Diana Hochraich: L’Asie, du miracle à la crise

The subject of this work which, like many another, was
published in the midst of the Asian crisis, actually goes well beyond the crisis,
the miracle and Asia, stating its dissenting intentions from the outset. Its title
and back cover are good commercial slogans but may disappoint those readers who
are simply seeking an analysis of the recent Asian crisis.

Diana Hochraich gives much more than a mere explanation
of a phenomenon localised within a particular geographical zone. The value of
the book, which could be re-entitle “For a Defence of Asia, from Miracle
to Crisis”, lies in its challenge to the generally accepted view which wishes
to see “only in the particular nature of these (Asian) countries the causes
of their downfall”. On the contrary, the author tries to place Asian “miracle”
and “crisis” in the wider context of world economic development in our
century, characterised by the globalisation of production and finance.

Already in the first part, where she analyses the globalisation
of financial markets, the creation and operation of oligopolies and the globalisation
of key sectors of production for Asian development, the author attacks some widespread
views. The assumption that finances command the real economy is, according to
her, an erroneous one. “The idea according to which financial markets are
anonymous is equally false” (p. 18), and “International financial institutions
and governments could constrain, if they so wanted, the movements of investors”
(p. 19).

Even if one does not completely share these views, her
analysis of the division of the world into “developed” and “underdeveloped”
countries, her explanation of the dynamics linking these “two worlds”
and finally her criticism of the different models of economic development are
fascinating. They are also more convincing than the widespread view of a regional
crisis brought about by the specific situation of countries as different from
each other as are Japan and Indonesia.

The author has a clear-cut thesis that she outlines in
various ways, one of which is the study of the failure of the Asian model of development.
As she stresses in the Introduction, “Oligopolitical businesses are the main
vectors of globalisation. The present crisis proves that this is leading developing
countries not to catch up with the richest ones, but to be subject to a crisis
unprecedented in its gravity” (p. 11).

“In the wake of the First World War, the world market
was already set up in its present form” (p. 151) and “the division of
labour between developed and underdeveloped countries established at that time
persists today more than ever. Accordingly, such industrialisation [that of underdeveloped
countries] has not modified the traditional international division of labour …”
(p. 153).

This is the conclusion and also the main line of thinking
of the book. Paleo-marxist? Perhaps. After presenting her theory in the first
part of the book, Diana Hochraich goes on to provide examples. The comparison
between the Asian financial crisis and the Latin American debt crisis, Asian development
based on subordination to Japan’s and even the false immunity of China in
the face of the crisis always bring us back to the same point: the developed countries
have carved up the world and the different models of development followed by underdeveloped
countries have all appeared to be incapable of challenging this situation. Whether
it be the Asian model, based on “export-oriented industrialisation”
or that of the “substitution of imports” formerly adopted by Latin American
countries, for the writer none has enabled these countries to develop. Even a
mix of both models, attempted by Taiwan and South Korea, has not constituted any
lasting solution.

Those economists who explain underdevelopment as backwardness
with respect to advanced capitalist countries seem to have been refuted forever
by the failure of the Asian miracle. This approach can only lead to a criticism
of the IMF, whose “formula plan” is castigated by the author, as being
always dictated by the interests of Western banks rather than by those of the
States that it purports to help. “Every country where the IMF has stepped
in, banks and businesses have seen their troubles increase by dint of the drying
up of liquidities.” (p. 133)

Are there therefore no solutions? The situation is very
complex and it is not a matter of finding guilty parties. Even regional integration,
considered by most observers and players to be something positive, seems to accentuate,
rather than defuse the effects of the crisis. The only certainty is that the responsibilities
and so the possibilities for resolving the present crisis are not all to be found
among the countries most directly concerned.

Whilst she is pessimistic in many respects (“The Asian
crisis is far from over”, p. 127; “Asia will no doubt go through a lost
decade, or worse still, a process similar to the one undergone by Latin American
countries”, p. 147), Diana Hochraich is nonetheless of the opinion that the
solution is to be found in a radical shift in relations between the two worlds.
“It is clear that the answer to the question of underdevelopment will scarcely
be found other than through the search for another type of co-operation”
(p. 157).

Whilst subscribing to this conclusion, we must at the same
time do some updating and raise a question to which one would like the author
to attempt a response. Compared with the time of her writing, things seem to have
got better in Asia. Perhaps the crisis was not as absolute as it appeared in 1997
and perhaps also these countries have assets which are different to those of Latin
American countries. The issue of specificity would therefore play a more important
role than the one judged by Diana Hochraich.

But if, on the other hand, the facts bear her out, we would,
like the author, come to wonder what “other type of co-operation” is
imaginable in the world economic and political context for the third millennium?

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