Friday, 23 July 2010

Why the Asian growth model could still fail

“The rise of the rest should not be seen as a threat to the West” – this is a key message coming out of the recently released report by the OECD Development Centre entitled Shifting Wealth. Many countries envy the “Asian miracle” and try to imitate what they believe made the Chinese, Vietnamese, Indians and Thais successful. But what if the “rise of the rest”, i.e. the rise of Asia as a dominant region world-wide, were to stop? And not because of outside interventions or external shocks, but rather through increasing internal conflicts about how to share the fruits of the hard work.

A recent string of isolated events across a number of Asian countries are cause for concern. The examples below suggest that we are witnessing an erosion of social cohesion between different groups in these societies.

• In May this year, “red-shirt” protests against the government exploded across Thailand. The protesters largely portray themselves as rural and poor supporters of the former prime minister, opposed to the urban elites that back the current government. It appears that the fruits of the past progress in Thailand is perceived as not having been shared equally among the society.

• Just days ago, yet another suicide of a worker at the world’s largest contract maker of electronics, China’s Foxconn Technology Group, was reported. This makes 15 attempted or committed suicides this year among workers at this highly successful company, which produces parts for Apple’s popular iPods and iPhones. Low morale and a difficult working atmosphere are among some of the reasons cited for the suicides.

• In India, there has been an escalation of violence as Maoist rebels continue to engage in bombings and gunfights throughout Andra Pradesh and West Bengal states. India’s government has begrudgingly acknowledged they form the greatest internal security challenge for the South Asian giant. Calling themselves the Naxalite rebels, they claim to be fighting for the rights of rural poor who have been neglected by the government for decades.

• In June a long-running, quiet labour movement erupted onto the scene at Japanese-owned Honda factories across China, where workers demanded the right to form independent labour unions and asked for a doubling of their salaries to keep pace with rising prices in the country.

All the abovementioned cases represent a lack of social cohesion within the societies in question. Large portions of the population lack basic social services and also perceive that they aren’t fully benefiting from their society’s success. In other words, they see, or simply believe, that other people in their society are doing better than they are.

Are these single, isolated events or are they just the beginning of a broader movement of discontent which could turn into violent conflicts and thereby put an end to the Asian model of growth? While we do not have an answer for this, now is the time to act and re-think how societies can maintain a minimum level of cohesiveness while growing and catching up with the west.

As fellow blogger Jon Hall recently pointed out, there is a lot of promise in Asia to help us understand broader questions of how to measure progress in societies. Not so much because Asia is that different than the rest of the world, but more because it is a place where society is changing faster than the rest of the world. Any lessons we can draw from how to build a more cohesive society won’t just benefit Asia alone; it will also benefit the world as a whole.

Johannes Jutting and Chris Garroway

Photo used under Creative Commons from macgeek800.

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