India-Japan Economic Relations

Here is my article on "India-Japan Economic Relations," written for the purpose of raising greater awareness of the current situation, constraints, and the way forward with regards to the bilateral economic relations, in conjunction with Prime Minister Yoshihiko Noda's official visit to Dehli on 28 December 2011.

Three Choices for Myanmar

At the end of her visit to Myanmar, Secretary of State Hillary Clinton indicated that IMF and the World Bank will send consultation missions to Myanmar soon for the purpose of supporting its efforts for economic reform and the promotion of economic growth. The two intergovernmental financial institutions are likely to prescribe a standard set of principles for Myanmar, viz., setting the prices right with good governance, openness and liberalization.

If these were recommended, but not being imposed as the conditinality to receiving financial assistance from the international community, Myanmar will at least has three choices to make. Namely, A: open up, B: liberalization, C: protection and regulation.

In this situation, if Myanmar chooses A, she will have limitation in dictating its own policies. If Myanmar chooses B, she will encounter fierce competition from external market forces. If Myanmar chooses C, she will defeat her intentions for economic reform and the promotion of economic growth. Therefore, the best approach for Myanmar is to adopt a combination of A, B and C. But, the key to this approach is Myanmar's human resources capacity.

巨人球団内の乱：雑感

プロ野球にあまり関心がないので、一つの球団のガバナンス、そしてそれがその球団の運営を支えている企業の経営陣とどういう関係にあるかが必ずしも理解できないでいる。その不勉強で、いま、メディアで報道されている巨人球団内の乱について中々理解しにくいものである。

会長、オーナー、社長、球団代表、ゼネラルマネジャーという序列があり、そして、試合の勝敗と深く関わる監督、ヘッドコーチ、コーチ等の序列もある。また、巨人球団は株式会社であり、その会長はデファクトに球団を支配している読売新聞社の会長でもある。単純に整理すれば、球団の会長はその支配権を持つ企業の会長でもあるので、その人物は絶対的な権力者であるに違いない。ただ、それはその人物が絶対的に正しいとは限らない。

王子製紙やオリンパスの不祥事は実にそれぞれの企業の絶対的な権力を持つ者によってもたらされていることが明らかである。さて、ジャイアンツと読売新聞の場合はどうなるのか。

Basil Leaves

My home grown basil leaves and self-made basil leaf pesto. Ingredients: fresh basil leaves, garlic, peanuts, sugar, salt, and olive oil.

Remembering Steve Job

My first encounter with Apple computers was in 1986, but have had to wait until 1991 for my first purchase--SE30. Since then I have collected a variety of Apple products. SJ's applied creativity has changed our digital lifestyles. His death is unmeasurable loss to all.

Why EU Rescue Plan Will Not Work

The EU financial rescue plan announced last Thursday (October 27) is not likely to save Greece from economic collapse or other member countries facing similar economic problems. The reason is simple. The financial support being galvanized is not for saving the countries from economic Armageddon, but it is for saving those banks who have lent money to those countries. Therefore, a better alternative is provided by Paul Krugman.

Read Paul Krugman's article in New York Times on October 27, 2011.

7 Billion of People Inhibit Our Earth

The United Nations Population Fund (UNFPA) launched its flagship report, State of the World Population: People and Possibilities in a World of 7 Billion.

On October 31, 2011, 7 billion people will inhibit the earth. The e-report is available at URL: http://www.unfpa.org/swp/

中国語の詩

麗澤从師漢帝嗣、
心義軒裏解虹霓。
从此不吟相如赋，
学渉古今貫東西。

2011年10月3日ラウ研究室にて博士課程の呂文亮君より贈られた。

日本語訳：

麗澤で漢帝の跡継ぎを師に就く、
それで、心義軒という書斎でこの世の謎を解いてゆく。
今後、「相如赋」など古典詩を読まないことにする、
広く古今東西のことを通じるように学術を修めていく。

Talking to Joseph Stiglitz

Introducing a new proposal on "A New Aid System For The Era of Globalisation" to Joseph Stiglitz, 2001 Nobel Laureate in Economic Sciences, at the 15th Forum 2000 Conference, on 9 October 2011 at Prague.

My Mini-Bonsai

Mini-Bonsai, produced by Lau Sim Yee, 2 October 2011.

2 October, 50 Years Ago

According to http://www.historyorb.com/, on 2 October 1961, there were 4 major historical events:

1) "Ben Casey" premieres on NBC-TV
2) USSR performs nuclear test at Novaya Zemlya USSR
3) WETA TV channel 26 in Washington, DC (PBS) begins broadcasting
4) WHRO TV channel 15 in Hampton-Norfolk, VA (PBS) begins broadcasting

日本のソフトパワー？

SMAPは16日の夜に北京で初の海外コンサートを開催し、中国ファンの駆け込みで大成功したようである。このコンサートは日中両国のメディアから高く評価され、久しぶりに両国の関係が好感をもたらしている。テレビによれば、あるファンは月給4,000元（約４万円）で、チケット代が2,000元（約2万円）でも惜しまないという。近隣諸国を旅すれば、日本のアイドルタレントはかなり人気が高いことに気が付くと思う。

日本のビジネス外交では、自動車、精密機械・機材、環境に優しい製品、新幹線や原子力発電機等のモノを外国に売り込むために専属な外交官や業界組織等がある。SMAPの北京コンサートから日本は人々の生活文化に根付きやすいソフトパワーを活かせば、新たなビジネスチャンスが生まれるのみならず、各国が日本に対する親しみさも増すに違いない。また、そういうソフトパワーの輸出は為替の変動に影響を受けないと考えられよう。

なるほど、野田総理は「ドジョウ」外交にそういう戦略を打ち出し、まずはSMAPを対中国の大使に任命することである。それは某商社の会長を経験した現役対中大使よりも日中両国の民間交流がさらに高まると思う。

復興増税：雑感

東日本大震災が発生して半年が過ぎた。政府は震災からの復興期間が10年、その事業費を23兆円規模と決定した。その震災事業費の半分を「臨時増税」で国民が連帯して負担することになる。この「復興貢献特別所得税」に係わる増税期間は5年間とする声もあれは、復興期間と同様に10年間に、または国民の負担を軽減させるために15～20年にすべきという声も聞こえてくる。何れにせよ、震災からの復興は金がなければできないものであり、問題は金の調達に要する期間の違いである。

この増税に関して、「消費税」の増税という手段もあるが、どうもそれの受けが与野党の両陣営においても敬遠されているようである。不思議にかなり多くの政治家は「消費税」増税が政治の命が落とされることを迷信しているようである。11.2兆円の財源は5％の「消費税」に相当するものであり、一年間だけで全額を確保できるのは「経済学」の学位を持っていなくても分かるはず。それに今後基礎年金や保険料の負担増の財源を確保しなければならないことを考えれば、復興貢献を契機に「消費税」を10％に引き上げた方が合理的であろう。つまり、2012年度の消費税増税分を復興事業に、2013年以降はそれを基礎年金や保険料に充てることである。

残念ながら、多くの政治家は目先のことにしか関心がない。例えると、沸騰した湯の鍋にカエルを入れると、カエルが飛び出してしまい、逆に生温かい水を入れた鍋にカエルを入れ、沸騰するまでゆっくりと温度を上げていけば、カエルが安楽に死んでいく。今回の復興増税は正にこの比喩の通りである。国民は政治とは何かについて真剣に考えなければ、皆がカエルの例えのようになる。

米国の戦争費用

ロンドンの『エコノミスト』によれが、ブラウン大学の試算はこの10年間米国のアフガンとイラクでの戦争が約

１）13万7千人の民間人が犠牲となった。
２）780万の人々が難民がなっと。
３）4兆ドル（約320兆円）の費用がかかった（利子や退役兵士のケア等の費用を含む）。

戦争の費用だけはインドのGDPの2倍に相当する規模である。また、年間財政赤字が約1.4兆ドル（112兆円）であると言われている中で、米国にとっては世界の警察を引き受けると同時に、世界中に民主主義を広めるのが安くない。

ウサーマ・ビン・ラディンと「容疑者」の意味

10年前の今日は世界が変わったと良く言われており、米同時テロから10年になります。その多発テロの首謀者とされるウサーマ・ビン・ラディンはさる5月に米国の特集部隊によって殺害されたが、世界最強の国でる米国はアルカイダとの戦いが未だに続いている。米国や多くの国々はウサーマ・ビン・タディンを「９・１１」の首謀者と断定しているのに対して、日本のマスコミは未だに彼を容疑者と扱っている。それに対して異和感があって仕方がない。

「はてなキーワード」によれば「容疑者」とは、マスコミ用語として犯罪の容疑を受けている者を言い、法律用語では被疑者と同様な意味である。こうした扱いが正しければ、米国はウサーマ・ビン・タディン容疑者を法的に裁かないまま殺害したことになる。他方、米国にとっては死亡者は約3,000人、負傷者が約6,300人からウサーマ・ビン・ラディンを同時多発テロの首謀者とし、法的な適法手続きを経なくても、一見して殺す（kill at first sight）に値するとしていた。それが米国の言う正義であろう。

こうして見れば、日本のマスコミは如何なる意で「容疑者」という表現を用いているのか。単に法的な判定がない限り、ウサーマ・ビン・タディンはあくまでも推定無罪であるという立場を示しているのか。そうだとすれば、米同時テロの被害者はどう思うのであろうか。

首相の迷言？

2011　野田佳彦　　　「ドジョウ」
2010　管直人　　　　「。。。目途に」
2009　鳩山由紀夫　　「トラストミー」
2008　麻生太郎　　　「未曾有（みぞうゆう）」
2007　福田康夫　　　「。。。あなたと違うんです！」
2006　安倍晋三　　　「美しい国」

共同誕生日会：提案

5月24日は渡辺恒三氏と小沢一郎氏の誕生日で、都内で4年ぶりに共同誕生日会を開催した。この共同誕生日会に160名の国会議員も参加したようである。偶然にも母はお二人と同じ誕生日である。

来年、是非母も入れて「日本とマレーシアのシルバー交流」をテーマに共同誕生日を開きたい。

世界人口70億人

国連は2011年10月末に 世界人口は70億人に達し、2100年に世界人口は101億人となる予測を発表した。再生不可能な鉱物資源、再生可能な天然資源、食糧、水等で地球は果たして100億以上の人口を保有することが可能だろうかという悲観的な懸念もあれば、人類の知恵を活かし、一層に科学技術を進歩させて人口の増大は問題にならないという楽観的な見方もあろう。

何れにせよ、他のことが変わらなければ、この地球上に１年に約6,000万人が亡くなっているのに対して、2100年までの間に１秒：1人、1分：63人、1時間：3,805人、1日：913,242、1年：3,333万人、90年：30億人が増えている ことになる。

Dr. Rajendra Kumar Pachauri

Photographed with Dr. Pachauri, Chair of the 2007's Nobel Peace Prize-winning Intergovernmental Panel on Climate Change (IPCC), at a reception in Tokyo on February 24, 2011.

