Globalization and Development in the Mekong Economies

Globalization and Development in the Mekong Economies

Edited by Suiwah Leung, Ben Bingham and Matt Davies

Since the late 1980s, Vietnam, Cambodia, PDR Lao, and Myanmar have been opening their economies to international trade and investment. With the exception of Myanmar, the reforms have yielded impressive results, but the process is far from complete. In this enlightening book, a group of leading scholars outline the continuing reform efforts needed to survive the current global recession and place these economies in a competitive position on the recovery of the world economy.

Chapter 6: Proliferation of PTAs in East Asia: What Does it Mean for the Mekong Countries?

David Robertson

Subjects: asian studies, asian development, asian economics, asian urban and regional studies, development studies, asian development, development economics, economics and finance, asian economics, development economics


David Robertson For 40 years, export-led growth dominated development strategies in East Asia. The fall in world trade resulting from the current global recession raises doubts about this development paradigm. Nevertheless, for most small open economies of East and Southeast Asia trade is likely to remain a central focus of development. This chapter briefly discusses the basis for the growth of manufacturing exports from the East Asian newly industrializing countries (EANICs), emphasizing the opportunities offered by OECD trade liberalization under GATT in the 1970s, and the pragmatic cooperation between governments and firms to exploit those opportunities.1 It then traces the politicoeconomic forces resulting in the growth of bilateral trading agreements in the region during the 1990s and assesses the implications of this complex ‘noodle bowl’ of bilateral (preferential) trading agreements (PTAs) for the Mekong 4. 1 THE EAST ASIAN ‘MIRACLE’ Export-led growth in East and Southeast Asia sprang from market-based enterprises and pragmatic cooperation between firms and governments. According to the World Bank (1993), the exceptional performance of these economies was not based on 1960s’ received theory of development based on import substitution, financial aid and formal inter-government agreements. Rather, EANIC governments facilitated exports using fiscal and financial incentives and free trade zones to support local enterprises (Leipziger and Thomas, 1993; Gill and Kharas, 2007). Gradually, manufacturers in OECD economies began to include these ‘Asian tigers’ in their production processes. New opportunities attracted foreign investment and generated employment in labour-abundant Asian economies. 77 78 Globalization and development in the Mekong...

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