East Asia set for more prosperity
EAST Asian countries have 45 per cent of global central bank reserves and keep piling up collective current account surpluses while Western industrialised countries keep accumulating current account deficits, according to World Economic Forum (WEF) senior adviser Claude Smadja.
It is expected that by 2000, East Asia will have created 40 per cent of all the new global purchasing power.
The region will also be able to absorb between 35 and 40 per cent of the increase in global imports.
'In fact, if the present trends continue, as should be the case barring some unforeseen upheavals taking a regional dimension, East Asia should be in a position to claim a clear pre-eminence before the turn of the century,' he said.
The industrialised countries had lost all the de facto monopoly on key prerequisites of economic power.
Mr Smadja said it had become a matter of life or death for corporations in industrialised nations and East Asian countries like Japan to involve themselves aggressively in the de-localisation process, to take advantage of lower production in the era of mega-competition.
'This is creating an intense pressure to rationalise production, to cut internal costs, to search for the lowest production base,' he said.
Until recently, blue collar workers were the most severely hurt by the restructuring but with the pressures brought on by mega-competition, white collar workers were affected as severely.
In addition, technological innovations have seen output grow in tandem with job losses.
'There is nothing wrong with this trend as long as the services sectors in the industrialised countries are able to absorb the workforce shed by manufacturing,' he said.