Euromoney 30th anniversary: Heroes and villains
To understand the future it is necessary to debunk the myths of the recent past. During the 1990s certain platitudes have been repeated so often by economists, entrepreneurs, politicians and journalists that they are now accepted as statements of fact. Every speechmaker inserts these clichés into their texts as if such references give credence to all other ideas they wish to relay.
The underpinning proposition goes something like this: laisser-faire capitalism has triumphed over all other types of economic system; free markets occur naturally and will flourish if left to their own devices; governments are reducing their role in economies; the welfare burden is being passed from the state to the individual; globalization is spreading the free market to the rest of the world; globalization is undermining the position of the nation state.
This article will argue that none of these assertions is borne out by the facts. It’s not a question of whether markets are good or bad, or whether the best government is small or large, the problem is that the evidence to support the triumph-of-markets idea just isn’t there.
Only when it is realized that markets are not the singular way of social organization, that governments are playing a larger role in economic and cultural life than ever before, and that globalization (in the sense of universal laisser-faire) is much less far reaching and less enduring than is widely thought, can anything useful be said about future trends.
Then it becomes clear that in the 21st century new economic models will be developed suited to contemporary circumstances. New forms of international cooperation will evolve in different arenas from those of the past. Governments will play a more pervasive role in the lives of their citizens, soon learning how to control new information conduits such as the internet.
The most profound changes of all are going to take place in the role of the state in emerging markets. Social tensions in developing countries, some arising from laisser-faire, have to be managed. Externally, developing countries face completely different circumstances from those that led to the creation of the Asian export model. Governments either overhaul themselves to meet these challenges or watch their economies slide backwards followed by their own demise.
To understand the true nature of these challenges requires putting recent developments into historical perspective. Free-market triumphalism has arisen from two sources. First, from the collapse of communism and the failures of central planning, second, from the Asian crisis where, from a laisser-faire perspective, an economic model based on large amounts of state intervention was found wanting. On the back of these developments naive optimism has abounded, the most glaring example being Francis Fukuyama’s end of history thesis that democratic capitalism is the final form of human government and the victory of the western idea.
From this standpoint, markets are efficient and governments do best keeping to the sidelines. Most governments, this theory argues, are slowly learning the lesson as evidenced by widespread privatization, which has transferred the commanding heights of the major economies from the public to the private sector.
State spending is also being reduced, argues the laisser-faire school, further reducing government’s role in the economy. The trend for central banks to be independent and the adoption of fiscal rules, such as the Maastricht guidelines, show how governments are becoming aware of their own limitations and are willing to cede power to more economically rational institutions, according to this school of thought.
But sometimes governments only learn the hard way – as with fixed exchange rate regimes breaking up in the face of free-flowing global capital. Recent problems in emerging markets can be explained, from a laisser-faire perspective, as failed attempts by governments to intervene in markets.
It’s not a very big step from here to predict the decline of the nation state, as does Japanese business writer Kenichi Ohmae. “[Nation states] have become unnatural – even dysfunctional – as actors in a global economy… [They] are no longer meaningful units in which to think about economic activity,” says Ohmae in the article “Putting global logic first“.
Unfortunately, there is little evidence for these conclusions. There is no western state where public spending as a proportion of GDP has substantially declined over the past two decades. Governments may have sold assets to the private sector, but they have retained control of pricing and competition policy. Generally, increased regulation and supervision have taken the place of subsidy and ownership as a way of controlling economic activity. This is a sign of the successful development of government power that it can control things with so little effort.
Big-spending governments
Furthermore, alongside privatization and restructuring, huge increases in welfare spending have occurred as a way of coping with rising unemployment, social breakdown and ageing populations. In the UK, in the 1980s, a huge expansion in the number of disabled took place as a way of disguising unemployment. The same thing happened in the Netherlands. The result is that the state in a developed country takes and either spends or distributes between 30% and 50% of total output (see table below).
| Receipts from total taxes and social security contributions | ||
|
1994 |
1995 |
Denmark |
51.6 |
51.7 |
Sweden |
51.0 |
50.2 |
Belgium |
46.6 |
45.9 |
Finalnd |
47.3 |
45.8 |
France |
44.1 |
44.5 |
Netherlands |
45.9 |
44.4 |
Austria |
42.8 |
42.0 |
Italy |
41.7 |
41.8 |
Norway |
41.2 |
41.7 |
Germany |
39.3 |
39.1 |
UK |
34.1 |
35.2 |
US* (1993) |
29.1 |
na |
Japan |
28.3 |
na |
| Source: Derived from Economic Trends no.517, November 1996 | ||
Business author Peter Drucker, in his new book Management challenges for the 21st century, argues that any corporate strategy that fails to take account of government economic activity is a poor one. He laments the lack of attention paid by economists and business executives to shares of disposable income.