管総理の選択

　民主党の小沢グループは小沢氏を党代表選に出馬するよう環境作りに励んでいる。彼らに政局を仰ぐ余裕があれば、経済再生のための政治に精力を注いでほしい。そういう政局しか関心を持たない議員達の行動を見ると、実に憤慨である。管総理もそれを同感してくれると思いたい。管総理は民主党の議員に対して一人でも党代表選に出馬するなら、党代表選の前に衆議院の解散・総選挙をちらつかせておけば、反管総理の議員達は現状維持の方がよいと思うようになる。

　国民は民主党に国の再生に託したが、鳩山前首相の優柔不断によってマニフェストに掲げている目標が大幅に乖離している他、自らの政治資金管理のいい加減さ、さらに小沢氏の政治とカネや旧態依然の政治行動等によって民主党に対する信頼は大きく揺らいだ。本来ならば、鳩山前首相は辞任にあたり、衆議院を解散して総選挙を実施することが望ましい。しかしながら、敢えて国民の信を問わないままに、菅直人は総理大臣に選ばれた。参議選で民主党は大幅に議席を失い、再び衆参両院のねじれ現象が起きている。メディアや民主党の多くの議員（とりわけ、小沢氏の子分ら）、さらに自民党は管総理が消費税の引き上げを選挙の看板にしたことを原因に国民からノーと突き付けられたと主張している。果たしてそうなのか、いやそれは一部の原因であり、鳩山氏と小沢氏に対する拒否反応ももう一つの大きな原因である。それでもなお小沢氏を党代表選に担ぎ出すのは如何なものか。

　管総理は国の政治にとってベストの選択は自らの決断で衆議院を解散し、総選挙を実施することである。それができないならば、セカンドベストの選択は民主党の議員に「カンイズム」という政治理念を実現するため、党代表選に挑戦させないよう、２年後の代表任期満了に民主党を率いて総選挙を臨むことである。

就職留年

　2011年3月末に約56万8000人の大学生が卒業される予定である。リーマンショック以降の世界経済不況、ならびに依然として国内の経済構造が転換できない状態に起因する有効需要の不足が続いている中で、来年の春に卒業する大学生は仕事に就かない者は約７万9000人と各メディアの集計で明らかになった。実際に大学院（修士や博士課程）の修了者をもカウントすれば、教育課程を終えて大学・大学院を出る人の数と仕事に就く目処が立たない人の数はもっと高いと思われる。実に深刻な問題である。

　そうした状況下で、文部科学省を中心に政府は就職が出来ない新卒予定者に対する支援を乗り出している。たとえば、就職留年の学生に授業料の一部を公的資金で補助したり、大学の卒業予定者の「エンポロイアビリティ（雇用可能能力）」を高めさせるため、就職活動を仲介・支援する大学のキャリアセンターに就活支援の専門家を配置する費用を補助したりする等がある。残念ながら、政府や大学側の対応策は就職率を高めさせることにあまり役に立たない。のみならず、国家財源の浪費をさえもたらしてしまう。実に、政府や大学側の支援策、あるいはこれから就職留年の対策は「エンポロイアビリティ（雇用可能能力）」を高めることにほぼ関係のないものである。その根拠は少なくとも以下の二つである。

　グローバル経済や国内の社会経済構造が既に変わっている中で、大学の教育内容は依然として供給側の論理で組み立てられている。如何に学生の素質を世の中が求められている人材に育成していくかよりも、大学の教授らが各自の研究成果は世間の実態と関係なく、学生に教え込む（または、紹介する）。さらに、大学のキャリアセンターは就職希望者に対して求人情報の提供とか、どこの企業に同大学を卒業したOB/OGを介して会社説明会に関する情報を提供する業務等のみに専念しているようである。そのプロセスに学生の能力や素質等からなる「エンポロイアビリティ（雇用可能能力）」と無関係の業務である。それは売り手側の商品の品質と無関係に買い手側に紹介して売買を成立させる例えである。

　企業は正規な従業員を多く雇えない理由は二つある。まず、有効需要が不足していること、または供給サイドが過剰であることによって雇用が増えない。もう一つの理由は新卒の初任給、そして彼らを採用した後の給与水準は限界労働生産性に合致していないことである。現に新卒の平均的な初任給は約18万～20万にあると思われ、それが企業にとって負担が高すぎる。にもかかわらず、卒業予定者はその認識を持っていない。売手と買手は非対称な認識という状態に陥っている。売手は賃金の下方硬直性という法則に固執しすぎである。初任給を大幅に（50％、8万～10万）引き避けない限り、労働力の買い手が現れない。また、政府は就職留年の授業料を補助するよりも、その財源を大幅な就任給が引き避けられた新規雇用者に対する補填に回した方が経済に取って効果的である。なぜならば、これらの新規雇用者の消費規模は就職留年者よりも大きく、有効需要の誘発に寄与することになるのである。

If David Cameron will say:

On August 10, 2010, Japanese Prime Minister Kan Naoto, like all his predecessors,apologized to South Korea for Japan's annexation of the country in August 1910. The Japanese colonial rule over South Korea lasted for 36 years, which ended in August 1945.

Similarly, with a wishful thinking, there are many people who wish to hear from the UK Prime Minister David Cameron to offering the following statement (adapted and modified from PM Kan Naoto's statement):

"This year is the 65th Anniversary of the end of the War World II in Asia and the Pacific region. Thus, this year marks a significant juncture for the United Kingdom and all its Commonwealth member countries in Asia such as Pakistan, India, Bangladesh, Sri Lanka, Myanmar, Malaysia, Singapore and others. Since our colonial rule in those countries from the mid-19th Century, people of that time were deprived of their basic rights, and their national pride was deeply scarred by the colonial rule which was imposed against their will under the colonial circumstances......................

I would like to face history with sincerity. I would like to have courage to squarely confront the facts of history and humility to accept them, as well as to be honest to reflect upon the errors of our own. Those who render pain tend to forget it while those who suffered cannot forget it easily. To the tremendous damage and sufferings that our colonial rule caused, and still continue to suffer from our colonial legacies in several of those Commonwealth countries, I express here my feelings of deep remorse and my heartfelt apology.

Guided by such understanding, ...............I will in all sincerity to undertake the assistance to many Indian, Sri Lankan, Burmese, Chinese and other ethnics, who have remained in another Commonwealth country as a result of forced labor during our colonial rule. I will transfer precious antiquities of British Museum, which were originated but confistigated from our Asia Commonwealth countries during our colonial rule...............

Our Asian Commonwealth countries have become the most important and closest nations for the UK now in this twenty-first century, sharing such values as democracy, freedom, and market economy. Our relationship is not confined to our bilateral relations, but rather it is a partnership where we cooperate and exercise leadership for the peace and prosperity of the world by encompassing a broad spectrum of agenda the international community, the growth and development of the world's economy, as well as issues of global scale such as nuclear disarmament, climate change, poverty and peace-building.

At this significant juncture of history, I strongly hope that our bond will become even more profound and solid between the UK and our Asian Commonwealth countries, and I declare my determination to make every ceaseless effort to open the future between our two nations."

Queen save the Prime Minister, salute and prayer!!

円高とメディア

　８月に入って円・ドル、そして円対主要通貨の為替レートは高くなってきた。それを受け、メディアが一段高くなった円は経済状況は更に悪化させ、特に輸出向きの企業にとっては国内外の側面からダブルパンチで食らわれていると報道している。たとえば、トヨタ自動車は対ドルの為替レートは１円高の場合利益が300億円減少するという例が良く引き出されている。しかし、経済学のイロハをさえ理解すれば、現実に円高がもたらした影響は必ずしもメディア報道の通りではない。

　第一に、為替レートの価値は物価と貿易量の要素を考慮に入れて評価しなければならない。つまり、物価と貿易量を反映した為替レートから円の真の価値を評価すべてである。物価と貿易量を加味した指標は実質実効為替レートと言う。円対ドルの実質実効為替レートは日銀が過去30年の推移をまとめており、円対ドルの実質実効為替レート指数を見れば、2005年は100とすれば、2010年7月現在それが98.36となった。つまり、円対ドルの為替レートは物価と貿易量を考慮に入れれば、決して円高になっていない。したがって、いまの円高と声高に叫ばれる根拠はなく、いまの円はむしろ2005年よりも価値が低い。

　第二に、日本の輸出はGDP比が約12％（約60兆円）であるに対して、輸入はGDP比が約10％（50兆円）である。さらに、製造業に占めるGDP比は約20％に過ぎず、その半分は輸出の付加価値に寄与していると考えてよい。実は輸出商品の中に全てトヨタ自動車のように完成品ではなく、多くは中間財であり、それらの中間財は海外の日本企業へ欧米等の多国籍企業に供給されている。アップル社はアイホンやアイパッドのような製品を作るために日本企業から中間部品を購入している。円高で代替部品が見つからない限り、アップル社としては他のコストを削減してもアイホンやアイパッドの製品を値上げさせないで販売が続いている。言い換えれば、必要がされる部品が日本国内で製造され、円高の影響はあるとすれば、それが末端の完成品の販売元にそれが転化され、日本国内の企業にとってさほど影響を及ぼさないはずである。こうしてみれば、円高の影響はメディア報道のように深刻ではないことを理解できよう。

