Global Competitiveness and Industrial Growth in Taiwan and the Philippines PDF
Preview Global Competitiveness and Industrial Growth in Taiwan and the Philippines
�\�1fl&�S' bq °\�\ <r- '"' 9-.� 7;0 ' 2, r-\b GLOBAL ■ COMPETITIVENESS ■ ANDI NDUSTRIAL ■ GROWTIHN ■ TAIWAANN D ■ THEP HIILPPINES Cheng-KTuioa n UniverosfPi ittyt sburgh Press PittsbaunrdLg ohn don ToD arweTns ao whsoa crisfiocm eudcf hot rh bioso k Publisbhyte hdUe n iverosfPi ittyt sbPurregsPhsi ,t tsbPuar.g1,h5 ,2 60 Copyri©g 1h9t9 U5n,i verosfPi ittyt sbPurregshs Alrli ghrtess erved Manufactiuntr heUed n itSetda toefAs m erica Prinotnea dc id-free paper LibroafrC yo ngrCeastsa loging-inD-aPtuab lication KuoC,h eng-T1i9a5n7,- Globcaolm petitiavnedn eisnsd ustriinTa ali wgaarnnod tw hteh PhilippCihneensg/- TKiuaon. p. cm.- (Pistetr iienps o liacnydi nstitusttiuodniaels ) Inclubdiebsl iogrraepfhneicrceeaasnl di ndex. ISBN0 -8229-3(8a6lp0ka-.pX e r) I.Industries-T2a.Ii nwdauns.t riiepsp-iPnh3ei.slI .n dustrial policy-Tai4w.Ia nnd.u sptorli-iaPclhy ilippIi.nT eist.l e. IIS.eries. HC430.5.K18989155 " 338.0951d2c42'09 - 94-39789 CIP A CIPc atalroegcuoefor rdt hibso oiksa vailfarbolme thBer itLiisbhr ary. EurospLaonn,d on Contents LiosfTt a balneFdsi gu1rxe s Prefaxcie 1 Introd3u ction 2 InstiatnuGdtl ioobCnaoslm petit2i5v eness 3 NatiCoonmapla roifTs aoinwa anntd h Peh ilip4p9i nes 4 TheT extIinldeu s8t7r y 5 TheP lywIonoddu s1t2r8y 6 TheE lectIrnodnuisc1ts6r 5y 7 Conclu1s9i9o n Appendix 213 Notes 217 References 235 Index 259 Tables 1-1S.i milaArmiotnTigae isw tahnPe,h ilipapnidnes, SouKtohr ien1a 9 06 2-1T.yp oloogfIy n stitutions 3-1E.c onoImnidci coafTt aoirwsaa nntd h e Philippines 3-2C.o mparoifEs coonn oPmeircfo rmance Among TaiwtahnPe,h ilipapniOdnt ehsCe,or u ntries 4-1G.r owRtahti enS caolfTe e xtIinldeu isntt rhye PhilipapniTdna eisw an 4-2G.r owRtahti enC ottFoanb rPircosd ucotfion VariCoouusn tries 4-3T.a iwaTne'xstP irloed uicnte hr1es9 50s 5-1.G rowRtahto efT aiwaPnl'ysw oIondd ustry 5-2G.r owRtahto efP hiliPplpyiwnoIeon dd ustry 5-3G.r owRtahti enP lywPoroodd ucotfVi aorni ous Countries 5-4A.s sociSattrieononfgTa tPlhM EA 6-1R.e venoufTe EsA MAa nTdC SA 7-1I.m paocfSt t aItnes titounIt nidounssGt rroiwatlh 7-2I.n stitauntIdin odnussG trroiwiatnlTh a iwan 7-3I.n stitauntIdin odnussG trwrotiihanl t he Philippines A-1M.a rkFeltu ctuaantIdin odnussG trroiwatlh Figures 2-1.G ame-StrRuecltautriaoAlnm sohnIignp sst itutions 7-1T.he oroifPe osl iEtciocnaolm y A-1P.r odCuycctla ensId n dusPterrifoarlm ance ix Preface Ont hree latiboentswhteihespeno csicaile anncsdeo sc iSeatmyu,e l Huntinmgatdaoel n a udsatbaltee "mweonrtik:nts hs eo csicaile nces shoublejd u dgneoodtn loynt heiinrt ellmeecrbtiuutata l lbs yot he contribtuhtemiyao knteso a