Noting that the four major growth sectors during the 20th century were government, health care, education and leisure, Drucker writes: “Of these four 20th century growth sectors, government probably has the greatest impact on the distribution of disposable income. Not because it is a major buyer or user of products and services; except in wartime even the biggest government is only a marginal consumer.
“But the main economic function of government in a developed country is to redistribute between 30% and 50% of the country’s national income. Nothing else has therefore as great an impact on the distribution of shares of national income as changes in government policy.”
Drucker goes on to point out that all four major growth sectors are not in the free market and do not behave according to the rules of supply and demand, yet account for over half of a developed economy, even the most capitalist one. Governments are becoming more powerful, not less, and are finding new ways to control the economy as well as technologies such as the internet which, in the case of some emerging countries, they find threatening.
“Governments in all developed countries, despite all ‘privatization’, are rapidly acquiring new and very powerful tools to influence, if not to control, the distribution of disposable income: new regulations that control and direct economic resources to new goals, for example, the environment,” says Drucker in Management challenges for the 21st century
Robert Keohane and Joseph Nye, in a paper entitled “Power and interdependence in the information age“ say: “The state has been more resilient than modernists anticipated. States continue to command the loyalties of the vast majority of the world’s people, and their control over material resources in most wealthy countries has stayed at a third to a half of GDP.” Keohane, a professor at Duke University, and Nye, dean of the Kennedy School of Government at Harvard University, take a down-to-earth view of the internet. “Prophets of a new cyberworld, like modernists before them, often overlook how much the new world overlaps and rests on the traditional world in which power depends on geographically based institutions. In 1998, 100 million people use the internet. Even if the number reaches a billion in 2005, as some experts predict, a large part of the world’s population will not participate.”
“Moreover, globalization is far from universal. Three-quarters of the world’s population does not own a telephone, much less a modem and computer. Rules will be necessary to govern cyberspace, not only protecting lawful users from criminals but ensuring intellectual property rights. Rules require authority, whether in the form of government or private or community governance. Classic issues of politics – who governs and on what terms – are as relevant to cyberspace as to the real world.”
The message is that within time the internet, which liberals regard as some kind of countervailing power to government, will come under state guidance. Governments are already working out how best to use it for their own propaganda purposes. This doesn’t mean the internet isn’t a useful business tool, nor that the internet industry doesn’t have a bright future. But it does rebut the idea that the internet is a victory of the free market (in either information or the flow of goods) over governments that would like to suppress it. Only a cursory use of the internet indicates its possibilities to be as much Big Brother (with instantaneous electronic records of someone’s passage through the web) as freedom fighter. As with all technologies the issue is who is going to control it and how.
Not only is the so-called laisser-faire economy not laisser-faire at all but achieving the kind of economic conditions that exist in the US and the UK can only be done through massive state intervention. This is because markets are not as natural as people think and in most societies throughout history, if markets existed at all, their effects will have been curbed – through social programmes to reduce instability and insecurity on the one hand, and on the other by monopolies and oligopolies whether they be created by trade unions or companies. Free-market advocates always counter that these “imperfections” are exceptions and that under optimum conditions, in the long run, the market prevails. But it prevails so seldom, and requires such force to make it do so, that any theory using it as the sole arbiter of economic activity only describes a small fraction of what is happening.
Free markets, strong states
John Gray, professor of European thought at the London School of Economics, in his book False dawn, the delusions of global capitalism, says: “The free market is a construction of state power. The idea that free markets and minimum government go together … is an inversion of the truth. Since the natural tendency of society is to curb markets, free markets can only be created by the power of a centralized state. Free markets are creatures of strong government and cannot exist without them.”
