Asian economic miracle could continue: Study<\/p>\n
GENEVA (Reuter): Asia's \"economic miracle\" of the past 30
\nyears, the future of which has been questioned as growth in key
\ncountries has slowed, could continue for many decades, according
\nto an authoritative Swiss report.<\/p>\n
But further advance well into the 21st century will depend on
\ngovernments pursuing policies that sustain high savings and
\ninvestment and bring reform to agriculture and services, said the
\nreport from the Union Bank of Switzerland (UBS).<\/p>\n
\"If East Asian nations remain open to competition and
\ntechnology, and can avoid the pitfalls of heavy social subsidies
\nas their economies mature, an Asian 'miracle' can continue for
\nmany decades,\" it declared.<\/p>\n
\"High saving and a social commitment to education explain part
\nof the Asian success. They will not quickly fade,\" the report
\nsaid.<\/p>\n
\"Policies that subsidize sunset sectors like agriculture or
\nheavy industry and those that artificially raise labor or capital
\ncosts appear more important in explaining slowing productivity
\ngrowth than any shortage of new technology.<\/p>\n
Compiled by analysts at the bank, Switzerland's biggest and a
\nmajor player on the global financial scene, the report appeared
\nin the latest edition of the UBS English-language magazine,
\nInternational Finance.<\/p>\n
The UBS analysts said their findings cast doubt on suggestions
\nby some prominent economists that Asian growth could not continue
\nbecause it had come simply from adding labor and capital more
\nrapidly than other countries.<\/p>\n
These economists have argued that a decline in export growth
\nfrom the major East Asian countries was an early sign of overall
\nburn-out and a reflection of challenge from other developing
\neconomies elsewhere in Asia and in Latin America.<\/p>\n
But the UBS study, like a recent report by a senior World bank
\nofficial, found little support for this conclusion.<\/p>\n
Lower income countries could grow much faster than those
\nfurther up the development ladder if they organized their
\neconomies to use available technology efficiently and took full
\nadvantage of gains from international trade, it said.<\/p>\n
\"The basic factors that have been critical for Asia to take
\nadvantage of these opportunities appear durable -- high saving,
\nthe drive for education, and the will to organize economies to
\nmeet world market competition,\" the report added.<\/p>\n
\"The risks to continued above average Asian growth lie in
\npolitics, not in economic competition from the rest of the world,
\ntemporary infrastructure bottlenecks, shortages of particular raw
\nmaterials, or other often voiced concerns.\"<\/p>\n
The UBS analysts pointed to what they called \"the relatively
\nclosed consumer goods and service markets\" of many Asian
\ncountries as a potent reserve that if tapped could provide strong
\nsupport for sustaining overall growth rates.<\/p>\n
\"While manufacturing productivity is rising rapidly,
\nproductivity in the service industries remains relatively low,\"
\nthe report said.<\/p>\n
If Japan, for example, opened up its retail and financial
\nsectors to modern technology and international competition, it
\nadded, this would produce above average overall economic growth
\neven if productivity growth in manufacturing slowed to the pace
\nof other advanced industrial economies.<\/p>\n
Two of the leading \"dragons\" -- the city states of Hong Kong
\nand Singapore -- could both maintain growth if they sustained
\nhigh investment rates and ensured their economies were fully open
\nto global markets and international competition.<\/p>\n
For Hong Kong, the change to Chinese sovereignty in mid-1997
\nwould probably transfer income to the hinterland. \"But above
\naverage growth should still be possible if China as a whole
\ncontinues to grow rapidly,\" the report said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/asian-economic-miracle-could-continue-study-1447893297",
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"sponsor_url": "https:\/\/okusiassociates.com"
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