Pacific Perspective
Pacific Perspective
During the recent meeting of the Association of Southeast Asian Nations, the Bush administration stressed the United State's commitment to Asia. It is Southeast Asia's major trading partner with the largest or the second-largest trade volume with nine of the 10 ASEAN states. The case for
liberalizing economiesThe financially strapped Southeast Asian nations were strongly urged to foster economic growth by liberalizing and privatizing their economies, and creating a stable environment and transparent business practices. "The Americans wanted to make sure that we got the message that restructuring and reform had to be accomplished," noted Nitya Pibulsongram, a senior Thai Foreign Ministry official.
Privatization is difficult for command or quasi-command economies to implement because it requires two fundamental principles:
>> A concept principle of what to do, and
>> A process principle of how to do it.
Although the scale of privatization now under way, especially in Eastern Europe, is unprecedented, a mere commitment to the privatization concept alone cannot provide the impetus for economic growth, because the process principle of how to implement the right liberalization framework is costly in sociopolitical terms.
For example, should the liberalization and privatization process proceed "step-by-step" by creating the parameters of private enterprise within a framework of stable prices, or should it proceed in a "sink-or-swim" fashion by allowing free wage and price fluctuations? Furthermore, how does the liberalizing nation create a social safety net that protects the unemployed, the sick, the old, and the disenfranchised, and avoids subsequent political turmoil?
In order for ASEAN command or quasi-command economies to make the transition, they need to break the sociopolitical grip of archaic, corrupted, nepotistic, and ineffective management and marketing practices.
Only business management education adapted to specific cultural and environmental settings can unfreeze the assumptions, values and philosophies of the Old Order business practices and, through a learning feedback mechanism, establish and refreeze liberalized, transparent business practices.
George S. Vozikis is the Davis D. Bovaird Endowed Chair
of Entrepreneurial Studies and Private Enterprise at the
University of Tulsa and a visiting professor with the Pacific
Asian Management Institute and the Department of
Management and Industrial Relations, College of Business
Administration, University of Hawaii at Manoa.