Recession, Islam, and Kung Fu in the Southeast Asian Economy

Copyright: Andy Buccino

"If you want to be successful internationally, you have to be very attuned to differences in people, culture, and management practices," says Dr. Khong Kim Hoong, a visiting Professor of Economics and Political Science from the HELP Institute in Kuala Lumpur, Malaysia. Cultural sensitivity and solid management practices are the cornerstone for the emerging economy. "Not everybody is a Finn or behaves like a Finn, you know people in China are different than people in Singapore...and what we do in one country may not be acceptable in another."

The first half of year 2001 showed a marked downward turn in the world's economies. This was augmented by the September 11 bombing of the World Trade Center in New York City, which amplified an already dreary outlook for the rest of 2001. Meanwhile, consumer faith in a recovering economy continued to suffer as a war in Afghanistan ensued. Economists look for solutions in the strength of existing trade routes and open markets, while counting on interest rate adjustments to stimulate new markets and re-establish a foundation for growth.

Is this a recession? How does Southeast Asia compare globally?
What will bring about recovery in Southeast Asia?
Should Southeast Asia continue to invest resources in the information technology market?

Economists gauge events in the form of business deals, natural disasters or discoveries, and war. These events can send shockwaves through an economy. Analysts try to pinpoint the effects of these events so they can make conscientious projections for the future. The Hong Kong-based Political and Economic Risk Consultancy (PERC) cited Singapore, the Philippines, Indonesia and Malaysia as the most vulnerable to regional unrest amid the global terrorism crisis in their October 23rd report. Responding to the continuing war in Afghanistan, Dr. Hoong discussed how economies might be influenced by a predominantly Moslem population and showed how other groups including the poor affect an economy directly.

With a continuing war will Moslems in Southeast Asia mobilize economically against the West?

"Global market capitalism is inherently unstable, increasing inequalities within and between countries, unless sound domestic policies are in place to ensure that everyone can gain from liberalization." - Pascal Lany, European Union Commissioner for Trade in the November 8 International Herald Tribune.

Copyright: Andy Buccino

With the complexity of the global economy, looking at regional cross sections makes it possible to make sense of a perplexing environment where tariff and trade policies have far reaching implications. The production of agriculture on rural farms is no less affected by these policies than upstart technology sectors. At the same time private interests, as in politics, determine much of the rhetoric and legislation that can stimulate or destabilize an economy.

ASEAN, the Association of Southeast Asian Nations, was formed in 1995 to stimulate free trade in the area. Malaysia is a charter member and has one of the strongest economies. The group also includes Brunei, Darussalam, Cambodia, Indonesia, Laos, Myanmar, Philippines, Singapore, Thailand, and Vietnam. Within the context of an economic coalition of nations, important comparisons can be drawn to show the significant economic benefits and hurdles presented by, for instance, the European Union.

Do you anticipate a common currency for Asia or Southeast Asia?
Is Malaysia obligated to help a "Least Developed Nation" like Cambodia?

The cultural, economic, religious and geographic differences that make up the members of the World Trade Organization and the rest of the world's economies are the keys for sustainable growth. These realities determine the nature of any business environment. There are clear differences between Finland and Malaysia that might be seen as barriers or may benefit business between these nations.

Are the different business practices between east and west barriers to global free trade?
What elements of the Finnish business environment might you impress upon students in Malaysia?

Dr Hoong was in Mikkeli, Finland on November 22 discussing the Southeast Asian economy and its position within both the Asian and global economy. His lecture, "Business in Asia" was the first for the newly created International Business Club of the Helsinki School of Economics, Mikkeli Business Campus, where he had just completed a three-week course on the same topic. It was the inaugural lecture for the Club, which will present monthly English lectures by international scholars. In addition to his position as Administrative Director at the HELP Institute, Dr. Hoong has written numerous books including "Malaysia's 1990 Elections," "The Politics of Japan-Vietnam Relations," and "Merdeica."

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