Industrial nations should grow with Asia-S'pore PM

Industrial nations should grow with Asia-S'pore PM

SINGAPORE (Reuter): Industrialized countries should boost
their economies by capitalizing on explosive growth in Asia
instead of hindering it by pressing for social reforms,
Singapore's prime minister said yesterday.

"Industrial nations should seize the challenge and ride on the
growth of Asia," Goh Chok Tong said at the opening of an Asian
business conference.

"If they do not, and instead try to stem the flood tide, the
challenge would turn into economic conflict, and fragment the
world into economic blocs -- the European Union, NAFTA and
perhaps, a new Asian bloc."

Goh said the West is unfortunately ambivalent in welcoming and
encouraging the growth of giant Asian countries. He said some
Western leaders, politicians, trade unionists and others see
Asia's emergence as a threat rather than an opportunity.

"They fret about low-cost producers in Asia taking away their
jobs. They accuse low-wage Asian workers of undermining their
standard of living," Goh said.

"Attempts to check imports from low-wage countries, like the
recent efforts to introduce social clauses on workers' rights and
minimum wages into the GATT agenda, betray the West's fear of
competition from Asia and its growing sense of economic
insecurity. These thinly-veiled protectionist measures are short-
sighted."

Leading

Asia has already overtaken Europe as the leading export market
for the United States, accounting for over a quarter of U.S.
exports by 1992, Goh said.

China's imports alone have been growing by 25 percent
annually, but U.S. businessmen fear growing trade tensions could
soon shut them out of the world's biggest market.

Goh said emerging Asian economies are also unlikely to run the
kind of trade surpluses seen in Japan -- another bone of
contention with Western countries, most notably the United
States.

"In China, India and ASEAN (Association of Southeast Asian
Nations), consumer demand is not being suppressed, unlike in
Japan and the major newly industrializing economies in their
early development," he said.

"By the end of this decade, East Asia would import US$50
billion more goods and services than they export per year. Their
deficit could double to US$100 billion by 2010," he said.

Competition and international free trade is the only basis for
lasting economic growth, Goh said.

Rising unemployment in the West cannot be blamed on cheaper
labor costs in Asia, Goh said. He noted imports from developing
Asian countries account for less than four percent of consumption
of manufactured goods in developed countries.

Goh's comments echoed those last week by Malaysia's Prime
Minister Mahathir Mohamad, who said the West was using rhetoric
about rights and wages to prevent Asia from catching up.