Wednesday, 27 June 2012 15:36 Joseph Ball
(Book Review) – In 1925, U.S. President Calvin Coolidge quipped, “The business of America is business.” And while he went on in the same speech to qualify the social parameters of the statement, it is the simple mantra of ‘business, business, business’ that is memorialized.
Initial policies by Burma’s government following the unrest of the late 1980s similarly elected to focus on business and development in – what would have dire consequences – callous disregard of related social costs. And today, the Burmese government continues to prioritize business and development, but with the caveat that social costs will be addressed as required and acceptable so as to avoid derailing economic goals. It is a delicate balancing act, with no guarantee of success.
The Marketing of Nations: A Strategic Approach to Building National Wealth, a jointly authored text originally published in 1997, makes clear there is no magical elixir for countries seeking development and economic growth, with the ultimate criteria in determining success or failure being time and place. Rapid growth, the authors say, does not always reduce widespread poverty. However, the volume does attempt to identify relevant social and economic indicators that in the authors’ opinion should weigh in the minds of policymakers who promote rapid economic development.
According to The Marketing of Nations, “Cultural factors explain more than 50 per cent of differences in economic growth rates.” It is a massive figure, which, for example, the authors deem critical in explaining the disparate dimensions found in North Korea and South Korean. Succinctly put, it boils down to the fact that a country’s economy cannot be highly politicized if it is to reach its development potential.
What does this imply for Burma? Beyond the immediate and obvious need to resolve ethnic tensions and civil war, two other lessons are also paramount. First, all groups must participate and remain committed to the chosen economic plan. Second, the political axis needs to be strengthened by a common understanding of realistic development goals by a specified date.
For example, in Burma’s case, the idea here might be a timeline of 2020 by which time designated economic developmental benchmarks are to have been met. This date could then also serve as a point of scaling back armed forces personnel in the Burmese Parliament, as the position of the country and armed forces should in turn be strengthened, lessening any perceived need for a legislative safety net.
But, it is not a straightforward conclusion that, in the case of Burma, politics and economics can be so easily pared. Decades of overt interference in business by successive Burmese governments have calcified the relationship. As such, what may transpire, following historical models and criteria tracked by the authors, is a more socially responsible and inclusive partnership of Burmese elites.
Given much of East Asia’s recent and rapid economic development, it is unsurprising that Burmese elites should look to the region for inspiration. And though there are critical disparities, such as the relatively ethnically homogenous populations of some countries, there are also significant commonalties, such as the government – as opposed to private sector – being forced to play a dominant role in the early development of the state in the wake of a heavily fractured economy lacking in both infrastructure and institutional frameworks.
South Korea’s chaebol system is by no means an economic idyll, but it may hold a clue as to the direction of the Burmese state. The chaebol are large conglomerates characterized by strong ties with the government, inaugurated under the country’s authoritarian regimes. And while this model contributed much to the rapid development and poverty alleviation of the South Korean state, citizens are increasingly questioning whether the benefits of the chaebol model still outweigh the drawbacks, such as the influence of the chaebol over politics and the daily livelihood of the populace.
In Burma also, for decades, to succeed in business has meant cozying up to the country’s leaders, with the recent privatization drive serving to largely further strengthen the political-economic axis. Burmese entities such as Asia World and the Htoo Group enjoy established, privileged positions across a diverse range of industrial fields. In short, the rudimentary foundations of a chaebol system are already in place in Burma; especially as the country seems destined over the near future to experience some sort of hybrid democracy, providing the potential for bureaucracy to achieve the significant scope needed to manage a chaebol-type system.
So, would a Burmese chaebol be good? As with many issues, it depends very much on the quality of leadership and elite working arrangements, a theme continually referred to by the authors. Having undergone a painful transition to more democratic governance during the latter 1980s, Seoul has since sought to a degree to reign in the influence of chaebols, via legislation requiring specialization and other efforts.
For Burma, the large-scale government intervention required of a chaebol system could well exacerbate existing ill effects of government intervention, as identified in The Marketing of Nations: corruption, military overspending, resource misallocation and political instability. Moreover, there would, at the very least, be a distinct threat of ‘losing’ human rights in the push to secure economic Leviathans across the elite spectrum.