　日本の不況は構造的なものであり、それが政治不全の状況によってさらに不況脱出の糸口が導かれない状況が続いている。円高は輸入にもってプラスな効果が大きく、海外旅行も安くなったりするように、この不況の中でも生活を豊かにさせることが十分可能である。にもかかわらず、メディアは日本の再生に国民に対して本質か建設的な言論を提示しないまま、毎日円高だ、政局だ等の極めてレベルの低い報道を作り出し続け、この国はメディアによって滅ぼさせかねない。

高齢者行方不明

　超高齢化社会になりつつある日本では、100歳を超えている高齢者は約4万人となっている。ここ数日間、メディアの報道によれば、行方不明となった100歳を超えた高齢者は各地で続々と判明され、産業新聞の調べによれば今日現在その数は既に71人となった。これまで、高齢化社会という社会状況の中で、行政部門においては日課のように届け等の書類を通じて100歳を越えた高齢者数を把握してきた。つまり、死亡届けや行方不明等の書類さえ出されていなければ、最後に提出した行政が求められている書類をもとに100歳を超えた高齢者数を集計しているので、その数の信憑性に誰も疑うこともなかったのであろう。しかしながら、その前提と異なるのは現実である。
　この問題が発端されてから各地の役所の担当者は異例の暑い日々に100歳を越えた高齢者の所在確認に追われており、大変のようである。警視庁の資料によれば、2009年度に家出人捜索願は81,644人であり、行方が判明できたのは79,936で、1,708人は行方不明となっているようである。極端に比べれば、その数は超高齢者の行方不明の数よりも遥かに高い（約2.1％対0.2％）。
　役人を弁護するつもりはないが、行方不明になった超高齢者は行政上の瑕疵が生じたとかの問題ではないように思う。むしろ、家族の絆が崩壊してしまった現在の社会によって生じたものである。家族とは何か、改めて超高齢化社会になる日本社会は家族の絆を真剣に取り戻さねばならないというまでもない。

民間人の活用

鳩山前内閣の意向を引継いだ形で、菅首相は丹羽宇一朗氏を駐中国大使の任命、さらに高速道路会社５社の社長という要職に民間企業からの人材を充てることを正式に決定した。政府または国有企業の要職に民間企業での経験者を活用するのはアメリカやヨーロッパ諸国ではよく見られるので、菅内閣の決定に対して異論はない。

しかし、やはり人選のプロセスは必ずしも透明ではない処が気に掛かる。特に、官僚組織のはい抜きは専門的な能力が限界だとか、官僚OBの場合は天下りだとか、という理由のみで、民間人の抜擢を正当化する傾向に疑問をもつ。なぜならば、日本の民間企業に長く勤めた経験者を、外交や国有企業の経営などに就かしても能力の限界やミスマッチが生じる可能性でも生じない保証はないのである。仮に、そういう問題を考慮に入れたうえの判断であっても、任命権をもつ首相や大臣の恣意性が問われかねない。

恣意的な意向を極力に取り除くため、人選のプロセスを透明にする必要がある。アメリカの経験を参考にすれば、次のような対応によって人選プロセスの透明性を確保することができよう。

まず、有識者の代表から中立的な人選委員会を設置する。その委員会は政府または大臣が指名した候補者から最も適任する候補を選ぶ。国会は超党派の衆議議員からなる委員会を設置し、公開ヒヤリングを経て選ばれた候補者の適任性を確認し、そのプロセスをクリアした候補者のみ、首相に推薦して承諾の手続きを完了する、というような具体的なアプローチを早急に確立してほしい。

サッカーワールドカップと日中韓

南アフリカで行われている第１９回FIFAワールドカップにはアジア地区から日本、韓国、北朝鮮が出場している。この３カ国の代表的な選手はＪリーグで活躍している。日本を代表する選手を紹介するまでもなく、韓国はイ・ジョンスは鹿島アントラーズ、パク・チソンはかつて京都サンガ（現マン・ユ）等の選手がいる。北朝鮮は鄭大世（チョンチセ、川崎フロンターレ）と安英学（アンヨンハツ、大宮アルディージャ）の二人である。Ｊリーグはヨーロッパ諸国の主要なサッカーリーグと同じく、ワールドカップ級の選手が活躍する場となってきたのに、ここ数年Ｊリーグは中々盛り上がらない。

Ｊリーグの各チームはもう一度地域に根付くサッカークラブという原点に戻り、さらにサッカー以外のスポーツも取り組むよう切望する。日本、中国および韓国の経済は凡そ1,100兆円であり、北米やＥＵに続く第３の経済地域である。このような経済規模ならば、日中韓３カ国が共同してヨーロッパ地域のサッカーリーグと競合できる舞台を用意することができるはずである。そうすれば、世界中の一流選手が集まってくると同時に、サッカーをはじめ他のスポーツ競技も活性化され、結果として３カ国の人々や文化などの交流が一層高まり、ひいては経済規模もさらに大きくなる。

Honorary Doctorate for PM Dato' Sri Najib Razak

On his official visit to Japan from April 18 to 20, 2009, PM Dato' Sri Najib Razak was conferred a Honorary Doctorate by Meiji University on April 20. The honorary doctorate was conferred for PM's outstanding records in promoting development in Malaysia, and Japan-Malaysia relation.

The conferment ceremony was attended by more than 500 people, including Malaysian students studying in Meijing University and other Japanese universities.

Meeting PM Najib Razak in Tokyo

Met PM Dato' Sri Najib Razak on April 19, at the State Guest House, Akasaka Palace, during PM's official visit to Japan.

Malaysian Prime Minister's Visit to Japan

PM Dato' Sri Najib Razak visited Japan had an official visit to Japan from April 18 to 20. In this first official visit, since becoming the 6th Malaysian Prime Minister, PM Dato' Sri Najib Razak and Datin Sri Rosmah Mansor were received in audience by Their Majesties the Emperor and Empress of Japan.

In addition, PM hold official meetings with Japanese PM Yukio Hatoyama. The Summit Meeting between the two leaders concluded with a joint-statement for Malaysia-Japan's "Enhanced Partnership for a New Frontier," which lays out the following 4 key areas of cooperation.

• Cooperation for Peace and Security;
• Cooperation for Strengthening Competitiveness and Sustainable Growth;
• Cooperation for Contribution in the Areas of Environment and Energy;
• Cooperation for Human Resources Development and People to People Exchange.

Both leaders also concluded an agreement on "Japan-Malaysia Cooperation Initiative on Environment and Energy."

Japan's interest in Malaysia has declined substantially during the premiership of Abdullah Badawi in the past few years because of his weak leadership and incapability to articulate partnership with Japan.

But, PM Dato's Sri Najib Razak's visit to Japan has rekindled a renewed Malaysia-Japan relation, whereby "Look East Policy" has been one of the key pillars. At the same time it has also initiated new partnership for a forward looking cooperation beyond bilateral relations. From now on, the focus is to transform various initiatives into specific actions.

アメリカの株価上昇への疑問

4月に入ってから米国経済に関する代表的な指標の数字は予想よりも芳しく、経済回復の期待が高まっている中で、14日にニューヨーク株式市場でダウ平均は11,123.11ドルで取引を終えた。これは2008年9月末の水準であるという。株価の動向は果たして現実の経済状況を反映しているかについて意見が分かれるのであろう。

株価は景気の先行指標であるとしばしば指摘される。したがって、近日のダウ平均の上昇は米国の景気が回復しつつあることを現しているのである。しかしながら、実物経済を測る米国の鉱工業生産はまだリーマンショック前のレベルに戻っていない。それなのに、なぜダウ平均が上昇しているのか。論理的に整理すれば、次のことになる。

株価は企業の将来収益を反映して形成されるものであり、ダウ平均の上昇はその指標を構成する企業の株が上がっている結果であり、同時にそれはそれぞれの企業の将来収益が増加するという期待によるものである。しかしながら、依然として鉱工業生産水準は低い状況の中で、企業の将来収益はなぜ増えるか、という疑問が残ると思われる。それは株価の上昇によって資産効果がプラスに働くと期待されているから、という説明になる。

リチャード・クーは米国の景気は決して株価ほどに回復されていないと警告している。同感である。ニューヨーク株式市場で景気回復を先行して株価が上昇しているのは、機関投資家などのプレやーによってもたらされた投機的な行動の結果であると指摘したい。つまり、企業の配当を得るよりも、短期的に株の売り買いという需給関係で一時的に株価を上げさせたりして利益を得る行動である。

アメリカ型自由経済・資本主義はサブ・プライム問題を起こし、それを端に発した先進国の経済危機という教訓は2年間が経たないうちに、再びに投機的な経済行動を中心に経済が動いているように見える。人間のアニマル・スピリットを抑止する資本主義を構築しない限り、ますますグローバル化になる経済においてより短いタイムスパンで危機が繰り返して起きるのであろう。

鳩山総理とオバマ大統領の非公式会談：雑感

核安全保障サミットへ出席された鳩山総理はオバマ大統領との公式会談が実現できなかった代わりに、外務省は米国のカウンターパートの理解を得て、夕食会に両首脳が隣り合わせの席上にて非公式会談をセットした。あいにくその会談はわずか10分程度に過ぎなかった。会談の主旨は普天間移設に関するものであった。

首脳同士の会談であるが故に、鳩山総理は日本語で、オバマ大統領は英語で、間にそれぞれの通訳を介して会談が行われたに違いない。また、10分間の会談だったので、それぞれの首脳の持ち時間は5分となり、通訳を介すれば一人の正味は概ね2.5分という計算になるのであろう。そうした状況の中で、各首脳の発言はたやすく以下のように推測することができよう。

「バラック、この夕食会においてお隣に座らせて頂いて非常に光栄に思い、謝意を表します。これを機会に、普天間移設問題について説明させて頂きたい。昨年の11月に東京で話し合った以降、日米同盟や日米安保条約の精神を維持し、宜野湾市の市民をはじめ沖縄県の県民、ひいては日本国民の期待を尊重しながら、あらゆる側面から検討させていただいており、私と致しましては、全力して5月末までに最善な結論を出すことに致します。トラストミープリーズ、バラック。」