chiemvoirnpagul r po(s1e9s84"8) ,. Ironiicwtaa lHslu yn tinwgrtiotnoi'nons ng e -party trhualte (1968) habse emno sotf tceint aendda busbeypd o litainccdio aonpst ed schoolfaa urtsh oritartijoau ns ttrhieefsgiyuir pm perseo sfhs uimoann rigahntddse mocrvaatliuicent s h nea moef s ociala noedrc doer nomdiecv elopment. Unfortuntahtaeec layd,er meiscp otnoss ueca hj ustifoifc ation authoiraintihasabrmse eonn oef uneasy cMoamnpeylc aocnence. omisstosc,i olaongpdio sltisstc,ii ceanaltc icsaetupstt h oritaasr ianism an ecesesvafoirrlry e vamTphiinWrgod r elcdo nomEiveessnc. h ol arosft hlee cfotn ctehdaeat u thorriutlmaear yia acnt ucarlelayt e "dependdeevnetl opimnde envte"l coopuinntgTr hioedssee.v elop incgo untarnidfoe rsm esro cicaoluinsttwr hiiecrshe cetnrtalnys formefdr oamu thorriutlbaeur fatii alnte oda chitehveeex pected levoefel c onopmriocs phearviet ybt eolg ouons e coinndfi edence mocraIctiy su. n fortutnhaattthe e se peoopvleer lhotaohvkeee d tremenhduomuapsnr icefo rpa auitdh oritIatir sait arnaigsemd.y , howevetrh,ta htae c adecmoimcm unhiantsoy bt e eanb lteor esolve thdei lembmeat weaeunt horitaanredic aonniodsmemiv ce lopment anidsl e avtihniegs sbueeh ind. Bye xpostihmneig s conTsatirwumaeindr aacnladen alytzhien g Philipdpiisnaesset'xrspo eursi mentatTiaoinw awnaientsdhe the Koremaond eIlh so,pt eod esttrhopeyo pumlyatrth h aatu thoritar ianidsems,pi itptsoe l idteifceaiclstt hsce,u rfoere conobmaicck wardn"eWshsa.t emvaeyhr a vbee etnh bee nerfeiltastt oti hvee xi xii INDUSTRIAGLR OWTH IN TAIWANA ND THE PHILIPPINES !" cosotfas u thoritiantr hipeaa nsitRs,am"y moVnedr ncoanu tioned twdoe caadgeo"s,t hceo satpsp etaobr eg reattheatrnh bee nefits now("1 937514,H) i.ws a rnsitnhigol lltd rsut eo day. Int hlies ngatnhsdyt renaucoaudsej moiucr nDeayr,wT esna o gavmee u nreservetdo o vseurpcpnooumrmete rposuysc hological anmda tehrairadls Whiitphsho.eu ertn couraagnesdma ecnrti fice, thjiosu rwnoeuyhl adv bee eanne ndlelsosnmlgay r cThh.at th is GLOBAL reseiasrd cehv ottoeh de erx preosnslaeys s m aflrla cotfim oyn apprecainaadtp iooltnoo hg eyr . COMPETITIVENESS Durimnygr eseIah racvbhee neffirtottmeh gdeu idaanscsei,s tanacnecd,o mmebnytt hsfoe l lowpienogpR lupe i:nA gl onSzhoi,p ANDI NDUSTRIAL inCga iD,a ntCea nlSatse,Cv hea nC,u engCohne nM,i ngtong CheTn.,J C.h enY,e nlCihaenCnga, C ll arBkr,uC cuem inEgms, manudeeDl i oRsi,c hDaorndeR ra,uF la beRlilcaa,Fr edrorB earr, GROWTH IN barGae ddSetse,p Hhaegng aLridn,Hx euC, h ristHooplhoemra n, FuH u,P auHlu tchcDr.oG fatlJ,eo hnsPoent,Ke art zenstein, TAIWAANN D ChikeKuonD,ga nnLya mZ,h izLhieann Lge,oL eeC,h arLlieps sonM,a nuMeolne tsJ,a mNeos lDta,v Oi'dC onJnoohrPn,a dgett, THEP HILIPPINES WillPiaarmi sh,Q uRP,oh nigljCiu.pS pceh miDtutnecrSa,nn