On the opposite end, a best case chaebol scenario for Burma may emphasize social responsibility, an idea partially encapsulated in what opposition leader Aung San Suu Kyi has defined as “practical help…in support of the reforms which can bring better lives [and] greater opportunities.” This would include, on the part of the political-business axis, assistance in building from the bottom up and supporting the growth of the small business community, as well as strengthening the position of civil and social elites.
But the future Burmese state need not take fully to heart South Korea’s contentious development model. Moreover, it may better suit the interests of the country’s political and economic leadership to spurn the temptation of a more oligarchical political-business relationship. Whether or not there develops a more broad-based elite accommodation in support of an institutionalized chaebol-type arrangement in Burma, the country must still adapt to changing global trends while meeting the conditions of today’s Burmese state. The following four points of analysis and assessments of a socially responsible Burmese state are developed from arguments put forth in The Marketing of Nations:
• A global services economy would shift comparative advantage to human over natural resources. Though much has been made of the resource riches of the country, simply ensuring a more equitable distribution of the spoils will not be enough for Burma’s advancement. Rather, Burma must realign itself in relation to changing global trends of the 21st century.
•
• Wages will no longer be the critical factor in deciding investment location. Rather, factors such as infrastructure and quality of labor will be of most significance. Though some East and Southeast Asian countries have benefited from a low-cost labor pool in spearheading development and poverty alleviation, Burma will likely need to invest in its labor pool – enhancing the quality of labor – in order to draw desired levels of foreign investment.
•
• SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis points to social cohesion and government leadership being the primary concerns to Burma’s development. This raises critical questions, such as, can Burma’s diverse ethnic communities, along with civil and social leaders, be included in a centralized program of accommodation?
•
• Given Burma’s large rural population, an agricultural development led industrialization approach should at least be considered, generating a surplus in rural savings to finance industrial development. While Naypyitaw has already specified poverty alleviation as a primary goal, it remains to be seen whether rural communities will prosper, or whether younger generations will increasingly be forced to flock to the urban centers in the hope higher wages, providing fertile ground for political turmoil through urban unrest.
(Book Review) – In 1925, U.S. President Calvin Coolidge quipped, “The business of America is business.” And while he went on in the same speech to qualify the social parameters of the statement, it is the simple mantra of ‘business, business, business’ that is memorialized.
The Marketing of Nations: A Strategic Approach to Building National Wealth, a jointly authored text originally published in 1997, makes clear there is no magical elixir for countries seeking development and economic growth, with the ultimate criteria in determining success or failure being time and place. Rapid growth, the authors say, does not always reduce widespread poverty. However, the volume does attempt to identify relevant social and economic indicators that in the authors’ opinion should weigh in the minds of policymakers who promote rapid economic development.
A culture of wealth?
According to The Marketing of Nations, “Cultural factors explain more than 50 per cent of differences in economic growth rates.” It is a massive figure, which, for example, the authors deem critical in explaining the disparate dimensions found in North Korea and South Korean. Succinctly put, it boils down to the fact that a country’s economy cannot be highly politicized if it is to reach its development potential.
What does this imply for Burma? Beyond the immediate and obvious need to resolve ethnic tensions and civil war, two other lessons are also paramount. First, all groups must participate and remain committed to the chosen economic plan. Second, the political axis needs to be strengthened by a common understanding of realistic development goals by a specified date.
For example, in Burma’s case, the idea here might be a timeline of 2020 by which time designated economic developmental benchmarks are to have been met. This date could then also serve as a point of scaling back armed forces personnel in the Burmese Parliament, as the position of the country and armed forces should in turn be strengthened, lessening any perceived need for a legislative safety net.
But, it is not a straightforward conclusion that, in the case of Burma, politics and economics can be so easily pared. Decades of overt interference in business by successive Burmese governments have calcified the relationship. As such, what may transpire, following historical models and criteria tracked by the authors, is a more socially responsible and inclusive partnership of Burmese elites.
Cultivating a Burmese chaebol?
Given much of East Asia’s recent and rapid economic development, it is unsurprising that Burmese elites should look to the region for inspiration. And though there are critical disparities, such as the relatively ethnically homogenous populations of some countries, there are also significant commonalties, such as the government – as opposed to private sector – being forced to play a dominant role in the early development of the state in the wake of a heavily fractured economy lacking in both infrastructure and institutional frameworks.
