THE NEW ASIAN WAY:
Rebuilding Asia Through Self-Reliance
Author: Foong Wai Fong, Megatrends Asia
After half a century of spectacular growth in a relatively stable global environment, Asian economies face the most severe economic challenges in a world increasingly driven by the forces of globalization and technology. The financial crisis that began in the summer of 1997 in Thailand has caused untold damage to wealth and output, and has even undermined the confidence of the people in these once robust tiger economies. Stock markets and real estate have lost some 30–80 per cent of their value; the damages bill is probably close to US$1 trillion. The region's banking systems, reeling under the weight of a mountain of bad loans, have put another US$1 trillion at risk, when circumstances in China and Japan are taken into account. Over-leveraged corporate Asia must undergo a massive restructuring and de-gearing exercise. Billions of dollars of fresh capital is needed to recapitalize the region's financial system in order to put it back on its feet. With panic spreading and confidence draining, the region — once the darling of foreign investors — has seen the inflow of investment capital turn dramatically into an outflow. In 1997, the net outflow of capital was approximately US$12 billion compared with a net inflow of US$97 billion in 1996 — a swing of almost $110 billion in portfolio and investment funds in just one year!
As the Chinese proverb says, the sky has changed. All East Asian economies, except perhaps China and Taiwan, may experience an economic contraction for an extended period of rebuilding and adjustment. The fall-out from the crisis is astonishing in its severity, and carries potentially explosive social and political implications for Asia's young nations. What started as a financial crisis has developed into an economic crisis of a shocking magnitude. The speed of events is unprecedented and the impact massive: in less than one year, two governments have been toppled, the social glue that took decades to cultivate has suddenly evaporated into thin air and robust economies have crashed into recession.
Some questions must be addressed as Asia seeks solutions to this block in the road to modernization:
- What fundamental changes must Asia make to get back on its path of sustainable growth?
- What choices must Asian nations make with regard to the change of context in the global economic order, and how will these choices influence the future political, economic and social landscape of Asia?
- In the new world order, what can Asian countries, businesses and individuals do to shield themselves from the destructive consequences of the new global forces?
Chinese-Malaysian writer and John Naisbitt's collaborator in Megatrends Asia, Foong Wai Fong, tries to find the answers in this very different book. While she revisits the age-old wisdom and philosophy of self-reliance, she enlarges the context of the discussion to embrace the political, economic, social and technological trends that are impacting on Asia and the world today. Wai Fong, drawing on her own personal and business experiences, extensive global travel, research, and conversations with business leaders and successful individuals from Asia and around the world, argues, in The New Asian Way, that Asia must be rebuilt through self-reliance. She examines the rapid change that is taking place in the world, dispels myths and misconceptions, and argues that understanding the world, ourselves and the influences that shape our world view, are the keys to shaping a profitable future.
The economic resurgence in Asia following the Second World War created fields of dreams for entrepreneurial Asians, from Harbin to Hong Kong, Shanghai to Singapore, and Manila to Mumbai. It ignited hopes for an Asian Dream of prosperity, and progress for millions of Asians. Up till the financial crisis of 1997, while external demand is still important to Asia's sustainable growth, Asia was achieving critical mass. The foreign direct investment that was fueling Asia's growth came increasingly from the region, and stays in the region, so is Asia-Asia trade, rose to a level exceeding Asia's trade to the rest of the world. The inflows that destabilized the region was short term portfolio funds and bank credit, principally from Japan and Europe. Productivity growth and expansion of productive economic activities could not absorb such huge inflows, thus directed all these funds towards blowing huge real estate and stock market bubbles.
Meanwhile, the world in 1998 has changed in a very radical and dramatic fashion. In a single day, the financial markets can trade US$1 trillion, all done through tapping keys on computers. With the capacity of the microchip doubling every 18 months, the power created through digital infrastructure is almost limitless. Asia stands to profit and prosper in the new global world today — if it has the will to carry through a new cultural revolution.
As Wai Fong observes, the revolution was already unfolding well before the financial crisis.