（日英通訳後）

「ユキオ、こちらこそ、私が主催している核セキュリティーサミットにご出席頂き、厚く御礼申し上げます。核兵器無きの世界を実現させるために、日本からの協力が極めて重要であるので、よろしくお願い申し上げます。さて、普天間移設問題は正に日米同盟や日米安全条約の礎であるのみならず、わが国の国際社会の安全保障において最も重要かつ戦略的な基地となっております。ユキオのご尽力とご英断による普天間移設問題の円満な解決を高く期待しているところです。」

（英日通訳後）

「サンキューベリーマッチ、バラック」、（握手しながら）、「ノープロブレム、ユキオ、レッツ　イート」。

報道メディアの「翻訳力」

日本の報道メディアは依然として政治に関心がなく、政局を煽る記事やニュースをばかり報道している。中でも、政治家の発言を「メディア語」に翻訳され、政局を煽る記事が多く作られている。以下の二つは具体的な例である。

その一つ、前原誠司国土交通相のテレビ番組で発言したものである（3月28日、テレビ朝日番組）。発言主旨は小沢民主党幹事長の「政治資金」に関するものであった。前原誠司大臣は「自身（小沢一郎氏）が幹事長という立場にあって、どうすれば参院選に勝てるのか考えてもらうことが大事だ」と述べたことを、メディアは「（前原誠司大臣が）国民の理解が得られない場合は自ら進退を判断すべきだとの認識を示した」という「メディア語」に翻訳された記事であった。

次に同じく前原誠司国土交通相は9日の午前に行った記者会見で、「政権交代をしたという 歴史的使命感に立って当事者が判断することだ」と述べたことを、メディアは「（前原誠司大臣が小沢一郎幹事長は）自発的に進退を検討すべきだとの考えを示した発言だ」という「メディア語」に翻訳された記事であった。

以上のように、報道メデァアは、前原誠司大臣が実際に発言したもの（イタリックの文章）を政局を煽るような解読や見解（太字の文章）を一般大衆に伝えるのである。政治家の発言は日本語という言葉通りに解せず、あるいはその発言の真意が言葉のままではなく解読が必要であり、何より報道メディアはその解読力をしか持ち得ない、という不思議な報道メディアの翻訳・解読の力であろう。

首都高山手トンネル

西新宿JCTから大橋JCTまで4.3キロ区間が3月28日に開通することになり、約18年間をかけて全長11キロの首都高山手トンネルの建設はようやく完成されたのである。前半の熊野町JCTから西新宿までの6.7キロ区間は07年12月に開通した。山手トンネルの区間は板橋の熊野町JCTから渋谷の大橋JCTまでである。

当該トンネルは先駆的な工法で「シールドマシン」という直径約13メートルの円形堀削機によって造られた。また、騒音、排気ガス、トンネル上の景観、沿道環境などのエコロジー・環境にやさしい技術が導入されている。

首都高速道路株式会社の資料によれば、利用者は都心環状線を通さず、山手トンネルで東北道と東名を結ぶ走行距離は約5キロが短くなり、それの通過時間は18が短縮されるという。それによって年間約34,000トンのCO2削減に貢献する。CO2トン当たり2,000円だとすれば、年間6,800万円の価値となるのであろう。温暖化効果ガスの削減とは別に、利用者の時間短縮は山手トンネルが与える最も大きな効果に違いない。

トンネルの上：山手通り


トンネルの上：山手通り（煙突のようなものは高さが45メートルの換気塔であり、トンネルへの給気とトンネルから処理された排気ガスの排出）


大橋JCT：東名、渋谷への分岐


大橋JCT：西新宿方面のトンネルから上がってくる

国際スポーツ競技における日本競争力の強化

今朝、桜井充参議員が参議院予算委員会で今後国際スポーツ競技会においてチームジャパンの強化に関する鳩山政府の財政支援について、鳩山首相と川端文部科学大臣との質疑応答を聞いた。チームジャパンはバンクーバーオリンピックでメダル５つしか獲得できなかった。それは隣の韓国や中国、そしてアメリカ、イギリス、ドイツ等の他の先進国のパフォーマンスと比べられない結果であった。

メディア報道でもあったように、桜井充参議員はチームジャパンのメダル獲得数は期待より遥かに低かった原因は国の財政支援が少なかったからであると指摘していた。ドイツ、アメリカ、イギリス、中国や韓国はバンクーバーオリンピックのために選手の強化費用はそれぞれ274億円、165億円、120億円、120億円、110億円にあったのに対して、チームジャパンが受けた公的支援は約27億円であった。こうして比較すれば、メダルの獲得数は公的支援額の大きさに比例していることが明らかである。それが故に、今後国際スポーツ競技に参加する日本選手の競争力を高めさせるために公的資金の導入額は大きくしなければならないというロジックが成立し、それを反対する人はいないのであろう。

確かにチームジャパンの国際競技において競争力を向上させるために政府の財政支援が不可欠であるが、そればかりではない。財政支援の他に民間企業や個人のスポンサーシップも極めて重要であるのも異論はない。しかしながら、もう少し創意的な取り組みを検討する必要があるように思う。

例えば、政府、民間企業や個人のスポンサーシップを超えて、長期的かつ持続的に日本の各地において地域に根ざすスポーツ選手の育成・強化を取り組むモデルの導入が考えられる。それに近い形はJリーグモデルであるが、それが殆どサッカーに限定している。つまり、地域に根ざすプロスポーツクラブを確立し、国際競技の種目を幅広くスポーツ選手の育成と強化、ひいては国際的に高い競争力を持つスポーツ選手を絶えず育てていく仕組みを展開していくことである。そのうえに、公的・民間・私的スポンサーシップを取り付ける。また、このような仕組みは実に地域の活性化にも繋がるという一石二鳥の効果がある。

分かり易い例はスペインのバルセロナスポーツクラブである。当クラブはサッカーのみならず、当地域の住民の支援を受けてレベル高い様々な競技の選手を抱えている。

冬季五輪と日本メディアの報道

日本メディアはバンクーバーの冬季オリンピックに参加している日本の選手のメダル獲得に対して大きな期待を持っているようである。23日現在日本勢が取れたメダル数は３つであり（1銀、2銅）、それが日本放送界の予想と期待からかなり少ないと思われる。それは多くの日本選手の実力以下という予想に反した結果よりも、元々日本勢の実力はかなりの種目において決勝ラウンドに進む実力を持ちながらも、メダル獲得に至るパワーが不足していると解した方が正しい。

こうした現実は日本選手が最も知っているはずなのに、日本メディアは大会の前、そして大会中に日本選手の実力を大きく膨らませながら、メダル獲得の期待を大きく煽らせ結果、選手のパフォーマンスに対して国民が失望している。しかし、全ての選手は全力を尽し、メダルを獲得するに至らなくても、競技界の最高級であるオリンピックに出場できたことに満足しているに違いない。それは素晴らしいスポーツ精神であると思う。

こういう姿勢はメディア界にとってはニュースの価値がなく、むしろ選手の実力を遥かに超えた幻想を作り上げ、読者や視聴者を囲んでニュースの価値を煽り、メディアの役割、報道の客観性や選手のスポーツマンシップ等は二の次である。

謂わば、「犬は人を噛んだ」に関してはニュース価値がなく、「人は犬を噛んだ」というのはニュース価値である。

日本財界首脳選出

日本経済団体連合会（通称、経団連）は次期会長を米倉弘昌住友化学会長に内定した。御手洗高士夫現経団連会長は、米倉次期会長が選ばれたのが「経済のグローバル化に適応できる人物」を最大な理由の一つであると強調していた。日本財界の首相と言われているこのポストは選ばれた人の過去と現在の実績で評価され、それを下に向こう2年間ないし4年間（一期２年または２期４年）にわたって日本財界の取り組むべき課題、ならびにそれに伴う斬新的なリーダーシップが期待されるのである。

しかし、今日日本経済や財界が直面している問題は、言うまでもなく10年以上のタイムスパンで、ますます少子・高齢化という国内の厳しい制約条件の下で、いかに変貌していくか、そしてその社会・経済・政治構造がグローバル的な競争において勝ち抜くかである。そうした環境に於かれているにもかかわらず、経団連は依然として高齢者である経済会の代表を会長として選び、そしてそのポストを支えるメンバー（理事や評議員）もまた高齢者である、という経済界の高齢者指導集団を固執している。

リーダーの評価は過去と現在の実績が大切であるが、未来に向けていかにリードしていくかという能力や素質がより重要であるとしばしばリーダーシップの研究者に指摘されている。従って、経団連の指導者選出方法を改めなければならいのではないかと思う。つまり、伝統や慣習である「年功序列」という発想ではなく、未来の構築、そしてその理想にむけて実現させうる若手指導者を中心にした体制に変革すべきである。

過去、現在、未来という３つの区切りで考えると、過去と現在の実績の観点で経験豊富な年寄りが後見人に添え、彼らの助言のもとに、未来の挑戦に活力、柔軟性、発想力などの視点が富む若手経済人をリーダーにする体制を求めたいのである。

「没有」

中国語の「没有」を日本語に直訳すれば「ありません」という意味である。しかし、中国ではかならずしもその意味として使われていないようです。

約20年前に、北京等の中国の大都市で夕食を取ろうとしていた時に、多くのレストランでメニューの８割、特に美味しそうなものについて「没有」とばかり言われていた。当時は計画経済だからモノ不足だと思いこんでいた。しかし、実態はそうではなく、レストランの従業員は早めに店を閉めたく、客の注文通りに営業をしたら帰宅も遅くなり、それを避けるために「没有」という台詞で対応したのである。今日、日本よりも市場経済システムが浸透している中国では「没有」という精神は未だ残っている。

先日、２年ぶりに上海を訪れた機会に、東京の紀伊国屋とか丸善とか相当する「書城」という書店で、中国の「気功」を解説する本を購入しようと思い、案内カウンターの店員に尋ねたら、「没有」と言われました。そうか、「書城」にはこういう類の書籍を取り扱っていないのだと納得して諦めざるを得ませんでした。しかし、案内カウンターからちょっと離れた本棚に「太極拳」とか「少林拳法」とかの本が並んでいるのを見かけ、確認したところ、「気功」類の本が何冊もあった。解説が分かりやすいものを１冊購入した。