i dal, TanTgs ouD,a niVeelr diReorb,eW ratd eT,i wWua ngE,d win WinckQluearn,z XhieanOo l,i ve YYuafabZ uhta,nH go,n gyuan ZhuY,u nhZahnu a,n dfo rmePrh ilippineD iPorsedsaiddoe nt Macapagal. IaP paprrteitcchiuceala tarerer lfueyla, da innddge tailed commeonntt she en tmiarneu sbcyrS itpeCtvh ea Tn.,J C.h eCna,l ClarRki,c hard anDEdod nweiWrni, n ckler. Iw isthot haannkdp amyy r espteotc hto Tsaei wanaensde Philiopfpfiicnsieta aolfffsi ,n duasstsroyc iaantbdiu osnisln,ee asds erwsh og ranmtyei dn teravnidpe rwosv imdewe idt vhi tdaolc u mentbsu tw how ishteord e maainno nymboeucsa oufsp eo st authroiraintbialsumeF sotr.h fier stti miend ecadtehseh,ya tdh e opporttuotn etilhtltey r suteo (rtyh onuogatph r ettayb oowunhtea )t reahlalpyp eunneddte hr"e e nligdhetsepnoetdi sm." FinaIla lmgy r,a tteotf hufeli nasnucpipaoolfmr ytr elattihvee s, China aTntidh mCeese ,n tfoerEr a sAts iSatnu daitte hsUe n iversity ofC hicaTghoeo. p inainoednr sr iontr hsri ess eahrocwhe,va erre, myr esponasnisdbh iolunilotbdtye r egarasdt ehdoo sfte h aeb ove mentiionnsetdiio tnasunp dte rsons. 1 INTRODUCTION TheoreatnidcE amlp irQiuceaslt ions Thee conoamcihci evoefmA esniNtaesnw lIyn dustrCioaulnizing tri(eNsI 1Ci snt) hpea tshti yretahyra svi em presscsheodl ars, jour naliasndtdes c,i msaikoeanrlo slv etrhw eo rDludr.i tnh1ge9 5t0hse econocmoincd iotfti hoenNssIe C wse rneo mtu cdhi ffferroemn t othdeerv elcoopuinntpgre cirae psii:nt caow maleso twh,ie n dustrial secwtaossrm aalnlwd e aekx,p porrotd wuecrtneso c to mpetitive, balance-opfr-opbalwyeemmressene trsia onuwdso ,r kweerrusen empolyeodur nderemIpnlt oh1ey9 e6dh0.os w,e vtheercs,oe u ntries embaroknea rd a ppiadco efe conodmeivce lopTmweon-td.i git growrtahtw eesrf er equreengtilsybt yte hreecsdoe u ntirnti hees 196a0nsd1 97d0ess,p tihtteeu rbuilnet nhcweeo relcdo nomy causbeytd h tew ooi clr iAstet shb.ee ginonfti hn1eg9 9w0hsi,l e LatAimne riNcIaCansr seu ffefrrioncmgh rodneibcctr iAsseisa,n NICcso nttihneuiienr d usatdrjiuasaltn mader nrete atdojy o tihne cluobfd eveloped countries. 3 4 INDUSTRIAGLR OWTH IN TAIWANA ND THE PHILIPPINES INTRODUCTION 5 Whath acsa ustehsdeu ccoefts hsAe s iNaInC sS?o csicaile ntists ThiWrod rlndat iaonndns e wbodrenm ocrsahcoiuaelcsdc etphte havoeff erseedv eprlaalu seixbpllea natthaiedo onpsto:if lo inb eral tradbee-towfpefoe lni dteimcoaclar naedcc yo nowmeilcfaA r" eb.e econopmoilci tchiieed se,o olfoC goyn fucitahnheii ssmto,ofc r oy neovlednets pmoitg"bh eta n ecesesvafoirrlay l lla te developers. loniallainrsdem fo,r Cmosl,Wd a pro liatnitdch aseb, s eonfsc eer ious Int hbioso Ikw ialrlg ufier,st th,at tht eh eoorfty h dee velop clacsosn flTihcetsesex. p lanhaatvipeor nosv iodnelpdya rtainadl , metnaslt ahtaess e riloougsif