This is as true in the US, the great champion of laisser-faire, as anywhere else. Says Gray: “American government has never observed a rule of non-interference in economic life. The foundations of American prosperity were laid behind the walls of high tariffs. Federal and state government were active in building railways and highways. The west was opened with an arsenal of government subsidies. Outside the economic sphere, American government was more invasive of personal liberty in the pursuit of virtue than that of any other modern western country. No other modern western state, for example, has attempted the enforcement of Prohibition. To represent the United States as a country with a history of minimum government requires considerable imagination.”
Laisser-faire is therefore an ideology not an accurate description of what takes place in reality. Even as an ideology it has only been in a position of ascendancy twice in modern history – from 1870 until 1914 and in the 1980s and 1990s. Paul Hirst and Grahame Thompson argue in their book Globalization in question that recent developments in the world economy are in some ways less far-reaching than in the previous laisser-faire epoch. They argue that there are no true transnational corporations, all have their headquarters in a home country, and that many corporations, particularly Japanese ones, don’t readily transfer their R&D or high value-added production to other countries. They are also sceptical of the profundity of changes wrought by information technology.
“We have shown that the international financial penetration of the UK and other economies (in terms of openness to capital flows) was greater between 1900 and 1914 than it was in the late 1980s, and similar results emerge from foreign trade as a percentage of GDP,” write Hirst and Thompson. “Thus it is important to remember that the international economy was hardly less integrated before 1914 than it is today. Financial and other major markets were closely integrated once the system of international submarine telegraph cables was in place and in a way not fundamentally different from the satellite-linked and computer controlled markets of today. Commentators sometimes forget that today’s world economy is not unique.”
Is it going to end badly?
Although laisser-faire is not what it seems, it is true that the ability of companies to site production plants anywhere in the world and the growth in quick-moving portfolio capital are significant developments. The earlier period of laisser-faire ended with rival nation states fighting World War I. Will the current epoch end as badly? Although a world war is unlikely, the far-reaching social consequences, and a possible backlash arising from them, is an issue hardly touched on by many analysts. This is a great failing, not from the moral aspect which is not an issue in an objective analysis, but from a theoretical perspective.
Economic systems in which a large number of people experience pain not gain are inherently unstable. Laisser-faire has produced great upheavals through restructuring and job losses, and the benefits have been unevenly spread. Developed-country governments have increased their welfare spending to cope with this. Emerging market governments face much greater challenges and their success or failure in dealing with them will be a major determinant of future outcomes in the world economy.
Said Anthony Giddens in his first Reith Lecture in the 1999 series, which dealt with globalization: “Globalization, some argue, creates a world of winners and losers, a few on the track to prosperity, the majority condemned to a life of misery and despair. And indeed the statistics are daunting. The share of the poorest fifth of the world’s population in global income has dropped from 2.3% to 1.4% over the past 10 years. The proportion taken by the richest fifth, on the other hand, has risen from 70% to 85%.”
As with laisser-faire at the national level, laisser-faire at the global level requires a lot of state power to hold it in place. Hirst and Thompson point out that this has been most possible when there has been a world hegemonic power to underwrite the system – Britain in the first era, now the US, which exercises its power both directly and through organizations such as the IMF and World Bank. Thus an opinion on the longevity of globalization may also be an opinion on the current status of US power.
“The international economy has been most open, it appears, when the trading system has been sustained by a hegemonic power which for reasons of its own perceived interests was willing to accept the costs of underwriting the system. If the globalizers are correct [with economic laws taking precedence over the political], then all this is about to come to an end,” writes Hirst, professor of social theory at London’s Birkbeck College, and Thompson, senior lecturer at the UK’s Open University.
The most remarked upon facet of globalization is the large and volatile capital movements it has created. These are certainly not insignificant, but on their own they are not responsible for either undermining the role of national governments in emerging markets or causing the recent crises. The problem in emerging markets has been the weakness of the state and the inability of governments to carry out macroeconomic management over an extended period. The emerging markets crisis did not come about because the Thai government refused to devalue the baht, for example. A successful response to globalization by emerging markets will require a strengthening of state power.
In a book called The myth of the powerless state, Linda Weiss, an associate professor of comparative politics at the University of Sydney, argues that so-called globalization will enhance state power, not reduce it. She notes the key role of the state in laying out the conditions by which a society can increase its investible surplus as opposed to mere redistribution. “Far from becoming an anachronism, state capability has today become an important advantage in international competition. State capacity refers to the ability of policy-making authorities to pursue domestic adjustment strategies that, in cooperation with organized economic groups, upgrade or transform the industrial economy. Such strategies encompass both structural shifts: from declining to expanding sectors, as well as technological diffusion and innovation; and the creation of new industries, products and processes.”
