As one sees the Red Shirt protests and the paralysis of the centre of Bangkok, it is worth recalling that almost 21 years ago it was the centre of Beijing that was occupied by the masses calling for the overthrow of the government.
Now Beijing is peaceful and China is riding so high that many expect it to become the largest economy in the world in the coming decades. But members of the Association of Southeast Asian Nations (ASEAN), including Thailand, Malaysia and Indonesia, which were lauded as the "Tiger economies" of Asia in the 1980s and early 1990s, seem to have lost their way and are clocking in half the GDP growth rates - about 4 per cent to 5 per cent - that they used to record in the 1980s.
Of course, as economies mature their growth rates tend to slow, but the problem is that ASEAN economies are slowing before they have become fully fledged advanced economies. Why is it that the ASEAN countries, which opened up their economies to foreign capital and investment earlier than China, could not sustain their lead? Will ASEAN countries ever be able to move up the value-added and income ladder to become advanced economies one day, or are they forever destined to remain middle-income economies, with their early promise unfulfilled and suffering from mid-life crisis?
There are many reasons for the ASEAN dilemma and different countries have different causes. But one common thread seems to be that ASEAN countries desperately lack the skilled manpower, particularly technical, that is needed to propel an economy from merely middle-income status to that of an advanced economy. Not many people outside of Asia realise this but the more affluent countries of ASEAN such as Malaysia and Thailand have per capita incomes that are substantially higher than that of China. But in terms of technical manpower, including quality and quantity, the ASEAN economies are lagging China and India.
China may be poor, but its citizens attach an extraordinary degree of importance to education. The average Chinese middle-class family spends between 25 per cent and 30 per cent on education, compared with about 10 per cent in ASEAN. Cheap labour alone may be able to take a country from poor to middle-income status if the government policies are right, but to become a truly advanced economy requires a lot of engineers and other skilled manpower as well.
Whatever the faults of the communist regimes of China and Vietnam might have been, they have built upon the Confucian reverence for education and have added an engineering layer to it. Thus these two countries have cheap labour and well-trained engineers and possibly more important, engineers leading the country. Both the Chinese president Hu Jintao and the premier Wen Jiabao were engineers. Vietnam was not a member of ASEAN in the 1980s, but its growth rates now are better than that of the original members. Part of the reason for this superior performance is its low wages and a population of 90 million, which is larger than that of most ASEAN countries. But the main factor why the chip maker Intel chose to locate its newest plant in Vietnam is because the country has plenty of good engineers, whereas Indonesia, which also has cheaper labour than China and a population even larger than that of Vietnam, does not.
In fact as wage costs rise, a number of multinationals and Taiwanese-owned companies are relocating some of their factories dependent on low wages from southern China to Vietnam. This shows that ASEAN countries still have a chance to attract foreign investment and move towards advanced status if they are willing to address their weak spot of lack of technical manpower. The ASEAN countries are aware of this big educational handicap and are taking steps to remedy it. But educational standards take much longer to build than towers and flyovers and therefore it may take a generation or two for ASEAN educational levels to catch up with those of China or Vietnam. The middle-income, mid-life crisis of ASEAN may last a bit longer but the chances are they will finally get over it, as most middle-aged people do.
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