China rarely expressed concern about what happened to emigrants until the later years of the nineteenth century when the worst abuses of the coolie trade and foreign pressure led to the establishment of consulates. Up to then, it was widely assumed that only barbarians lived abroad. Internal migration was always an accepted policy expedient, to reduce population pressure or to sinicize frontier regions and thus defend borders. Individuals who went further afield were expendable: riff-raff and rebels — a negative opinion reconfirmed by the anti-dynastic movement in the first decade of this century, which also brought home the message that migrant communities might, in future, require much closer watching.

By that time, the Chinese Government had already come to appreciate grudgingly that wealth or experiences gained in the outside world might assist “self-strengthening”. In any case, the mistreatment of migrants and their eventual exclusion from North America and Australasia were galling admissions of the country's international impotence. But nothing else changed China's relationship with the so-called Overseas Chinese to the same extent as the 1911 Revolution and the rise of a strong sense of enthnocentric nationalism. Just as it is proper to criticize the “White Australia” policy, it is important to understand how — by linking culture and ethnicity with nationhood — Chinese migrants also built barriers of their own, particularly in Southeast Asia where the divide-and-rule policies of colonial governments likewise encouraged communalism.

Origins of Chinese Attitudes

An old riddle asks whether the original Great Wall of China was constructed to keep the Chinese in or the barbarians out. In reality, it did neither, for when China was strong, it expanded, annexing northern Korea and Vietnam as well as Tibet and the inner Asian frontier.

Responses from the thirty MNCs shortlisted for the detailed study indicated that labour supply and the training and development of manpower were critical factors in their investment decisions. All cited Singapore's superior work-force as one of their chief reasons for investing in Singapore. At the same time, however, they cited Singapore's shortage of labour, particularly at the operator level, as the reason why they had moved out some of their operations. Their main reason for choosing Malaysia and Thailand as the preferred new location was precisely the availability of a large pool of low-cost trainable workers.

Based on the responses from the thirty companies interviewed as well as additional research, this chapter reviews the labour supply situation in each of the three countries. It also covers the important but often neglected role of manpower training and development, particularly in technical disciplines. In addition, it surveys the quality of the work-force in each of the ASEAN-3 and their wages and benefits. The conclusions, presented at the end of the chapter, assess whether labour constitutes a competitive factor in the ASEAN-3, or whether the differences in labour resources have instead led to greater complementarity among them.

THE LABOUR SUPPLY SITUATION

Singapore

Following the strong recovery of the Singapore economy from the 1985/86 recession, companies have faced a tight labour market at all levels of the work-force — from production operators to post- graduate researchers. With a total work-force of only 1.25 million, demand for labour has outstripped supply, especially after the economy bounced back strongly from the 1.6 per cent decline in GDP in 1985 to 11 per cent growth in 1988.

The MNCs indicated that the most serious labour shortage in Singapore occurred at the operator level. Shortages at other levels exist but are not as critical.

Although Japan was admitted to the club of nations and regained its independence, the conclusion of the San Francisco peace treaty in 1951 did not fully settle the differences between Japan and its Asian neighbours. Most of the Southeast Asian nations withheld ratification of the peace treaty until the settlement of reparations, demanding across-the-board restitution of war losses. To restore friendly relations with them, therefore, Japan's positive action was of great necessity; hence war reparations, economic aid and trade.

During the 1950s, because it was difficult for Japan to rely on the China market Japanese policy-makers began to regard Southeast Asia as a raw materials supplier and a lucrative market for Japan's products. The region became the prime target for Japan's “economic diplomacy”, a policy initiated by Prime Minister Yoshida and carried out vigorously by successive administrations without due consideration of the voices of the Southeast Asian countries. Prime Minister Nobusuke Kishi (1957–60) in particular finalized Japan's economic linkage with the region by resolving the reparations negotiations and, more importantly, by visiting the region in 1957 – the first prime minister to do so since World War II. Unlike Yoshida's enigmatic triangular relationship with strong U.S. support, or to put it bluntly “riding on the American Asian policy”, Kishi attempted to cultivate closer Japan”Southeast Asia relations with less dependence on Washington. To be sure, it was a successful re-entry, but not a smooth transition.

JAPAN's REPARATIONS POLICY AND SOUTHEAST ASIA

After acceptance of the Potsdam Declaration in August 1945, Japan was put under the control of the Allied Powers (or SCAP – Supreme Commander for the Allied Powers), which was led by General Douglas MacArthur until 11 April 1951 and by General Matthew Fidgway until 28 April 1952. Like other defeated countries, Japan invariably faced its reparations obligation, as the Potsdam Declaration stipulated: “Japan shall be permitted to maintain such industries as will sustain her economy and permit the exaction of just reparations in kind, but not those which would enable her to re-arm for war.

THE EXPERIENCE OF THE ASEAN - 3

Singapore's experience with industrialization, as well as the more recent experiences of Malaysia and Thailand, has proven that an MNC-led industrialization strategy can lead to rapid ascent up the technology ladder. This experience disproves the Marxist-inspired development economics of the 1950s and 1960s which harped on the dangers of exploitation by MNCs and a dependency on foreign agents. What the early development economists failed to foresee was the global nature of MNC operations and the tremendous opportunities provided by the international division of labour.

Although it cannot be denied that the ASEAN-3 are dependent on MNCs to generate growth, this dependency has proven to be mutually beneficial. While MNCs benefit from low-cost production bases, the host countries have found that, through MNCs, they have ready access to capital resources, technological know-how, up-to-date products, modern managerial and technical expertise, and global markets. This chapter analyses the manner and extent to which this was achieved in the ASEAN-3. Apart from examining the flow of technology from the more advanced countries to the host ASEAN countries, an assessment will also be made of the intra-ASEAN technology flows based on the experience of the MNCs studied.