Dirigisme disintegrates
Problems started in east Asian countries when governments that had run industrial policy were unable to adapt it to new conditions, globalization being one. The old system that broke down in a country such as Korea involved government targeting industries and providing cheap finance to selected entrepreneurs (which became known as cronyism), who were free to run businesses along competitive lines. But after the government’s ability to direct investment withered, South Korea’s chaebol, for example, started investing where they pleased using cheap government money.
“The results are now all too clear: a weakening of state capacity, the slowing of industrial and technological upgrading, and substantial overinvestment in mature industries,” says Weiss. “On this reading, the Korean crisis shapes up as a crisis, not of a strongly intrusive state, but of weakened institutional capacity for governing the economy.” The south-east Asian countries – Thailand, Malaysia and Indonesia – never had as much control over investment and instead of the countries’ investible surplus going into productive sectors it went into property and other types of speculation, along with a lot of newly available foreign money, creating a bubble economy.
“The relatively weak transformative capacities of these states have assisted in the massive inflation of asset values that rapid growth and easy money allowed,” says Weiss. “The south-east Asian economies have thus become ever more vulnerable to the disruptive potential of the global money markets. Viewed from this perspective, the south-east Asian crisis provides little support for the thesis of ‘strong states at the mercy of global markets’. If the state turns out to be part of the problem in this setting, it is a problem of too little state capacity, rather than too much involvement. This is what has left these countries vulnerable to global (and domestic) speculators.”
The lack of banking supervision in east Asian countries, often cited as a contributor to the crisis, can also be seen as evidence of deficiency of state power. But it’s a moot point whether things would be any better now if the south-east Asian states had had increased power to direct investment. They might have redirected more of their investible surplus into production that further exacerbated current problems of over-investment.
A crisis of over-investment
Kenneth Courtis, chief economist and strategist for Deutsche Bank in Asia, says in a paper entitled “The deflation that was and the reflation ahead”: “At its core the global emerging-markets crisis is a crisis of over-investment. Indeed, that is one of the principal characteristics of the world economy today. From steel to cars, from wood chips to computer chips, from toothpicks to toothbrushes we have the capacity to produce more than we currently consume.
“… We can today make around the world, some 60 million cars annually, yet we are purchasing about 45 million. That means that world excess capacity is greater than the entire output of western Europe! The result of course is that less than a third of the world’s 40 largest car producers are cashflow positive.”
There are two ways out – either close down the excess car plants or create new buyers of cars. Both will happen but it is the latter which is the more interesting. The US cannot continue to be the demand engine for the world economy indefinitely. It is now the only global superpower and a weakening one in spite of its robust domestic growth. But attempts at concerted demand management between major economies have a poor track record, again illustrating that the nation state, and its unique interests, remain paramount in world affairs.
There has to be demand creation elsewhere and the emerging markets have the most scope. The producers will have to become consumers and this implies a stronger role for government. Take a country such as Brazil which has 160 million people, around two-thirds of whom are outside the mainstream consumer economy. Brazil has a weak state that collects too little in taxes, especially from the wealthiest part of the population, and spends a lot on civil-service pensions and higher education that benefit only a small number of people.
The opportunity for Brazil and other emerging-market countries to develop as export-oriented economies is limited in the current climate. Asian countries achieved this during the Cold War when the US opened its market to the region to help prevent countries from going communist. Considerable amounts of production were anyway being relocated from the developed countries to the emerging markets and Asia had the right conditions to take most of it. Internally, populations were prepared to make sacrifices in terms of forced savings and low consumption that made the so-called Asian miracle possible. Brazil and many other emerging markets, including contemporary Asian ones, are not or are no longer in these circumstances. Brazil will have to strengthen its internal market and ensure that Brazilian companies are competitive enough to play a strong role in serving it. This involves an expanded role for the state in redistribution and regulation of business. It doesn’t mean going back to the import-substitution policies of the 1950s and 1960s which were successful for a time but, like the Asian export model, eventually floundered as conditions changed.
In order to strengthen themselves governments from all over the world, not just in the emerging markets, have to regain legitimacy which has been often lost through past bad management and profligacy. That’s why everywhere there is a trend for laying down the rules of government and ceding powers to higher or external authorities. Observing the Maastricht criteria, the UK’s handing over of monetary authority to the central bank, Argentina’s currency board system – all are ways of strengthening the state and do not represent a loss of power. A sovereign state can take back these powers any time it chooses.