今回の経験を通じて分かったのは、この「書城」では「気功」の本が「没有」ではなく、案内係りの店員が「いま、こちらが同僚と喋っているから、邪魔だ」の言う代わりに「没有」という表現を用い、客を追い払ったことである。

税金の無駄使いの例

近年首都圏への相互乗り入れる地下鉄や私鉄の運行数が増加している。8月27日読売新聞の夕刊によれば、東京近郊の相互乗り入れ路線の総延長は90年現在の535キロであったのに対し、08年現在は922キロとなり、1.7倍増となった。２３区に在住されている人々は、通勤時間台に頻発している乗り入れの電車の遅れによって迷惑を蒙っているに違いない。筆者も頻繁に影響を受けている。

鉄道相互乗り入れは通勤・通学圏が拡大される一方、利便さが増しているのは紛れない事実である。しかし、首都圏に住んでいる人々にとっては相互乗り入れによって頻繁に電車が遅れたり、それによってダイヤが乱れたりして迷惑であると思う利用者が決して少ない。経済学はこういう状況を「外部性」という。標準的な教科書は「外部性」が生じた場合にそれを正すために政府の介入が欠かせないと教える。

こうした標準的な経済学の教えをもとに、国土交通省は、東京近郊から首都圏への鉄道乗り入れに伴う電車の遅れ対策の一つとして、地下鉄の「引き込み線」に関する調査や情報提供などへソフト面の支援を行うための費用を2010年度予算の概算請求に計上したのである（8月27日読売新聞の夕刊）。さらに、国土交通省はそれらの可能性を調べたうえ、具体的な対応をするかどうかという決定を各鉄道会社に委ね、政府の対応はあくまでも鉄道会社の投資を促す方針であると強調している。

国土交通省の主張は予想される結果であるならば、最初からそうした調査を行わないで、別の方策を検討した方が国民の税金を無駄にならないと指摘したい。お役人は如何に自らの管轄において予算を多く取るかを考え、そのために経済学などの諸理論を用いて「科学的」に正当性を確保することが常である。その結果、無駄使いが増大し、そのツケを国民に回すこととなる。いつまでも国民の血税で財政赤字を埋めることになる。今回の国土交通省が取り組もうとする対策は典型的な税金の無駄使いである。

時差通勤による混雑緩和が一つの対応である。但し、これまでの時差通勤を利用者の自発な行動に委ねるというやり方ではなく、通勤時間にしたがって運賃の差別化（例えば、朝７～９時、夕方５～７時の間に運賃の5割増し）を図ると同時に、ラッシュ時の電車運転間隔を最低間隔5分間に規制し、それによって相互乗り入れの遅れを解消するというアプローチを取る。そうすれば、利用者の便益をマイナス外部性による社会コストと同じくすることによって問題が解決される。

プノンペンにおけるパレート法則の再現

パレート法則とは、イタリアの経済学者ヴィルフレド・パレートが社会現象を観察して発見した「80：20」という法則である。つまり、この法則によれば世の中において80％の結果は20％の原因によってもたらされている。ある社会または国を例にすると、パレート法則は20％の人口が80％の富を支配すると説明する。

実際に、世銀のデータベースから2004年現在一人あたり国民所得（米ドルで購買力平価、PPP）の統計を使ってジニ係数の計算とローレンツ曲線を描いてみると、前者は0.793であり、後者は10％の人口が9割の世界所得を支配しているという極めて不平等な事実を確認することができる。パレート法則は厳密に「80：20」の比例であることを意味するのではなく、「90：10」という比率もありうることを注意すべきである。

8月中旬にプノンペンを訪れ、知り合いの事務所から眺められる写真は実にカンボジアのある銀行家の豪邸であるとのこと。2007年現在同国の一人当たりGDPは約600ドルであり、単純に考えれば、約1,400万人の国民は1日2ドル以下で生活しているという状況にあるにもかかわらず、一人の銀行家の豪邸はなんと何処かの国の首相官邸の豪大さであると感じる。カンボジアはここ数年10％位の実質GDP成長率を遂げ、その配当は一般市民に行き渡るよりも、パレート法則が予測している通り、富は1割か2割の人々に支配されているとこの写真が物語っている。

卒業生との飲み会

8月7日に久しぶりに2006年の春に卒業したゼミ生の一部と暑気払いの飲み会をした。当期のゼミ生は10名だったと記憶しており、全員がそれぞれの職場で活躍されている模様である。何よりだ。今回の集まりはあいにく４名の参加であった。

写真の左奥の人物はいまや車いすテニスの世界ランキング１位の国枝慎吾氏である。今年の春からプロテニスプレヤーに転身し、国際試合で各地に飛び回り、大事なスポンサー獲得、そして車いすテニス等の啓蒙活動とかで忙しい日々を送っているようである。8月26日の日経新聞によれば、国枝氏はユニクロ社と所属契約を結んだという。ますますのご発展とご健闘を期待する。

"Rethinking Growth Policies in the Developing World:" Comments 8

By Lourdes Agnes K. Roncesvalles (Philippines)

Introduction

The article seeks to answer the question “what should developing countries do to increase their growth rates and speed up the rates at which their citizens converge to the level of material well-being obtained in today’s advanced nations?”

It discusses the Washington Consensus as an instrument, which Washington including the International Monetary Fund, among others, urged developing countries to adopt during the 1980’s as against the heterodox policies most developing Asian countries implemented. Further, it continues to show that the Washington Consensus may still be applied in developing policies if certain adjustments as explained through its augmented version are also achieved.

In the end, the author recognizes that there is no “one-size fits all” solution to economic development and thus presents a diagnostic approach to growth strategies wherein main bottlenecks to development are isolated and analyzed to determine strategic solutions. This methodology allows a government to address its weak points while giving it enough flexibility to address the latter strategically and within its capacities.

Comments

Washington Consensus vs. Heterodox Policies

The three main ideas around the Washington Consensus are macroeconomic discipline, a market economy, and openness to the world.[i] These concepts are probably derived from the neoclassical economic point of view. On the other hand, heterodox policies, adopted in most Asian countries, took on a more developmental strategy wherein their individual governments had more control over implementation of strategies.

Based on the Latin American cases, which adopted the Washington Consensus as an ideology and their failures vis-à-vis the apparent gains of the Asian countries that have “marched to their own drum,” it can be concluded that a single formula to development is not a solution to achieving development.

Boxing up such policies and assuming they could induce growth in all developing countries is therefore not a wise presumption. Factors such as political, social, cultural, as well as investor confidence, growth drivers, etc. of each country greatly affect development. Thus adoption of a certain policy that may have been effective for one country may not have the same results in another.

Saying that “no one size fits all” is a cliché. However, there is also an obvious truth to it. Strategies should be tailor fit to the implementers’ capacities as well as the society’s ability to adhere to the policies.

The recommended diagnostic approach would indeed allow developing countries determine strategies applicable to them. However, a vital step is not discussed in this strategy. This step refers to the determination of the main bottleneck. Many developing countries are faced with multiple impediments to growth. And for them to break out from this level, they have to address all of these within the limits of their financial, technical and physical capacities. As such, a prioritization process should be included as well.

Significance to the Philippine Case

The Philippines unlike its Asian counterparts has basically followed the Washington Consensus path since the 1980’s. Thus, I would like to highlight the effects of the three core recommendations of the Washington Consensus, i.e., to stabilize, liberalize and privatize on the country’s economy within the last two decades.

Stabilization

1) Government spending was reduced, as the focus was to balance the budget and pay for outstanding foreign debt this resulted in poor allocation of investments. As opposed to neighboring Asian countries where the government has been actively participating and investing in capital development, the Philippine government has not kept at pace in such investments.

Liberalization

1) From import substitution to export oriented – While foreign direct investments increased and improvements in some sectors such as the electronics industry, they overall process did not deliver the expected benefits to the manufacturing sector. This failure led to high unemployment rates as the manufacturing sector could not absorb the continuously growing labor market. As a result, employment generally shifted to the services sector. Productivity in the manufacturing sector thus remained low.

2) Agriculture – Unlike Japan, which is strongly protecting its agriculture sector, liberalization created problems for the agriculture sector. Farmers were, and still are, finding it hard to compete with imported products such as rice from Thailand and Vietnam due to a few main reasons. First is the high transportation costs within the country. Due to inefficiencies of the government in developing much needed railway systems, for example, that can cut transportation time and cost of products from both northern and southern regions has been slow. Furthermore, the agrarian reform act, which was intended to alleviate rural farmers from poverty, resulted in problems of economies of scale which further constrained farmers from competing with imported agricultural products.

Privatization

1) Privatization has been pursued since the political crisis of 1986. Since then the government has engaged in various privatization efforts, including the power, water supply and transportation sectors. However, initial attempts to privatize were maligned with various cases of corruption. At the same time, the government itself was not adapt to private sector mind sets thus would create misunderstandings during contract negotiations. This lack of capacity also resulted in unfair contractual obligations for the government, as in the case of the Metro Rail Transit Line 3 Project, giving the general public a negative perception of public-private partnerships. Despite this, the government continued its privatization policy in transportation, watery supply, power, and communications. Metro Manila’s water supply and sewerage system can now be said to have improved due to the privatization of the Metropolitan Waterworks and Sewerage System. The North Luzon Expressway and the Subic-Clark Tarlac Expressways are also examples of good privatization projects.

Conclusion

The Washington Consensus, in my opinion, is a generalization based on the western values and experience in development hinged on their belief in democracy. Furthermore it can be related to the neoclassical economic thinking wherein markets are left to develop on their own, thus promotes liberalization and privatization.

However, what the economists then forgot to consider is the value set of other developing countries, especially that of Asia. Heterodox policies are only “heterodoxical” from the western perspective. This may be what is normal or required for development in Asia given our nature or culture.

Furthermore, in light of the already globalized nature of trade, absolute liberalization may not be recommended as internal/local industries may not be able to catch up with the already competitive market thus instead of expanding could eventually die out as what happened in the Philippine case. It was therefore wise of both China and Vietnam to adopt partial liberalization. In the end, they were both able to participate in the world market as well as protect some of their industries.

