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The economics of Asian Values 16th December 1997 By Professor George T. Haley, Academic Advisor to the Asia Pacific Management Forum Back to Asia Pacific Management News Menu | Asia Business News Portal | Asia Business News Feeds | Asia Pacific Management Forum
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I know of few people who would argue that the Asian Values of hard work,
loyalty, and an emphasis on society's needs, rather than almost exclusively
the individual's, are not desirable and important factors in Asia's economic
growth and success in recent decades. In the praise of Asian Values, however,
it is often forgotten that hard work and loyalty are also foundation blocks
of Western Value Systems (e.g., the Protestant Work Ethic). Hence, possibly
a focus on the differences between the different Value Systems would be
appropriate when trying to discuss why Asia' present economic problems are
so severe and troublesome.
Many Asians consider Westerners, and especially Americans, rude and intrusive for the directness of our speech patterns and demands for transparency; and perhaps we could use some lessons in tact. However, the Asian Values of circumspection and extreme privacy in their dealings, especially financial dealings, often act to prevent them from taking the actions necessary to deal successfully, and in the shortest possible time, with severe economic failure when it rears its ugly and painful head. Prime Minister Goh, in his Chicago talk, praised Mexico's economic turnaround for its speed and its thoroughness. Compare this with the continuing soap opera in Japan's economic woes. Considering the underlying strength of the Japanese economy, its individual companies, and its populace, the difference in the turnarounds, on economic terms, is incomprehensible. The difference lies in the way the Japanese have handled their crisis. In Mexico, always a more transparently run economy than Japan's, everyone knew what the problem was and demanded it be fixed (admittedly, not everyone agreed on how to fix the problem); people knew even more about Mexico after the International Monetary Fund and the US enforced even more transparency, and hence something has been done about at least some of the problems which have periodically beset Mexico's economy over the years. In Japan, the Japanese people, due to the size and power of Japan's economy, have not had the benefit of outsiders coming in and forcing transparency and straight talking on the Japanese government and finance ministry, hence the long, drawn-out misery in Japan as the public and the more farsighted industrialists have insisted on getting the truth out of the finance ministry and before the public. You may hide a dead rat from health inspectors for a while, but if you don't clean it up it will eventually stink too much to be hidden and cause an even worse problem for you. This is what has happened in Japan. One must remember that Americans, just like Asians and everyone else, do not like everyone knowing about their finances and financial transactions. The is not a traditional part of American Values, it is a value America learned the hard way. Prior to the great depression, industrialists and government ministers made decisions in the US in much the same way which Asian governments and industrialists do today, under a shroud of secrecy and cooperatively. It did not cause the Great Depression, but it certainly worsened it as poorly conceived, speculative, secret financial dealings brought about one collapse after another. Some Asian Values have created one of the great economic miracles in history; others are threatening it. Asians should not deny the value of some Western Values: Transparency and directness are good economics.
George T. Haley
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The views expressed here may not necessarily reflect those of Orient Pacific Century or partners of the Asia Pacific Management Forum
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