The exhaustion of export-led industrialization was already evident _before_ the onset of the spectacular Asian crisis. The section titled "The Structural Squeeze" in Walden Bello & Stephanie Rosenfeld's _Dragons in Distress: Asia's Miracle Economies in Crisis_ (1990) explains the problem very well with regard to Taiwan:
***** As Taiwan's competitive advantage in labor costs was eroding in the face of severe wage competition from other third world countries, its technocrats offered the vision of a high-tech future. That vision, however, is turning out to be an illusion, as significant obstacles stand in the way of the structural transformation of the Taiwanese economy.
Japanese and U.S. corporations resisted significant transfer of advanced technologies, and their preference for their traditional suppliers limited the backward-linkage effects of their investments in Taiwan.
A close look at three key industries reveals the difficulties Taiwan encounters in making the technological transition....[Yoshie: I skip the example of textiles and garments here.]
In automobiles, the enormous capital and technological requirements of competing successfully with the giants of the international automobile industry have forced the KMT government to retreat from its initial ambition of making Taiwan an independent producer with a self-sustaining technological capability. Instead, it has had to accept a subordinate role in whatever division of labor is designed by the big Japanese, American, and European assemblers.
In the strategic area of electronics, Taiwan is finding it difficult to graduate from mass cloning based on the efficient organization of cheap labor and managed improvisation in the production process.... (276) *****
Beyond Taiwan, there's a general problem of overproduction: export what to where??? David McNally writes in "Globalization on Trial: Crisis and Class Struggle in East Asia," _Monthly Review_ 50.4 (September 1998):
***** In many cases, Asia has been the testing ground for much of the latest wave of capital accumulation. Auto, steel, electronics, computer chip, and fiber optics plants have been built pell-mell in the expectation that cheap labor, easy financing, and business-friendly governments with draconian labor regulations would guarantee good rates of return. Once the boom reached its limits, the results were predictable: enormous excess capacity and serious problems of profitability.
Take the case of the world automobile industry. Global excess capacity in autos today is around 21-22 million cars. That's roughly a 36 percent overcapacity relative to world markets, the equivalent of 80 efficient state-of-the-art plants. Yet, despite those realities-indeed, in capitalist logic, because of them-auto companies have been frantically building new capacity throughout Asia. Before the crisis broke, in fact, automobile firms planned investment projects that would see a doubling of Asian car manufacturing capacity outside of Korea and Japan, which are already staggering under excess capacity.
Similar problems of overaccumulation-of the creation of productive forces that cannot be utilized profitably-plague industries such as computer chips, semi-conductors, optical fibers, chemicals, and steel. The world market in dynamic random-access memory chips (DRAMs) is another case in point. Analysts estimate that the oversupply of DRAMs will be 18 percent this year, compared with zero as recently as 1995. The result has been a devastating collapse in prices (especially damaging for South Korea, which controls 40 percent of the global DRAM market). Prices of 64-megabit DRAMs plummeted from $60 in early 1997 to $20 by the end of the year. This year, prices have fallen as low as eight dollars (Wall Street Journal, June 4, 1998). The root cause of the Asian economic crisis is this sort of downward pressure on prices and profits brought on by overproduction. *****
Steve writes:
>Taiwan hasn't been a one party state for quite a while...even the
>Republicans long ago gave up on the KMT...so now the KMT is replaced by a
>party that is in many senses more pro-privatization than the KMT under Lee
>Denghui...Hurrah?
Multi-party elections and other trappings of bourgeois democracy are generally better vehicles for the neoliberal ruling class than dictatorships (which outlived their usefulness as anticommunist bulwark). "Free" elections = lots of karaoke. Here's a cult stud topic for you, Dennis.
Yoshie