Avoiding the Pitfalls of Industrial Policy: Program Design in MENA and East Asia

Author(s):  
Marc Schiffbauer ◽  
Abdoulaye Sy ◽  
Sahar Hussain ◽  
Hania Sahnoun ◽  
Philip Keefer
2000 ◽  
Vol 03 (04) ◽  
pp. 491-518 ◽  
Author(s):  
Erh-Cheng Hwa

This paper attempts to explain why Taiwan was able to cope with the East Asian financial crisis more successfully than other economies in East Asia. It pinpoints Taiwan's competitive industrial sector as the most likely relevant underlying factor. It also shows that while sound macroeconomic policy and prudent financial policy all contributed to allowing Taiwan to avert the crisis, an effective industrial policy that fostered industrial restructuring, strengthened industrial competitiveness, as well as helped to restore macroeconomic equilibrium, was the most instrumental factor.


Author(s):  
Rajah Rasiah

The latecomer industrialization thesis has acted as a powerful instrument in promoting industrialization. However, there is little explanation in the literature as to why some economies that attempted to industrialize are facing premature de-industrialization. This chapter provides an assessment of industrialization in the South East Asian market economies of Indonesia, Malaysia, the Philippines, Singapore, and Thailand, examining policies that spurred either strong or little technological upgrading. Driven by an agile state, Singapore managed to become a developed economy through strong industrial upgrading. Malaysia launched upgrading policies, while Indonesia, the Philippines, and Thailand introduced ad hoc strategies to support technological upgrading. Foreign transnational corporations have played a major role in stimulating manufacturing expansion in these economies. However, while all five countries have begun to experience de-industrialization, Singapore’s de-industrialization has been accompanied by strong technological upgrading, while the remaining four countries remain stuck in the middle-income trap owing to a lack of technological upgrading.


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