Asian economies warned of strikes

Asian economies warned of strikes

SINGAPORE (DPA): The massive labor unrest currently paralyzing
South Korea -- one of Asia's most mature "tiger economies" --
have prompted observers to speculate that other rapidly-
developing Asian countries might be naturally progressing toward
similar crises.

The region's sudden economic downturn over the past year has
added to concerns that East Asia's "economic miracle" might, by
its very nature, negate itself and crumble into inflation like
Japan's or labor woes like South Korea's.

Some fear the rising lifestyles that come with Asia's new
prosperity could easily scare away the foreign investors who made
it all possible -- and send them scouting for less-developed,
job-hungry countries to begin the cycle again.

In Singapore, a tiny island nation with no natural resources
and heavy dependence on manufacturing, the economy in recent
years has been so good that many companies have had to lure
employees with year-end bonuses equivalent to half their annual
salaries.

There is no unemployment, poverty or homelessness in
Singapore, and the best-selling car is Mercedes-Benz. Lifestyle
and wage expectations have been skyrocketing among the country's
notoriously status-conscious citizens.

Singapore's ever-resourceful government has managed to keep
many crucial manufacturers from fleeing all this by liberally
importing unskilled workers and by upgrading encouraging
concentration on higher-tech products.

But the country's domestic economy grew by only 3.2 per cent
in the third quarter of 1996, alarming Singaporeans accustomed to
double-digit growth. The manufacturing sector declined by 4.3 per
cent in the third quarter of 1996, its worst performance in a
decade.

Singapore's neighbor Malaysia faces a similar situation, with
manufactured exports growing by only 5.8 percent in 1996 after a
22.9 percent jump the year before.

Analysts in both countries, however, say the slump is due more
to a global decline in demand for electronics than to rising
wages, and that international investors' interest in Singapore
and Malaysia remains high.

Rising labour costs have been more of an issue in Thailand,
whose staple low-end exports such as garments, shoes and
processed foods are suddenly seeing competition from Eastern
Europe, South America and less-developed countries in Asia.

Thailand's export growth fell from 23.6 per cent in 1995 to
year- end estimates of zero per cent in 1996, a major
disappointment after the Bank of Thailand had forecast 14 per
cent growth for the year.

Indonesia's promise of a huge, inexpensive workforce and
improving infrastructure have not yet outweighed, in the eyes of
economists and investors, the ominous militarism, political
violence and corruption that have plagued the country throughout
its modern history.

International auto manufacturers reacted with disgust in
February when the Indonesian government awarded its new "national
car" project to a joint venture between a Korean carmaker and
Hutomo "Tommy" Suharto, the son of long-ruling President
Soeharto.

Indonesia was also torn by political and religious riots last
year, and humiliated when pro-independence activists from the
island of East Timor were awarded the Nobel peace prize.

Fueling the theory of investor flight to poorer countries, the
Philippines -- which has been dubbed "the sick man of Asia" due
to an inability to catch up with its neighbors -- had one of its
best years ever in 1996.

The Philippines' gross domestic product (GDP) grew an
estimated 5.5 percent in 1996, up from 4.8 percent in 1995 and
4.4 percent in 1994.

Economists say Philippine President Fidel Ramos' reforms,
which included dramatic liberalizations on foreign investment,
telecommunications and banking, helped convince formerly
reluctant investors to take advantage of the country's highly-
skilled, English- speaking work force and relatively low costs.