As for the Philippine case, adopting the Washington Consensus had both positive and negative effects, albeit, in my opinion, more negative. By trying to stabilize the economy, the government was not able to utilize its capital to spur investments and, thus failed stimulate the economy especially during crises.

Liberalization, on the other hand, led to the Philippines dependence on both import and foreign capital, which led to fluctuations of growth and recession over the years.

Among the three recommendations, only privatization has thus far offered development in the sectors of transportation, water supply, telecommunications and power, if you do not consider the amount of “corruption” that came along with it.

At this point, the Philippines is still facing many obstacles to development. Economists, developers and planners alike have, in one way or another, utilized the diagnostics approach, however, the difficulty lies in determining which of these problems is to be prioritized. Given the very democratic nature of Philippine Government decision-making, policies end up as wish lists that try to address everything at the same time. In the end, targets are not achieved, as manpower and budget would always come up short of the requirements.

References:

1. The Washington Consensus as Policy Prescription for Development; John Williamson; Institute for International Economics; 2004.

2. Did the Washington Consensus Fail?, John Williamson, Peterson Institute for International Economics; Outline of speech at the Center for Strategic & International Studies; Washington, DC; 06 November 2002.

3. “External Liberalization, Growth and Distribution in the Philippines;” Joseph Y. Lim and Carlos C. Bautista; A paper for the international conference on “External Liberalization, Growth, Development and Social Policy;” Hanoi, Vietnam; 18 to 20 January 2002.

4. In the Shadow of Debt: The Sad but True Tale behind a Quarter Century of Stagnation; Walden Bello.

5. An Assessment of the Philippine Economy; Germelino M. Bautista; 2003.

6. Chapter 15: Privatization in the Philippines; Lauro A. Ortile; Challenges and Opportunities in Energy.

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[i] Did the Washington Consensus Fail?; John Williamson, Peterson Institute for International Economics; Outline of speech at the Center for Strategic & International Studies; Washington, DC; 06 November 2002

"Rethinking Growth Policies in the Developing World:" Comments 7

By Shah Mohammad Mahboob (Bangladesh)

Introduction

The article by Dani Rodrik has tried to focus upon the weaknesses of “one for all” reform strategies of the IFIs and the arguments can fairly be supported by a range of data. But, the developing countries “poor ability to decide and choose” can also be a major factor for the failure of reforms.

Historically, Bangladesh had been moderately submissive to the so called “prescriptions” from the IFIs, especially the World Bank and IMF. The country has taken a series of reforms and the results have not been very prosperous so far. It seems that, it was more of poor adoption of reforms than the features of reforms themselves, to make the situation worse.

Economic Policy Reforms

During the 1990s, Bangladesh’s structural adjustments started with privatization of public enterprises and opening of its markets through trade liberalization. Although the privatized enterprises started to make profit under private ownership at no time, they also created unemployment in the name of ‘right sizing’. Trade liberalization increased international trading, but imports surpassed exports by many times. This has given a rise in numbers of trading houses instead of manufacturers to eat out foreign reserves and also could not create employments. The domestic industries were kept insecure against import by withdrawing required tariff protection. Very shortly, government lost control of the prices of the commodities and an irregular trend of price hikes gave result to price inflation. These indicate the weaknesses of the policy makers in ‘customizing’ and taking right decisions. A recent survey has shown that, around 70% senior government officials have difficulties in understanding donor’s documents and 80.33% of them believe that lack of political commitment is giving the donors superiority over the government.

Development Policy Reforms

During 2000 onwards, Bangladesh started to prepare its “Poverty Reduction Strategy Paper (PRSP)” by replacing traditional “Five Year Plans” in response to one of the Augmented Washington Consensus. Although the donors in the name of ‘Local Consultative Groups’ was in supporting role, it was mainly the local consultants who helped the government to prepare the PRSP. Later it came to realization that, most of the government officers could not understand the document’s function, private sector mostly kept their silence and the common people never knew about it. As the ultimate result the document was hardly utilized and the country had been practically running without any plans. The case might be similar for many developing countries. It was a big blow that may require many years to recover. Including the PRSP into the traditional Five Year Plan could save the face. But the policy makers are yet to take any decision regarding this.

Importance of Specialization

China and India have followed heterodoxy ideologies for their taking off. Both the countries are well known for their scrutiny and general reluctance to donors. Sincere analysis, thinking and leadership from the government supported this idea. In addition, both the countries had some creative “specialization” which helped their stances. China has specialized on cost cutting and thereby increasing export whereas keeping a control over import. On the other hand, India had a ‘Made in India’ campaign among the citizens to prefer domestic products over the imported one. Being the second biggest market in the world, their production easily achieved the required selling target. Their customization of reforms helped their purposes. So, the developing countries really have to think of some specialization to boost the country power.

Conclusion

Even though IFIs were partly wrong in their drafting one unique plan for all countries, it was also the developing country’s primary responsibility to check the adaptability of the reforms to their situation and control the degree of implementation. If the countries cannot develop their own decision making ability, the ‘removing the bottleneck’ procedure, as was suggested by the author may as well be unsuccessful for them. They really have to learn to choose the best for them from a complex mesh of options.

"Rethinking Growth Policies in the Developing World:" Comments 6

By Farrah Shameen binti Mohamad Ashray (Malaysia)

I. Commentary

The rate of development of each country definitely lies in the growth policies adopted. How these policies are adopted and what are the reasons behind choosing each policy has a lot to do with the interest and aim of the nation as well as the regional trends. Although nations rely on each other because of trade activities, but they are not permanent friends as nations have different interests and aims which sometimes are conflicting.

The obsession to have super rapid growth has been the trend in developing countries. Gradualism is not it. At the same time, economic super powers through international organizations led by them are also propagating globalization, free-market and deregulation, indicating to the developing countries, since having a reliance on the foreign investment and capital, must govern and mold their countries in the desirable manner of the investors.

The question is who determines the best growth policy now? Who determines what is orthodox and what is heterodox? Are the growth policies propagated by the international communities, which are usually the already developed nations the best recipe for the developing nations? In my opinion, these are the issues brought forward by the author, Dani Rodrik. After discussing the basic principles of economic policies that all successful nations adhered to such as sound monetary policy, integration with the world economy, protection of intellectual property, social and political stability amongst others, he has highlighted that there are instances in certain countries which are not so. There are countries that have succeeded to attract investors and achieve considerable healthy economic growth without adhering to these set of principles such as China and Vietnam. The reluctant reformers and pro-socialist countries have also achieved growth which also proved that economic growth does not necessarily have to be in a democratic environment. He thereby concluded that the consensus on these principles through the Original Washington Consensus (OWC), and which was later enhanced in the Augmented Washington Consensus (AWC) are not necessarily the best medicine for all. The weaknesses highlighted by the author in the AWC such as being too ambitious to be achieved, not realistic enough compared to the institutional and human resource capacity in developing countries, are real and eminent in my point of view.

Then a realization that there is a need to avoid one-size –fits-all strategies and put focus on country-specific strategies. It is also admitted that the World Bank and other International Financial Institutions (IFI) recognize these issues but have yet to be confronted it seriously and are still positively proceeding with the current programs. Finding out why it has not been addressed seriously by these institutions would be interesting.

The Diagnostic Approach which is favored by the author is to match policy priorities with the diagnostic signals. It is a strategy to first figure out the bottleneck or the constraint of growth and then finding out what are the causes/roots of the particular constraint and connects it to the problem. At the same time, decide what the most needed thing/action to take is. It would also be easier to rule list out the strength in the beginning so that it could be used rather than reinventing the wheel or to avoid creating growth policies which do not take advantage of strong aspects/characteristics of a situation or nation. This approach shows that individualism and specifics are important in creating the skill to identify problems objectively and the skill in solving problems without relying fully on packaged remedies like the Washington Consensus.

II. The Case of Malaysia : The Industrial Policy

What kind of growth policies have Malaysia adopted to achieve growth over the years? How did Malaysia choose its growth policies and what are the reasons behind it. I would like to focus only during the early days of Malaysia, when huge transformations/policies of high impact to achieve several aims were made, which is the Industrial Policy.

Malaysia, in my opinion started from an agrarian state with an economy depending at about 25% share of agriculture in its GDP in 1960s but moved to set it priorities to become an industrialized state because of the constant identification of economic progress with industrialization, looking at the Industrial Revolution in the 18th century. This is probably the only economic revolution to date for the Third World countries to imitate and which could give a spill effect so large that it could be a fast track growth policy. It was probably the only way for Malaysia which was not satisfied with status quo and wanted a leap frog in economic growth. This strong orientation to be industrialized could also be seen when the 4th Prime Minister, Mahathir Mohamad announced in 1982 that Malaysia wanted to learn from the industrialized eastern countries, Japan, South Korea and Taiwan, a policy later called the Look East Policy, instead of from the western bloc. The other reason was Japan as the second largest trading partner to Malaysia at that time has emerged as the second largest economy in the world. Industrialization was also to diversify the economy because focused economy especially on agriculture, minerals and commodities is believed to be dangerous for the economic stability in the future.

Malaysia even before independence in 1957 has already traded actively mostly by exporting commodities, supplying raw materials for manufacturing industry of Britain and becoming the market for those manufactured goods. After the Investment Incentives Act was passed in 1968 in the midst of high unemployment and social instability, the law boosted private investment, local and foreign as well as export oriented industry by providing various incentives, exemptions on tax and tariff protection . It also provided labour intensive industries tax relief based on number of employees. At this time, government regulations played an important role in the pattern of employment as well as the growth of the industries. Export oriented industries mushroom so rapidly that in the early 1980s, that some industry like the construction and plantations were having shortage of man power as many have turned to factories and industries for employment. Government of Malaysia launched the Industrial Master Plan (IMP) in 1986 to lay the foundation for the manufacturing sector to be leading growth sector in the economy. At this point of time, the unemployment rate was doing downhill; the world recession starting in 1983 causing commodities prices to fall had resulted in massive retrenchment in many industries especially invested by foreign capital. To date, Malaysia has three IMPs namely the first: IMP1 (1986-1995), second IMP2 (1996-2005), and third, IMP3 (2006-2020).

