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.