South Korea’s chaebol system is by no means an economic idyll, but it may hold a clue as to the direction of the Burmese state. The chaebol are large conglomerates characterized by strong ties with the government, inaugurated under the country’s authoritarian regimes. And while this model contributed much to the rapid development and poverty alleviation of the South Korean state, citizens are increasingly questioning whether the benefits of the chaebol model still outweigh the drawbacks, such as the influence of the chaebol over politics and the daily livelihood of the populace.
In Burma also, for decades, to succeed in business has meant cozying up to the country’s leaders, with the recent privatization drive serving to largely further strengthen the political-economic axis. Burmese entities such as Asia World and the Htoo Group enjoy established, privileged positions across a diverse range of industrial fields. In short, the rudimentary foundations of a chaebol system are already in place in Burma; especially as the country seems destined over the near future to experience some sort of hybrid democracy, providing the potential for bureaucracy to achieve the significant scope needed to manage a chaebol-type system.
So, would a Burmese chaebol be good? As with many issues, it depends very much on the quality of leadership and elite working arrangements, a theme continually referred to by the authors. Having undergone a painful transition to more democratic governance during the latter 1980s, Seoul has since sought to a degree to reign in the influence of chaebols, via legislation requiring specialization and other efforts.
For Burma, the large-scale government intervention required of a chaebol system could well exacerbate existing ill effects of government intervention, as identified in The Marketing of Nations: corruption, military overspending, resource misallocation and political instability. Moreover, there would, at the very least, be a distinct threat of ‘losing’ human rights in the push to secure economic Leviathans across the elite spectrum.
On the opposite end, a best case chaebol scenario for Burma may emphasize social responsibility, an idea partially encapsulated in what opposition leader Aung San Suu Kyi has defined as “practical help…in support of the reforms which can bring better lives [and] greater opportunities.” This would include, on the part of the political-business axis, assistance in building from the bottom up and supporting the growth of the small business community, as well as strengthening the position of civil and social elites.
Forecasts and prescriptions for the 21st century
But the future Burmese state need not take fully to heart South Korea’s contentious development model. Moreover, it may better suit the interests of the country’s political and economic leadership to spurn the temptation of a more oligarchical political-business relationship. Whether or not there develops a more broad-based elite accommodation in support of an institutionalized chaebol-type arrangement in Burma, the country must still adapt to changing global trends while meeting the conditions of today’s Burmese state. The following four points of analysis and assessments of a socially responsible Burmese state are developed from arguments put forth in The Marketing of Nations:
• A global services economy would shift comparative advantage to human over natural resources. Though much has been made of the resource riches of the country, simply ensuring a more equitable distribution of the spoils will not be enough for Burma’s advancement. Rather, Burma must realign itself in relation to changing global trends of the 21st century.
•
• Wages will no longer be the critical factor in deciding investment location. Rather, factors such as infrastructure and quality of labor will be of most significance. Though some East and Southeast Asian countries have benefited from a low-cost labor pool in spearheading development and poverty alleviation, Burma will likely need to invest in its labor pool – enhancing the quality of labor – in order to draw desired levels of foreign investment.
•
• SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis points to social cohesion and government leadership being the primary concerns to Burma’s development. This raises critical questions, such as, can Burma’s diverse ethnic communities, along with civil and social leaders, be included in a centralized program of accommodation?
•
• Given Burma’s large rural population, an agricultural development led industrialization approach should at least be considered, generating a surplus in rural savings to finance industrial development. While Naypyitaw has already specified poverty alleviation as a primary goal, it remains to be seen whether rural communities will prosper, or whether younger generations will increasingly be forced to flock to the urban centers in the hope higher wages, providing fertile ground for political turmoil through urban unrest.
The Marketing of Nations: A Strategic Approach to Building National Wealth by Philip Kotler, Somkid Jatusripitak and Suvit Maesincee. For more information, go to
http://www.amazon.com/Marketing-Nations-Strategic-Approach-Building/dp/068483488X/ref=sr_1_1?s=books&;ie=UTF8&qid=1340704046&sr=1-1&keywords=marketing+of+nations
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