'Resist pull of economic nationalism'

By Paul Jacob, The Straits Times, 31 July 1998

COUNTRIES battered by the economic cyclone which swept the region must resist the temptation to turn inwards even though some have now questioned the benefits of plugging into the global network, Trade and Industry Minister Lee Yock Suan said yesterday. In a speech for the 30th anniversary of Iseas, he said problems from the crisis could not be solved by turning to economic nationalism.

Economic nationalism was growing due to the perception in some quarters that globalisation and foreigners are largely to blame for the region's economic woes.

Regional growth has declined sharply and most projections indicate Asean as a whole will experience its first year of negative growth since 1967 -- with Thailand and Indonesia hardest hit.

Notwithstanding the current destabilisation and difficulties brought about by the sudden outflow of short-term funds from the region, countries should not close their economies and become inward-looking, he told academics, analysts, diplomats and other guests at the institute's new premises.

He said globalisation was an inevitable process and it was important at this time that Asian countries maintain a balanced perspective on globalisation for a number of reasons:

It was fostered by the information-technology revolution and was a force that could not be ignored;

Countries which hid behind barriers in an increasingly borderless world of trade and commerce will be marginalised;

Economies that remain part of the global network can continue to benefit -- so long as appropriate domestic policies and institutional frameworks are in place.

He said regional economies must press on with the reform process to become more market-oriented and better able to integrate into the global economy.

This will help restore business confidence and provide better access to global financial resources, he said, adding that it will also enable them to tap foreign investors to recapitalise viable businesses and earn foreign exchange from the exports of their goods and services.