The year 1997 saw the beginning of a new era for Asia. The region is already witnessing the emergence of new ways of doing old things, the rise of new icons, new leaders and new leadership styles. The New Asian Way will unfold to embrace the opportunities that the region presents. It will overcome the challenges of global forces and ensure that, in the early decades of the new century, Asia will have carved for itself a distinctive new character. This revolution will reach far — the corporate world and business, communities and individuals will all be affected — and, most importantly, it will herald the dawn of an Asian renaissance.
The way in which Hong Kong succeeds in adhering to its free market economy and reinvents itself to maintain its competitiveness while the pressure for democracy builds up may be an example for other Asian communities. The employee-employer partnership that has been established by the Taiwanese computer giant, Acre, its '21–21 Project', is a model for corporate success and appears to permanently resolve the longhand conflict between labor and capitalists. The Grameen Bank established by Mohammed Yunus in Bangladesh and other non-government organizations throughout the world are proving that bottom-up self-reliance is an alternative development model. Master Cheng Yen's empowering leadership and self-organizing 'family' of workers are another expression of the New Asian Way of community self-help. The success stories of entrepreneurial township and village enterprises and privatized State-owned enterprises in China further confirm the power of ownership by the people and the dynamism it can bring to an economy. The flexible, networked organization of small and medium-sized businesses, especially in the Chinese Economic Areas, is advancing a new concept of business organization to replace the increasingly burdensome, hierarchical Japanese corporate behemoths. All these are successful examples of and preludes to the New Asian Way — waves of bottom-up self-reliance that lead to growth and progress.
This book outlines new relationships, new leadership styles and new ways of organizing, and suggests the strategies to be put in place if personal, business and community success is to be achieved. It begins by describing the broad picture of the political, economic and social conditions in the world today, especially in Asia, and demonstrates how an understanding of this will help you better manage yourself and your business.
Discussions in The New Asian Way embrace philosophy, economics, politics, sociology and history as the book maps out the way of the future. The book is intended for those success-seeking, entrepreneurial Asians who want to control their own destinies amidst the transformation that Asia is currently experiencing. It encourages them to discover the creative power and potential that exists within themselves and their communities. Wai Fong observes that social policies aimed at delivering benefit to all have gone too far: the result has been large, unwieldy government in the West and paternalism in Asia. People have lost sight of the fundamental values that can make them successful. She argues that growth as a goal for self-reliant individuals is not only important for personal success and fulfillment, but is also fundamental to the attractiveness and continued prosperity of a community or a nation.
Globalization, technology and competition are strong global forces that are causing the sea change witnessed today. It is particularly turbulent for Asia's young economies in transition, as they are forced to undergo modernization at a particularly difficult time. We must all re-evaluate our lives in a range of areas: new employee-employer relationships; the development of a strategy for personal upward mobility; the acquisition of skills to guarantee employability; an examination of personal values; leadership styles; effective organizational forms; and the need to work towards building global enterprises. Attention to these areas will present Asians with opportunities as the region accelerates its modernization in the wake of the financial crisis.
It is a tour de force in its presentation of conditions currently prevailing in Asia and a vision of what the New Asia will be. It shows how the New Asian Dream can be achieved through entrepreneurship, self-reliance and an open, global attitude. It is about:
- Learning from the World
- Building the Free Market
- Creating an Opportunity Society
- Going from Handouts to finding a Way Out
- Graduating from Working Class to Middle Class
- Shifting from Local Business to building Global Enterprises
- Working with Hands to Creating with Minds
- Changing from Powerful Leaders to Empowering Leadership
- Relinquishing Strong Government to participation by an Engaged Citizenry
- Embracing Winning Values
- Support from Public Institutions to build self-support Communities
This is an invaluable perspective for anyone who wants to understand the New Asia and how its modernization will reshape the global order in the coming millennium.
FOONG WAI FONG is the author of the book The New Asian Way: Rebuilding Asia Through Self-Reliance and numerous thought-provoking articles hosted at Voices of Pahlawan.
Partner and collaborator with John Naisbitt for Megatrends Asia, Foong Wai Fong is also a columnist and much sought after speaker for world leading companies. She specializes on global and Asian business trends. InHouse Seminar Details, contact RAYMA Management Consultants Wendy Song at tel: (03) 7044-666, fax: (03) 7044-484 or e-mail: firstname.lastname@example.org