Says Drucker in an article entitled “The global economy and the nation-state”: “The unrestrained financial and monetary sovereignty given to the nation state by floating exchange rates 25 years ago has not been good for government. It has largely deprived government of its ability to say no. It has transferred decision-making power from government to special interest groups. It is largely to blame for the precipitate decline in confidence in and respect for government that has been a conspicuous and disturbing trend in almost every country. Paradoxically, losing its fiscal and monetary sovereignty may make the nation state stronger rather than weaker.”
The need for legitimacy
The nation state of the 21st century has to respond to many different pressures both from inside and outside the economy. The IMF, as well as proponents of laisser-faire orthodoxy, have been accused of ignoring the political realities of internal pressures. Governments cannot afford to do this if they wish to continue in office. Even under conditions that are not democratic, governments still need to retain legitimacy and have to balance and broker demands from diverse interest groups (ceding powers is but one response), including the large parts of the population who receive no direct benefits from globalization. How states deal with internal conflict will be a large determinant in the kinds of social and economic system that evolve. The different circumstances and their varied responses will ensure that no singular economic system will triumph. They will combine use of the market with state intervention in new and different ways.
Gray says in False dawn: “The consequences of this spread of modern means of production and communication throughout the world are practically the reverse of those that are confidently expected by the Washington consensus. It means a metamorphosis of the American free market rather than its universal replication. It is more likely to engender a new international anarchy rather than recapture the supposed harmonies of the 19th-century system; and it permits the appearance of new types of capitalism, most of which differ sharply from the free market. The most successful economies in the coming century will not be those that have tried to graft American free markets onto the stem of their native cultures; they will be economies whose modernization is indigenous.”
Russia is an example of where an attempt to impose instant laisser-faire has gone wrong. The Chinese experience, by contrast, shows the possibilities for absorbing parts of market philosophy while rejecting others. The next century will see new and interesting hybrids develop taking account of the reality of saturated export markets and the need to boost domestic demand.
Adds Gray: “Globalized markets do not project the Anglo-American free market throughout the world. They throw all types of capitalism – not least the free market varieties – into flux. Anarchic global markets destroy old capitalisms and spawn new ones, while subjecting all to unceasing instability.”
The response of emerging-market governments will be to increase their redistributive role but probably in a more responsible way than in the past. The intention may be to buy their way out of social discontent without incurring the wrath of the IMF or foreign investors. The effect will be to boost world demand.
Revenge of the knowledge workers
Developed countries are not free from discontents and may still have to expand or modernize their own welfare systems as a way of satisfying sections of the population. According to Drucker some of the tension that governments and businesses will have to mediate will be from the knowledge workers spawned by new technology.
In Management challenges for the 21st century, Drucker argues: “Businesses will increasingly have to satisfy the interests of their knowledge work employees – or at least put these interests high enough to attract and to hold the knowledge workers they need, and to make them productive.” This idea leads Drucker to an even more startling conclusion, at least for those who see the pre-eminence of shareholder value as a permanent condition. “The emerging American theorem that businesses should be run exclusively for the short term interest of the shareholder is also not tenable, and will certainly have to be revised.”
Governments have to contend with these internal tensions while at the same time dealing with new external ones, the well-publicized ones of global capital flows and hedge fund activities. This article argues that there are broader issues such as the level of world demand and local social discontent that are bearing down more heavily on governments. But clearly capital flows are important.
A lot of the discussion centres around reform of the international financial architecture. Since the Bretton Woods institutions were designed for a different era, one in which US hegemonic power was more secure, it’s not surprising they are unsuited to the new environment. But it may be that as re-regulation occurs – both nationally and internationally – following the end of laisser-faire, that it takes place in quite different institutions.
One mindset, bred by laisser-faire, that has to be overcome is the idea that markets are supreme and nothing can be done to curb their excesses. Hirst and Thompson describe this as “the pathology of over-diminished expectations”. “The notion of an ungovernable world economy is a response to the collapse of expectations schooled by Keynesianism and sobered by the failure of monetarism to provide an alternative route to broad-based prosperity and stable growth … [but] many over-enthusiastic analysts and politicians have gone beyond the evidence in over-stating both the extent of the dominance of world markets and their ungovernability.”