Why was Industrialization chosen to boost economic growth even now? In reference to the Washington Consensus, it can be seen that the Malaysian Government did follow the rules of good behaviour such as openness to direct foreign investment, deregulation, tax reform, integration with world economy etc. The difference between Malaysia and some other countries like the Indonesia and Philippines is that Malaysia still has it freedom from the IMF and World Bank to make policies and regulations. Thus probably the pressure to follow these principles did not come out of obligation to these IFIs but came out of careful policy considerations and of the need to resolve the issues of financial weaknesses and inefficient banking system as well as to insulate the country from rapid capital flight. In other words, wanting to prove that Malaysia has strong and sound corporate governance. However, how did Malaysia come to that conclusion that industrialization is the best? Although it can be seen that Malaysia tried to mimic the success of the Industrial Revolution, there are many country specific characteristics which were adopted to tailor make the policy into the domestic environment. In the beginning of industrialization also, it can be seen that gradualism and government control was practiced very strictly. Gradualism was practiced in the beginning as the Government was cautious of losing control and being taken advantage of by investors whom are far more experienced. Some regulations made by the government because of national interests and economic distribution motives in mind have been largely criticized. Lastly, the industrial policy adaptation has a futuristic dimension that is to prepare the country to be competitive in the world and not only to address problems at the particular time.

3. Conclusion

In the case of Malaysia, all the first-order principles of economic policy are in existence. Malaysia wanted to grow very fast and needed to grow fast. For that the government has chosen industrialization as the key sector of economic growth through encouraging spill effects of industrialization which are:

1. Urbanization and migration;
2. the development of small and medium industries and enterprises (creating supply linkages);
3. increase of job opportunities through encouragement of labour intensive industries ( which leads into increase of income per capita);
4. Encouraging Science and Technology in education and job/skill training (creating a good/quality pool of labour);
5. Poverty eradication and income distribution (increase quality of life);
6. Foreign investment and capital increases and etc.

To my opinion, it is seen like Malaysia did diagnose the bottlenecks and constraints in the growth of the economy before bravely pointing to industrialization as the key to economic growth, using the growth it generates to cover many bases at one time. The issue of misdiagnosed might be argued by some saying that the IMP has failed in many ways, but the Industrialization as a whole is a success although a handful business projects under its flagship such as HICOM and Perwaja Steel has failed to sustained due to many contested reasons.

"Rethinking Growth Policies in the Developing World:" Comments 5

By Paul J Amani (Tanzania)

1.0 Introduction

For decades, many poor countries of the world including Tanzania implemented a series of development reform policies mostly conditioned by International Financial Institutions (IMF and WB), with the aim of achieving economic growth and alleviate poverty. The emphasis of these policies changed over time depending on what economists believed to be the best course of action for the country(s) to achieve high and sustainable economic growth. Notwithstanding of all the efforts, Sub-Sahara African countries (including Tanzania) remains the poorest in the world. This paper therefore, discusses the impact of the growth policies by citing Tanzania’s experience. A major reference is made on Dan Roderick’s lecture at Havard University- “Rethinking Growth Policies in the Developing World”, 2004.

2.0 Summary of Rordick’s Lecture

In my understanding, I think the author is concerned with ongoing poor economic situation among poor countries particularly those in Sub-Saharan Africa despite decades of tying reforms policies in the pursuit of social, economic and political development. Without doubt, the founding pillar of these policies is the orthodox development thinking and theories; “stabilize, liberalize and privatize” of the advanced countries proposed as a cure for the economic destitution of the poor countries. Of all reforms trade liberalization has been pointed as the most striking policy as it required the developing countries to “eliminate restrictions on imported goods and services”. Despite the fact that many countries adopted the policies, only few succeeded. China, Vietnam and India for example, become successful through unorthodox means-by grafting market system on top of a planned system, underplayed private property rights, and opened trade to the world- in a highly protected trade regime with favors on special economic zones. He insists the importance of countries to protect their macro-economic activities, cautiously integrate into world trade, ensure effective property rights and maintain social cohesion, solidarity and political stability.

3.0 Tanzanias economic reform policy experience:

Soon after attained its independence in 1961, Tanzania nullified the role of market in the economy and backed socialistic political system with the state controlling everything. Towards the end 1970s and early 1980s the country suffered extensive economic decline and heavy financial crisis of which the major cause was said to be government’s poor economic policies and structural weaknesses (Wangwe et al, 1998).
To solve the problem, Tanzanian government approached IMF and the World Bank to seek loans and extend repayment period of both principal and interest. In return the country was compelled first to implement Structural Adjustment Program with the aim of stabilizing external and internal balance of payment, reduce fiscal deficits and promote export oriented production through devaluation, producer price changes, trade liberalization, privatization, and legal reform (Gibbon, 1993; 11). Other measures would include creation of conducive environment for foreign environment, abolish price controls and retrenchment. President Nyerere, rejected the program calling it “economic suicide” to the country. However, in 1986 there was no option, and the country opened the doors and signed agreement with IMF and World Bank to implement the Economic Recovery Program(s).

It is over two and a half decades since the economic recovery programs were implemented in Tanzania; the country’s economic situation did not improve much. While urban poverty is said to be decreasing, a great problem remains in the rural areas. The largest household survey ever conducted in Tanzania in 2000/2001, number of people living below basic need poverty line increased to 11.4million compared with 9.5million reported in 1990/1. Last years’ projections show the number has increased. As well privatization of public companies has substantially increased the unemployment rate, lowered wages, and increased the cost of goods and services and reduced access to the poor population in the country. For example, though 700,000 new job seekers join the labor market in Tanzania every year, only about 30,000 of them get employment. Today, privatization has increased the prices of fertilizer and other inputs, and reduced access to credit. While large scale farmers and private traders have benefited from liberalization and privatization, small farmers, who constitute the majority of Tanzania's population, have not enjoyed such benefits. Majority of people in the country have increasingly facing difficulties in accessing essential services, including water and sewerage, adequate shelter, electricity, education, health care and other basic services.

We cannot deny that lack of sound state backed policies especially on trade has brought some unusual effect to Tanzania. Internal productions and market of local goods and services has been suppressed due to large importation of cheap products from the developed countries. On the other side, it is important to ask ourselves, what could have been the country`s economic situation without the economic recovery programs? The country enjoys a higher degree of macroeconomic stability today as compared to the situation before 1986. Growth Domestic Product (GDP) growth per annum averaged 4.2 % in 1996, 6.7 in 2006 (http://www.imf.org/external/index.htm ) reversing the declined per capita income in the decade before. Again, despite setback in microeconomic policy during the first half of the 1990s the government achieved macroeconomic stability in the late 1990s. For example, inflation was reduced from about 30% in 1980 and early 1990 to 4.6% in 2002 when the fiscal imbalances were curbed by prudent fiscal management reducing government deficit below 13 percent of GDP. Acceleration of structural and institutional reforms as well as creation of new institutions led to improvement in the investment climate, increased foreign direct investment flow and job creation. The financial sector has been substantially transformed into highly diversified, competitive, and vibrant one. Whereas the financial sector was dominated by one publicly owned commercial bank and other few small financial units by the end of 1990’s, currently the sector comprises 22 private commercial banks of which 13 are foreign owned, 12 nonbank financial institutions, pension funds, 14 insurance companies, and more than 63 foreign exchange bureaus.

The balance of payments improved significantly, reflecting large donor inflow and increased export earnings from nontraditional exports mainly gold and diamond, gemstone and fish products. Overall gross foreign reserves rose from the equivalent of 1.6 months of export in 1995 to 6 months of export by December 2002. Tanzania is currently benefiting debt relief enhanced by Heavy Indebted Poor Countries (HIPC) initiatives which has have paved the way for additional donor inflow and increased budget expenditure allocation to social and other priority sectors such as roads, judiciary and HIV/AIDS.

Conclusion

For better and quick results, I think: One the economic policies should be changed to reflect the Tanzanian environment. Currently, they are highly conventional in the sense that they focused and reflect the economic growth of their countries of origin and hence difficult to be applied in a different environment. Two, the poor and inefficient physical and financial infrastructure in the country should be reinstate. Third, restrictions in forms of high tariffs should be imposed on the imported goods in order to promote domestic production of manufactured goods and hence reduce inflation. And fourth, poor, incompetent and corrupt officials in both public and private sectors who have been not only are incapable of formulating and implementing development projects should be replaced.

References
Dan Rodrick, “Rethinking Growth Policies in Developing World” , Lecture given at Havard University in October, 2004.

Ferreira, M. L. 1996. “Poverty and Inequality during Structural Adjustment in Rural Tanzania;” Policy Research Working Paper 1641, World Bank, Washington, D.C

Gibbon, P., 1993. Social Change and Economic Reform in Africa, Scandinavian Institute of African Studies. Uppsala, Sweden

Samwel W, 1998, "The Impact of Structural Adjustment Program in Tanzania," A Paper Presented in Ethiopia.

http://www.dagliano.unimi.it/media/finalEnglishprograme.pdf

http://www.povertymonitoring.go.tz/documents/HBS_2000_contents_of_summary.pdf

"Rethinking Growth Policies in the Developing World:" Comments 4

By Le Hieu Trung (Vietnam)

For more than 15 years, the consensus of opinion on which economic policies could boost growth in developing countries is presented. At that time, there was several concepts and theories of reform policies for developing countries. As far as the concept of reform policies is concerned, it was divided into 2 different groups, one of which was the group of countries following broadly similar strategies. This group was known as sequential reform, which was opposed to simultaneous reform. “Big bang”, the name of this other group of countries, was non-dogmatic in their approach to economic reform. Those countries were pragmatic, experimental and proceeded in a flexible and instrumentalist way. Professor Dani Rodrik of F. Kennedy School of Government, Harvard University, has written many articles and books on the areas of international economics, economic development, and political economy. In “Rethinking Growth Policies in the Developing countries”, Professor Rodrik wanted to evaluate the reason explaining the failure of some developing countries related to reform, while some other countries managed to reform well and achieved remarkable results. He stood on the idea of Washington Consensus that begun from some countries in North American, especially in Latin America and also from some countries in Asian and African, and compared with the other group to find out the more efficiency methodologies for reform policies.

