Just in time

Just in time

Although no one has presented the present economic situation
in this perspective, I believe that the crisis is spelling the
end to Asia's soga shosa-led capitalism. Soga-shosa refers to
Japanese trading companies. They are part of Japan's strategy to
farm out outdated production methods and technology to its Asian
neighbors.

Asia's less developed economies continue to trail Japan,
receiving the crumbs from the Japanese table in the form of a
steady supply of transfers involving outdated products and
technology. Has anybody heard of a joint research and development
project between the Japanese and one of its neighbors? I have
never heard of them teaching other Asians their secrets for their
fabled top quality production methods.

The soga-shosa were the grease of the whole strategy to
rollover technology to less developed countries. They produce
nothing. Their job is to match a producer with a consumer and
talk with the bankers.

The rollover strategy works like this: For example, the
Taiwanese used to work in pineapple plantations. Then they
started producing tennis rackets and the pineapple production was
"rolled over" to the Philippines. In the case of the Koreans, it
was plywood. By 1979, Korean plywood manufacturers were moving
abroad for cheaper labor as well as to save on transportation.

As the Taiwanese graduated from tennis rackets they started
making dot-matrix printers. The tennis rackets were then rolled
over to Thailand.

Outdated technology was always farmed out to a country which
had lower labor costs or cheap raw materials. For the Japanese,
it was only a matter of pouring capital into another developing
country with a more competitive work force. After a country
became richer and more developed, it could be an export target
for the Japanese to market their goods. They could also transfer
higher technology into the country. The soga-shosa were ready for
that.

The problem for the latecomers is that a country that keeps
counting on only cheap labor or raw materials is not able to
develop properly. It is as if such countries could grow but hit
their heads on the ceiling making it impossible to grow any more.
If countries don't become aware of this, they could end up being
taken advantage of for a long time to come.

OSVALDO COELHO

Jakarta