Technology is defined here in its broadest sense to include knowledge of modern scientific methods that can be applied to the production and distribution of goods and services. Defined this way, technology is embodied both in the hardware of machinery and equipment and in the “software”, that is, the people who operate, maintain, adapt and develop these machines.

A number of studies on technology transfer in ASEAN have been done by Nathabhol, Osman-Rani et al., Ng et al. and Chng et al. Chng et al. lists three distinct components of technology that can be transferred:

1. 1. physical assets, such as plant, machinery and equipment;

2. 2. information, both technical and commercial, relating to such matters as process know-how; choice of technology; engineering design and plant construction; organization and operating methods; quality control; and market characteristics;

3. 3. human skills, especially those possessed by specialized professionals and engineers.

Chairman:

Ladies and Gentlemen, the ever tighter schedule threatened to squeeze out the question and answer session. We have a few questions which the President has offered to meet. So, can I ask questioners to be brief, state your name, and get to the point quickly, please.

Question

Mr President, the trend towards closer economic interaction within regions — with Europe forging a single market and the United States, Canada and Mexico moving towards a North American Free Trade Area — will grow in momentum in the 1990s. How in your opinion can we ensure that these trends do not result in inward-looking economic blocs? How can APEC as a body promote greater economic openness and counter these inward-looking trends?

Bush:

First, help us reach a successful conclusion to the GATT round. Therein lies the most important single step that can guarantee against trading blocs. Second, accept my word that nothing in the North American Free Trade Agreement wants to contribute to dividing the world into trading blocs that shut out other people's goods. That is not what it is about. If we are successful in NAFTA, that will increase markets for Asian goods in South America, which has been an area that needs economic help. So, the first answer is help with GATT, successful conclusion of the Uruguay Round. And the second answer is, please understand that NAFTA — I can only speak for American participation therein, but I am sure it is also true of President Salinas of Mexico and Brian Mulroney of Canada — has no intention of having that free trade between ourselves be a bloc to ASEAN goods. Stop worrying about that! That isn't going to happen.

Question:

Mr President, I believe that most countries in the Asia-Pacific region want to see the United States continue to play a major economic and security role in the Western Pacific. But many are worried that Japan may become the leader in the economic competition, especially in trade and investments in the Asia-Pacific region. Will the United States respond to this Japanese economic challenge and stay in the competition? If Japan does eventually become the pre-eminent investor and trader in the region, will the United States be engaged in the economies and the security of the region?

The complexity of Japan's interaction with its Asia-Pacific neighbours defies easy categorization and analysis, but understanding the interrelationships is crucial to assessing the broader implications of Japan's growing role. This chapter first examines Japan's overall regional economic strategy and its interaction with individual countries or sub-regions. Then it considers the overall systemic and functional linkages in order to better appreciate the profound impact of Japan's rapidly rising aid and investment on the wider political economy of the Asia-Pacific region.

“Flying geese” and the new division of labour

Flush with growing self-confidence, a number of Japanese academics, bureaucrats and political leaders have openly articulated new concepts for the organization of production and trade in Asia. These notions are based on implicit acceptance of the superiority of Japan's production system and the explicit desire to integrate those countries of the Asia-Pacific region that have favourable economic policy and labour conditions into a greater Japanese economy. Over the longer term, Japanese economic managers appear to seek a “division of labour” that maximizes each country's comparative advantage, thus fostering complementary rather than competitive patterns of industrialization.

One notion, popularized a decade ago by Dr Saburo Okita, foreign minister under the Ohira government in the late 1970s, is the concept of the Asian countries as part of a formation of flying geese. Japan, with its larger economy and higher technological level, is in the lead position. Ranged behind it in order of their economic strength and levels of technological sophistication are the NIEs, the ASEAN countries and, finally, the lower income countries of South Asia and Indochina. As seen by Okita, the successive waves of “geese” will gain from the experience of the leaders and tend to close the technological gap, leading to the eventual horizontal integration of the Asia-Pacific region. This outcome is viewed as a direct result of the pro-investment, marketoriented, export-led growth policies followed by the most economically dynamic Asian countries.

Introduction

The issue of migration to Australia has become controversial at both ends of the migration chain. One argument used by some who oppose such immigraton to Australia is that many of these newcomers are of “low quality” in terms of occupational skills that are in demand in Australia, and that many migrants become tax burdens because of the unemployment benefits that they consume.

Concern about migration has also been expressed in some of the sending countries. Political leaders and the mass media in these countries have suggested that those emigrating are most likely to have high educational attainment and business skills, and are therefore the people most needed to promote economic development in their own countries. In Hong Kong, Malaysia, Singapore and the Philippines, press reports have suggested that migration is responsible for the shortage of people in various occupational categories (for example, Straits Times, 4 December 1988, p. 15; 14 December 1988, p. 12; 27 September 1988, p. 5; 10 October 1988, p. 7; 9 January 1989, p. 16; 19 January 1989, p. 9; Lee 1987). In this chapter the validity of these arguments is examined from an empirical viewpoint. The question of whether or not there is a “brain drain” from Southeast Asia to Australia is also investigated, by looking at the occupational skills that immigrants from Southeast Asia and Hong Kong bring to the Australian labour force.

The first section provides background information to the “brain drain” — “brain gain” discussion which follows and establishes baseline data from which an evaluation of immigration from these source countries can be made. The rate of migration from these sending countries in recent years is ascertained and some of the methodological difficulties in determining the flow of Asian immigrants to Australia from available sources of data are discussed. This is followed by a brief review of the criteria for admission to Australia under the various categories of the immigration programme and the proportion of immigrants from Southeast Asia and Hong Kong which fall into each category.