Firstly, as mentioned in the article, nowadays, the Washington Consensus becomes very popular and is used constantly in government’s debated related to trade and development. It is often defined as synonymous with neo-liberalism and globalization. This concept focused mainly on trade liberalization and tax reform, As far as trade liberalization is concerned, it is the liberalization of inflows in foreign direct investment, privatization, and the insurance of property right. As the author mentioned in his article, the consensus does not perform as expected. The Latin America has to face with the low perspective of economic growth and it’s started to reach an even lower level than the period before the presence of the consensus. In order to solve this puzzle, Professor Rodik found the case of some other countries, where it started as under-developed countries. However, those countries applied the heterodox policies and they saw a growth rapidly over the same period. China, India and Vietnam could be the example for this case, where it had a high and sustainable economic growth from 1980. This growth is explained in this article as due to the main characteristics of those countries’ policies, which are developing based on market-oriented but somehow had their own unorthodox ways. Taking Vietnam as an example for a deeper review, liberalization of foreign trade and investment has been an important part of Vietnamese reform. The trade system was highly restricted through the mid-1980s. Reform has included dismantling of non-tariff barriers and tariff reductions. So it becomes more difficult to measure the effectiveness of trade policy reform. However, it could be based on the one good indicator, which is the volume of trade in constant prices relative to PPP GDP. This ratio increased from 0.08 in 1989 to 0.27 in 1997. Nowadays, world trade is closely related to foreign investment. Vietnam also liberalized its policies toward foreign investment. Flows of FDI averaged more than 5% of GDP in the second half of the 1990s, up from zero in the 1980s.

Secondly, the key to success of the group countries, which are using their own method to reform, is maintaining a stability for their macro-economic and an integration in the world economy. However, they still need to keep a good protection for their domestic products against import. On the other hand, they have to enhance a deeper and wider cooperation with the world trade regime. Another important point is the provision of effective protection to investors in terms of property rights and contract enforcement. Furthermore, they have to maintain a social cohesion, solidarity and political stability. Moreover, other reason for a positive result as explained by the author is the general principles of economic policy. In some countries like China and Vietnam, their policies often don’t approach directly and aren’t made specifically so the result could still be changed and cannot be foreseen. It means that there wasn’t a perfect concept of policies. This flexibility in policies could bring a successful result to those countries. In the reverse, Latin America with too rigid policies cannot afford to develop reflection policies like China and Vietnam. This reason explained the lack of success on Latin America’s economic growth.

Thirdly, from his own evaluation on the trend of reform policies in developing countries, Professor Rodrik stated two concepts that provide guidance to developing countries for further development. One is Augmented Washington Consensus and the second one is Diagnostic Approach to Growth Strategies. According to the author, the first concept is almost failed and for the second concept, he could see some more opportunities to become successful. While Augmented Washington Consensus focused on the correction and reparation of the issues presented in the original policies, the Diagnostic Approach to Growth Strategies aimed to provide new ideas by identifying the major problem or the bottleneck in the economic sphere at any point in time, and to only focus on solving this bottleneck. The concentration on detail purpose, as opposed to the focus on many targets, could be seen as the main advantage of the second concept.

In conclusion, “Rethinking Growth Policies in the Developing Countries” provides a comprehensive review of reform policies‘s methodologies in the world during the last decade. Moreover, throughout his article, the author evaluates the reform models based on some main respects of both theories and realities. However, until now, I believe that the reform model in China and Vietnam remains inadequate. Economic based on market-oriented also has some imperfections, which need to be considered. In the other hand, a rapid increase on Globalization somehow forces China and Vietnam to take part more deeply and widely in the global economic. Consequently, there are some issues that they have to face when subsidy and protectionism factor are replaced by an equally business environment. Furthermore, as author mentioned, the Washington Consensus was collapsed because of the unaffected of the theory, rigid and uniform disciplines, and the completely globalization. On another hand, the application of reform policies depend mostly on each country’s situation, as Professor Rodrik assumes that the presence of a perfect model, which could apply for all countries, is impossible. Nowadays, it becomes difficult to foreseen the trend of global economic, thus, the economist forecast and the reform models become narrow. So, the answer to the question of the necessity or not to their focus and their actual situation.

"Rethinking Growth Policies in the Developing World:" Comments 3

By Magoti Suzanna Joachim (Tanzania)

1) INTRODUCTION

The article presents an account of different approaches on how developing countries can increase their growth rates and speed up the rate at which their citizens converge to the level of material well-being. The Author is also trying to provide an analysis on distinct approaches and reform by various economists of the 1980 and 1990 over the Economic Growth. Dan Rodrik also made an effort to offer some challenges, comparative analysis of The Augmented Washington Consensus Approach and Diagnosis Approaches to Growth Strategies and his own suggestion on what ca developing Countries do to speed up their Economic Growth.

2) SUMMARY OF THE ARTLCLE

a) The concept of Policy Reforms for Economic Growth gained momentum at the end of 1980-1990 by preaching the triple commandments which are stabilize, liberalize and privatize. This time marked the overwhelming of reforms around the World from Latin America to Sub-Sahara Africa Continent and in many places around Asia. In a relative short period, most developing countries unilaterally eliminated quantitative restrictions on imports, lowered tariff barriers and reduce the dispersion of tariff rates. According to this Article, It shows that despite of the adoption of these radical changes in policies, there was no analogous radical improvement in economic performance. Economic growth in those Countries that adopted the “stabilize, liberalize and privative” agenda has turned out to be low not only in absolute terms but also relative to other countries that were reluctant reformer and relative to the reforming countries’ own historical experience. Fiscal discipline, privatization and openness to trade have produced an economic performance that does not even begin to match the performance under import substitution.

b) The author is trying to provide his critical observation on why the reforms of the 1980s and 1990s have produced weak return in many developing countries by outlining two Approaches one is The Augmented Washington Consensus and two is A Diagnosis Approach to growth. According to this Article The Augmented Washington Consensus is impracticable because it does not take into account the amount of administrative capacity, human resource and political capital needed to complete the institution reform agenda, governments are overwhelmed with the range of things that need to be completed, copies of western legislation or “best practice” codes are adopted without much consideration of their suitability and adaptability and too little effort is made to render the reforms politically popular and ultimately sustainable.

c) He points out that, the trouble with the “do as much you can as quickly as you can approach as emphasized by the Augmented Washington Consensus is bad economics because the optimistic strategy may end up being targeted on areas of reform that are not particularly significant for economic growth at that point in time and may end up producing low economic returns. The vast majority of take-offs are not produced by significant economic reform and the vast majority of significant economic reform do not produce economic take-offs.

d) Furthermore, the author managed to analyze the diagnostic approach to growth strategies. He proposed that the biggest hit for the reform buck can be obtained by identifying the most significant bottleneck in the economy at any point in time, and focusing efforts on alleviating that bottlenecks. Thus, in order to deal with these bottlenecks we must be able to realize that if intermediation is problematic, there must be lack of competition among banks and/or high taxes on the financial system that are proportionate with the limits. And if labor skills are the constraints, it must show up in very high return to education, if taxes are significantly constraining private activity, the effective tax rate must be high, if corruption and other institution problems are dominant these should show up in cross-national survey evidence. If information or coordination externalities are rampant, there must be a shortage of new investment ideas and the policy setting needed to exploit new opportunities must be absent.

e) Therefore diagnostic approach clarifies why it is desirable to apply different fixes to different countries, match policy priorities with diagnostic signals, Find ways of identifying country specific solution and it is inherent bottom-up that it empowers countries to do their own diagnosis analyses. Diagnostic approach is sensitive to political and administrative constraints and it is dynamic in that it recognizes that the nature of the binding constraint changes over time.

3) RELEVANCE OF THE ARTICLE TO TANZANIAN SITUATIONS

i. The nature and content of economic reforms carried out in various countries in Africa and Tanzania in particular, have varied in terms of coverage and emphasis. However, the main elements of economic reform have been liberalization of internal and external trade, greater reliance on market forces (i.e. price liberalization, devaluations and interest rate adjustments), tight monetary policies, mainly in the form of credit squeezes, and tight fiscal policy in the form of budget cuts and public sector reforms. These policies have primarily been designed to restore equilibrium, especially in the balance of payments and the fiscal and monetary variables.

ii. The 1980s and 1990s was the moment in time in which Tanzanian government adopted several reforms as a response to economic crisis which was claimed to be a result of inappropriate domestic policies, including incentive structures, and the mismanagement of public resources (World Bank, 1981). In responding to the economic crisis, Tanzania government was forced as one of the IMF and World Bank condition to adopt Structural Adjustment Programmes. According to Husain (1994) it is indicated that for 1985-1990 the export volumes of nine major export commodities in countries which had undertaken Adjustment Programmes like Tanzania increased by 75 per cent as compared with the 1977-1979 averages. Yet export earnings from these exports had fallen by 40 per cent over the same period, because of deteriorating barter terms of trade.

iii. Some of the conditions embedded in Structural Adjustment Policy were Down-sizing Government structure for efficient human resource and effective service delivery, Introduction of Multi-party system for democratic government, Privatization of some of the public sectors such as Industries, mining sectors and hotels in order for improving performance and production. However, despite of the expected outcomes the return has been so slow and negative in some sectors. After all that beautiful plans and propagandas one was expecting rapid economic growth, Law inflation rate, Rapid reduced absolute poverty among the majority Tanzanian, and Increased employment and per capital income but this is not the case. It is almost 20 years since the adoption of structural and policy reforms but Tanzania is still lagging at the 3rd poorest country in Sub Saharan Africa despite of the richness in natural resources and tourist attractions.

iv. Never the less, since the inception of economic reforms in 1986, a large segment of Tanzania’s population has benefited from gradual poverty reduction, which was driven mostly by steady improvement in economic performance, implementation of structural reforms, and, in the most recent past, greater attention to public service delivery. GDP growth has been sufficient to allow increases in income per capita, including in rural areas. However the decline in poverty has been more pronounced in urban areas, while poverty in rural areas which employs more than 75 percent of the population, remains considerably higher. In conclusion therefore, one may argue that not every approach and reforms that have worked in the western countries can also be copied by developing countries to bring about economic growth in isolation of historical background, cultural and political condition and environment.