Japanese model re-examined

  • Letters
  • Saturday, 11 Jan 2003

It has been 20 years since Malaysia adopted the Look East Policy. Some of the romance may have worn off, but we think there are still benefits to be gained. However, globalisation may prompt Malaysia to reconsider, writes PROF LEE POH PING. 

AFTER two decades, the Look East Policy may no longer hold any more allure for Malaysia and indeed elsewhere. 

In part this is due to the passage of time. 

Twenty years is time enough for any romance Malaysia might have had with the model in the beginning to wear off, especially when the problems associated with the implementation of the policy become evident. 

There are also two other reasons. 

One is the economic stagnancy Japan has been, and still is, experiencing since the Japanese economic bubble burst in the early 1990s. 

The ensuing decade has exposed the inability of the model the Japanese practised to overcome this stagnancy, let alone continue to bring about high economic growth for the Japanese economy.  

The politicians who are supposed to provide the stability for policy implementers, or the bureaucrats, to manage the economy have turned out in the public eye to be a squabbling and corrupt lot. 

The bureaucrats have shown themselves unable to guide effectively the economy to a new era.  

And some of the most hallowed structures, like the keiretsu, and practices of Japanese business, such as lifetime employment and seniority, are now under siege.  

The other is the Asian economic crisis.  

While the crisis and the Japanese model, and indeed the Japanese economic stagnancy, would seem unrelated, there nevertheless were incessant criticisms by many, especially Westerners, that the crisis has as one of its sources state management of the economy.  

And this state management was held by these critics as resulting from the practice of the Japanese model, whether the affected Asian countries had been consciously following that model or not. 

Such criticisms, valid or otherwise, had a negative effect on the attractiveness of the model. 

Despite all these, Malaysia recently stated it has not completely abandoned the Look East Policy. 

It will continue to learn from Japan even if only to find out where it has gone wrong. 

Moreover, Malaysia Incorporated, adapted from Japan Incorporated, has not been a failure as, according to Malaysian leaders, it has helped race relations in Malaysia.  

How does one make sense of all these?  

One way to look at it is to distinguish between the capacity of the model to deliver high economic growth, to help conquer markets, and to stimulate managerial and technological innovations from that of maintaining social-cultural values and developmental aims.  

It is clear that the Japanese model cannot deliver the former results any more. Japan is no longer in a high growth mode. 

The West no longer feels the threat of Japanese exports as it did a decade or so ago. 

And in many industries, in the automobile sector even, Western industries have closed the gap in many areas where the Japanese had managerial and technological leads. 

One needs only to be reminded that one of the most important public policy initiatives of Malaysia in recent years, the Multimedia Super Corridor (MSC), was not based on any Japanese example. 

If there were any example the MSC was based on, it probably would have been the Silicon Valley of America. 

But the model is also about helping maintain the socio-cultural values of society. 

Businesses strive to maintain full employment even if profitability may be affected as too many people thrown out of work can affect social harmony. 

At the same time, many businesses believe that workers, who have demonstrated loyalty to a company, should not be given the sack because of temporary downturns in the business. 

Moreover, the ultimate purpose of the state, under the model, when helping strong businesses prosper and the weak ones fade away, is to ensure a strong country.  

The goal was as much political, or developmental, as economic. 

Thus Malaysia will continue with the Japanese model for these socio-cultural and developmental reasons. 

If the state had not been able to competently guide the economy anymore, it can at least ensure that the economically weak will be given a chance to survive and to be involved in projects that will help modernise the country. 

And if the economy is bad, the model could be used as a justification to ensure that retrenchment would not be undertaken in the kind of ruthless style normally attributed to Anglo-American capitalism. 

The question ultimately arising is the length of time a nation can hold on to such a policy if the economy remains stagnant. 

Implicit in such a policy is that if one retains the loyalty of the employee, one can ensure that he will work ever harder to help his company through thick and thin.  

And also if the state helps develop an economy the country will benefit in the long run.  

Such will enable the nation to last out the economic stagnancy.  

Yet that does not seem to be the case in Japan now, what with its long period of the economic doldrums. 

This is casting into doubt the ability of Japan to hold on to their model without sinking into a dangerous economic situation.  

In this respect Malaysia has a better record of growth in the past decade than Japan and hence better able to continue with the socio-cultural and the developmental aspects of the model.  

Yet with the onslaught of globalisation, particularly that of the march of Anglo-American capitalism, Malaysia’s ability to continue with the model remains in question. 


  • Prof Lee Poh Ping is director of IKMAS, UKM 

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