegedly threatening the economic life of the US. and therefore scheduled to have its GSP privileges withdrawn on 1 January, 1989. The Generalised System of Preferences allows free or low-tariff imports of certain goods into the US; Japan and the EEC have similar schemes. Its purpose is. ostensibly, to encourage the trade and economic development of Low-Developing Countries. But trade is at least a two-way business, and developed countries are involved as much for the purpose of their economic health.

Growing up in capitalism is a painful affair, as any worker knows. Having successfully responded to the urging of their US mentors to modernise and achieve newly industrialised country status, these LDCs are reaching out for some of Uncle Sam's bourbon and cigars and have been told that they will be "graduated" from their trade privileges as a consequence.

The present trade deficit of the US. and its changed role from creditor to the world's heaviest debtor nation, is something that capitalism's supporters would have found difficulty envisaging ten years ago. Some blame Reaganomics, but this cannot explain how the exceptional economic superiority of the US after the Second World War appears to be progressively deferring to the rapid growth of Europe and Japan. Although persistent trade imbalances can be reversed and do not indicate the permanent demise of a country's economic strength, it does seem that the automatic assumption of US economic hegemony is being challenged by the development of capitalism itself in the shape, in this instance, of the Newly Industrialised Countries.

Asian NICs
These countries have all experienced colonial status and their development in the last decade has been outstanding. The UN Economic and Social Commissioner for Asia and the Pacific states that the Four Tigers achieved a remarkable 11.7 per cent growth in real GDP in 1987. Even the growth at 5.7 per cent of another Asian ex-colonial LDC, the Philippines, exceeded that of the most developed countries. And despite the continued general slowdown in world economic growth projected by the IMF at 2.9 per cent this year, the Tigers' expansion rate, in keeping with ESCAP's regional projection of 5.6 per cent, is expected to continue well above those of developed countries.

The scheduled withdrawal of GSP privileges is an example of increasing US protectionism which highlights the international nature both of markets and investment capital. The Singapore American Business Council's call on its government in Washington to reconsider withdrawal, argued that cheap imports of Singapore products into the US — in particular from their own factories in Singapore — help lower costs in US-finished products, increasing US competitiveness. In a demonstration of their capitalist maturity, the NICs took immediate steps after the announcement to support their separate economies. Trade delegations between the Tigers followed, as well as between them and areas such as India, Pakistan and East and West Europe. And Taiwan and South Korea, with a competitive eye on China's cheap and abundant raw materials, agreed to reverse their previous trade policy with her and to open their markets.

The role of the Tigers' exports in the US trade deficit is an indication that capitalism can still develop increasing productivity and output, and that industrialisation still results from investment in low-wage areas. US, Japanese and EEC capital have played the major part in this.

But the Four Tigers represent only part of the picture of Third World development in East Asia. Thailand, better known for export of rice and rubber, now exports Japanese cars, its manufactured products swelling from two per cent to 60 per cent of exports in 25 years. With the highest growth rate in the ASEAN group of six countries, and an IMF forecast of a seven per cent annual growth until 1991, she is expected to become the next NIC. Like the Tigers two decades earlier, Thailand has a flourishing labour-intensive textile industry with low wages — about US$3 daily. The increasing use of machine-intensive industry, staffed round the clock by an adaptable, young labour force, could well follow their pattern by keeping labour costs low and the economy competitive. At one-third of the cost, industrial productivity almost equals that of South Korea. Already a magnet for US and Japanese capital, investments now flood in from the economies of the Tigers and the EEC. to share in the fruits of exploitation.

Malaysia, another ex-colony attracting foreign investment, has urged Singapore and Taiwan, already the second and third largest investors in the country behind Japan, to avoid GSP restrictions by relocating their industries there, stating its aim as wanting to form an "economic power to replace the weakening US and EC markets". Its manufacturing sector's growth of 12 per cent, and its 69 per cent growth in trade surplus in 1987, reflect the surprising fact that Malaysia is now a significant producer of electronic and electrical goods, and that machinery and transport equipment head both its import and export lists.

Keeping a watchful and wary eye on these developments — and on her trade surplus with the NICs — Japan is in the forefront of OECD moves to include them in a new Pacific OECD. However, they already account for 25 per cent of the US deficit, and as they turn to the EEC to avoid US protectionism, the European trade situation could worsen. Expected by OECD to surge past Japan's surplus, and to double that of the EC and EFTA combined in 1989, it is not surprising that their inclusion in economic dialogue is seen by Japan and the other major powers as essential.

When Auden wrote the lines at the head of this article, much of Asia and the Pacific rim were colonies. Fifty years and decolonisation have passed, and many countries seem ready to move into what is referred to in Singapore as the "chopsticks century", as fully-fledged capitalist powers experiencing the same competitive pressures. As exploitation in South Korea intensified. leading to a series of strikes and a 20 per cent pay increase last year, suicides among housewives increased sharply. And in a rare demonstration of strength and solidarity, Thai workers in reorganised unions are demanding a social security system from birth to death.

Increasing US protectionism, and the anticipated strengthening of EC external tariffs with the community's impending economic unification, have led to calls for an Asian Common Market. We are not in the business of making predictions, and treat economists" forecasts with a caution derived from our knowledge of capitalisms' economic anarchy. Whichever scenario obtains — free trade or protectionism — Asian workers will indeed have lost their childhood.

Bill Robertson