Abstract
Joergen Moeller, a professor at Singapore Management University (SMU) and former ambassador to Singapore and Australia and New Zealand, has written a well versed treatise on Asia based on his near 40 years of diplomatic service. A Keynesian by training, Moeller’s book highlights an outdated model of western economics, the rise of Asia and the various new social paradigms forming there. Two main societal themes are inter-woven in all chapters: burden sharing, that is optimizing resources for large populations; and social capital, which is key to building trust and maintaining economic growth.
The structure of the book is an encyclopedia for Asian development trends covering seven chapters. Chapter One, ‘The Future World View’, is over 100 pages alone; this is because Moeller puts the conclusion first to tempt the reader’s interest, leaving detailed factors in the rest of the book. With so much information presented, the reader can quickly be overwhelmed with Asian economics, social issues and statistics. It is not a light read for those outside Asian academies or policy making circles.
Moeller discusses how current western market mechanisms simply do not exist to confront looming Asian problems such as credit overhangs, budget deficits and CO2 emissions. These issues require new and innovative thinking if they are to be overcome. A blind acceptance of US capitalism and consumption models that has been fundamental in the assumptions of many Asian scholars (e.g. Kynge, Myrdal, Naisbit, Sanjal) over the past 40 years has also failed to address Asian sustainability.
In Chapter Two (‘Future Forecasting’), the shortest chapter, Moeller conceptualizes change in a world of societal and technological disruption (cf. Drucker’s (1992) ‘change discontinuity’) and some possible scenarios. Moeller uses demographics and moral values to begin a canvas of what is ‘social capital’ by clustering 29 Asian societies (p. 133).
The strongest chapter in the book is ‘Aces and Duds’ (Chapter Four), with the third chapter (‘The Assets’) leading into it. In these two chapters, changing mindsets regarding education, social capital, finance (Asia as a creditor) and infrastructure building explain why Asia has now arrived and will become the economic epicentre of the 21st century. Significantly lower labour costs and weak respect for social protections have allowed China and India to lift millions out of poverty (though many hundred millions still remain in poverty) and become emerging markets themselves for goods and services. Moeller pays particular attention to two key themes: first, education, which is unleashing the creativity and organizational skills of the new Asian mindset while increasing social capital and second, finance, where Asia is becoming the creditor to the world.
Education and finance go together. Educational institutions increase social capital to promote stakeholder formation by various ethnic and religious subgroups (the Singapore model). This group based philosophy puts resources at others’ disposal, which develops trust in a national economic system that minimizes elitism (p. 294). The litmus is an efficient financial system reflected by heterogeneous societal cohesion and burden sharing. Today, due to scarcity of commodities, managing economic growth is not the main political priority. Burden sharing means countries with large populations cannot aspire to mass consumption, but must raise the cost of commodities while lowering the costs of labour inputs. As a result, the new model of productivity in today’s world will not be measured in total outputs, but rather in efficient use of resources and skills inputs. A recent MIT study by Gutowski (2009) and others seems to confirm this new economic reality.
Urbanization presents another possible strength in Asia. Megacities agglomerate and become regional wealth drivers and population confluences more powerful than the nation state in which they are located (e.g. Bangkok and Seoul).
Chapter Six (‘Threats’) is very detailed, but rehashes many of the traditional themes preventing Asian integration and social development: corruption, pandemics, terrorism, government interference (chaebols, sovereign wealth funds), wealth inequality and failed states such as North Korea. Moeller believes the new trend in Asia will be of increasing financial power with decreasing military reliance.
The book culminates in Chapter Seven, ‘Interaction’, with four ‘triumvirates’ defining Asia’s geopolitical future as a wheel or trap: external (reflecting Asia’s high commitment to globalization); domestic (social stability via economic growth and innovation/creativity); technology (increasing value added production from design to branding); and environmental (with a focus on burden sharing) due to world scarcity of commodities.
Moeller’s focus, while giving some attention to India, is clearly on China, which he lauds for developing quickly and bringing many out of poverty based on export and outsourcing models. Little is said about Indonesia, Malaysia, Vietnam or Korea. Japan is a further issue as it is out of place in a largely developing Asia. Chronic Asian underemployment via a reliance on state capitalism to maintain mass employment is not adequately addressed and neither China nor India has fully ‘decoupled’ economically from the West.
The main societal implication of this book is that Asia is well positioned to utilize burden sharing and social capital in replacing the western capitalist model of building wealth for the individual. A middle solution, where Asia keeps the ship on an even keel between social networks and capitalism, is an illusion; as Moeller states, ‘The world will force a new Asian model of burden sharing or a breakdown of the existing model’ (p. 483).