Anne Marie Slaughter in a paper entitled “The real new world order” argues that where the reform action is really taking place is not in the international financial institutions (IFIs) but in specialized intergovernmental forums. She describes this as the new transgovernmental order.
“The state is not disappearing, it is disaggregating into its separate, functionally distinct parts. These parts – courts, regulatory agencies, executives, and even legislatures – are networking with their counterparts abroad, creating a dense web of relations that constitutes a new, transgovernmental order,” writes Slaughter, professor of international, foreign and comparative law at Harvard Law School. “Today’s international problems – terrorism, organized crime, environmental degradation, money laundering, bank failure, and securities fraud – created and sustain these relations.”
One of the best instances is the Basle committee of banking supervisors. which is looked upon by many as the correct forum to deal with the hedge-funds issue, for example, by controlling bank lending to the funds. Another example is the Pinochet case which indicates how international law and treaties have developed to the extent that certain crimes committed in one country can be tried in another.
Sherman Carroll, director of public affairs for the Medical Foundation, a UK charity concerned with torture victims, believes that the reluctance of governments to have such cases conducted in their own courts, even though they are signatories to the treaties, will hasten the establishment of an International Criminal Court. “These kinds of cases put national governments on the spot and the way for them to get rid of the hot potato is to throw it to an international court,” he says. “It is a willing giving up of sovereignty.”
The disadvantage of the IFIs is their diverse range of interests and their politically loaded shareholder structures. Transgovernmentalism, by contrast, is about specific solutions to specific problems. It also “leaves the control of government institutions in the hands of national citizens, who must hold their governments as accountable for their transnational activities as for their domestic duties,” says Slaughter. But even if the IFI route is taken this is not the equivalent of building a world government and does not signify the decline of the nation state.
An international polity
Say Hirst and Thompson in Globalization in question: “The emerging forms of governance of international markets and other economic processes involve the major national governments but in a new role: states will come to function less as ‘sovereign’ entities and more as the components of an international ‘polity’. The central functions of the nation state will become those of providing legitimacy for and ensuring the accountability of supra-national and sub-national governance mechanisms.”
Whether the trends of the 21st century are good or bad – to finally put in some value judgements – depends largely on how you feel about the role of government. If modern government is seen as a benign force, bringing civilized values to all areas of social life, protecting the weak from the strong, instituting the rule of law and defending essential freedoms, then there is a lot to take heart from in impending developments. But if you think that big government is oppressive, restricting personal liberty, taxing and spending too much and generally getting in the way of free enterprise, then the next century looks bleak. Nation states throughout the world are set to play many different and varied roles in the years ahead, juxtaposing their own national cultures and domestic demands with those of the international market, but one thing is for sure: government is getting bigger and the nation state is here to stay.
References: Management Challenges for the 21st Century, Peter Drucker, HarperBusiness, 1999; The End of History, Francis Fukuyama, The Free Press, 1992; “Putting global logic first”, Kenichi Ohmae, Harvard Business Review, 1995; three articles in “Is global capitalism working”, Foreign Affairs 1998 – “The real new world order”, Anne-Marie Slaughter; “The global economy and the nation-state”, Peter Drucker; “Power and interdependence in the information age“, Robert O Keohane and Joseph S Nye; Globalization in Question, Paul Hirst and Grahame Thompson,
Blackwell 1996; The Myth of the Powerless State, Linda Weiss, Blackwell 1998; False Dawn, The Delusions of Global Capitalism, John Gray, Granta Books 1998.
| Merchandise trade flows as a proportion of originating trade-bloc country GDP (1996) | |||||
| To | |||||
| From | North America | Western Europe | Japan | East Asia | Japan & East Asia |
| North America | 3.5 | 1.9 | 0.9 | 1.4 | 2.3 |
| Western Europe | 1.9 | 16.9 | 0.6 | 1.2 | 1.8 |
| Japan | 2.4 | 0.6 | 3.0 | 3.0 | |
| East Asia* | 1.4 | 1.3 | 2.0 | N/A | |
| Japan & East Asia | 3.8 | 1.9 | 2.0 | ||
| *East Asia: China, Hong Kong, Taiwan, Korea, Malaysia, Thailand, Singapore. | |||||
| Source: WTO Annual Report 1997, Volume II | |||||
