To all. In the wake of my last, rather bleak, posting let me say why I am a long term Bull on Asia. Again I want to borrow heavily from another but the following comments very much reflect my personal experiences here in S.E. Asia.
The Hon. Mr. Chris Patten, former Governor of then held British held Hong Kong, in a speech given earlier this year , describes the fundamentals that led to the rapid economic growth in Asia.
It seemed to him that the single most important factor in Asia's rise to prosperity has been "the conviction in the hearts and minds of hundreds of millions of Asian men and women that life can and should improve for them and their families". Whatever technical explanations economists might offer, whatever geo-economic forces might have been at work, he believes that the engine of Asia's economic success has been the determination of Asians to haul their families out of subsistence and poverty towards a better life. It amounts to a belief in progress.
The second reason he gave for Asia's economic transformation was economic liberty. While many of Asia's governments were, and indeed remain, far from tolerant in their approach to civil and political liberties, most have come to recognize, sooner or later, the need to grant their citizens economic liberty. These governments have come to recognize, often through bitter experience, that enterprise and ambition can do more to transform their economies than regulation and bureaucracy.
Finally, while a belief in progress and economic liberty would have taken Asian communities part of the way to prosperity, it was FREE TRADE which gave Asia its big break. Access to North American and Western European markets made possible the rapid export-led growth of the post-war decades - a useful point to remember for those Asian politicians who attack the allegedly corrosive influences of the West. He characterized free trade as an idea born in Britain. An idea put into practice throughout the British Empire over a hundred years ago, and has been a hallmark of the resilient American economy. "Free Trade is an idea, call it a value, which is sustaining economic expansion and trade throughout the world today" he said.
Now we can use hind sight and talk all day about the various economic forces at work in Asia and the world today. But in reviewing Mr. Patten's comments it occurs to me that the fundamentals he refers to are largely unchanged. In fact, if anything the "ideal" of free trade is likely to be largely boosted as indeed, democratic ideals will as well. We only have to look at the result of the recent election in South Korea to see an early piece of evidence of this.
I am absolutely convinced of the veracity of the observations outlined above. As an American living in Kuala Lumpur my everyday life is deeply rooted in the Asian community. I am here at my own behest. I live in a neighborhood where I seldom see another Westerner. I am married to a wonderfully determined Asian lady, educate my children in a private school where there are no Westerners enrolled, shop in stalls and markets that are run by Asian sellers, and, while I worship in a Christian church that has a large membership of Western ex-patriates, I maintain a Bhuddist alter in my home for my mother-in-law who lives with us. I frequently accompany her to temple for celebratory days and speak with other members of her temple. The saving in our community has already begun. All that I speak to have drastically reduced their personal spending. I believe this is conditioned by the culture and centuries of wrestling with feast and famine. At the first sign of trouble the wagons are circled and defensive postures taken. My wife, a marketing executive in the automotive oem parts industry, is forecasting a 45% reduction in sales or her company next year. But, the company has cash and has moved quickly to adapt a model intended to survive the downturn. Incidentally, so far it has not led to any layoffs. In a recent management meeting, all members of senior management voted to forego a company sponsored vacation to visit Venice. Its initial intent was designed to reward the staff that had completed the most profitable year in the companies history. But that same staff, without flinching, voted to save that money for more important things. The vote was unanimous.
A brother-in-law whose electrical contracting business is debt free in spite of three years of extraordinary growth, is moving quickly to a model of providing maintenace contracts away from the new building sector. In 4 months of launching the newly modeled services the company has almost made a complete transition. In addition it is evaluating an export based product for manufacture.
I am convinced there is a level of determination here that is well prepared to weather this storm and emerge from it healthier and wiser.
Best,
Stitch |