aclwasle: i tthhedere finoiftt hieo n sometiinmceosr arnescwtteo,tr hsdi esv eloqpumeesntti on. developsmteaintsate ma bli gouroi utcsso mponheanvnteost heo Inr eceynetat rhse,es xep lanhaatvibeoe enmnso difaineiddn retical rteorl aapeticidoo nnopsmehiricfop r mSaenccoebn.ycd a,r e corpoirnaattp oeo dw ertfhueolorf py o lietciocnaoltm hyte,h eoofr y fullrye examhiinsitnorgre iccoaarnlddd so ians gt ratciofimepda ra thdee velopsmteanAttd eae.lv elopsmteacntotena tlr itbor uatpeisd tivset uodfya s uccecsassf(euT la iwaannda) fa ilceads (et he econogmriocwi tnsh e vewraayIlstc . a rne spioslti ptriecsafslru orme PhilippIi wnieleslm) p,i rirceaflutlthyeed evelopsmteanttea l antigirnotwetgrhre osustpu sca hsl andlaonriddn se ffipcrioednutc theory. erIstc. a fonr mullaotneg -dteevreml osptmreantte gitehse without Thiradnm,do sitm porItw aindltel,m onstthrtaahttr ee eo ft ypes distoorfst hioorntsp- otleirctmoi nccaelIr tcn asmn.o bialniuzdte i econoimnisct it(ultaiiosnscsel zi-efanitarenelcd,io srmp,o ratism) are liszoec rieaslo umrocreeefs fi ciIentct aalnly is.mo plemdeenvtel chmea jeoxrp lanfoartt ihsoeun csc oerfas isl uorfee c onodmeivce l opmepnotl imcoireceso nsisatneednff telcyt ively. opmeinnTt h iWrodr clodu ntTrhieie nss.t iotflu atiisosne z-faire is SinTcaei wSainn,g aapnoSdro eu,Kt ohr heaava elb le eanu thor assocwiiattrhea dpg irdo watnhdw itdhe clsiinneic,tde o enso t itasrtiaatsnee sv,et rhaelo orfit shdtees v elopsmteahntatevac elo n obstorrpu rcott tehdceot m esetciocn ofmryoi mn teironnmaaatlr ket cludtehdaa nta uthorsittaiattsreh im eaa njc oorn trtiobt uheteco or flcutuatAi colnise.n itnesltiismttau yst tiiomnu slhaotret -stuerm, nomimci raicnlt eh ecsoeu ntTrhieerse.fot rote h,de i smoafy perfigcrioawlBt uhit.t e ncourtahegexe psa nosfir oenn t-seeking belieivnde ermso crtahecexy p,e rieAnscieNasIn C ssoe fe tmos ug behavtihoarrte taercdosn ogmriocwi tnth h leo nrgu nF.i naal ly, gesatni nevittraabdlebe-e otfwfed eenm ocratica nedfc roeedom corpoirnasttiisttteu nttdiopso r no mgortoew tthhr osutgrhco onogp nomdiecv elopment. eratwiiotnht ihbneu sisneecsatsno bdre twtehegeno vernamnedn t Thitsr adteh-eosffai lsow,ni gtt hhA es idaenv elompomdeenlts , business. hahsa da ni mpaocnst o mceo unttrhiafaetcs ec riteiccoanlo mic decisCihoinnsra.e' fosr mers frloetmah rKeno erdem aond ealn d formula"tneedo -authoriinoc radtreopir ra onmiuslmtg"ha eptirero CurreEnxtp lanations graImn.t hfoer meSro vrieeptu blleiacdhsea,rv se afosrd kiecdt a Ina ddittoti hodene velopsmteatnthteea olcr uyr,re exnptl anations torpioawlte ocr o pwei tdhe terieocroantocimoningc d itEvieoinnn s . forA sieacno nopmeircf orimnacnlctuehd leei beercaoln oampics newbdoermno crsauccaihsPe osl aanntddh Peh iliptphiehnraeevs e, proaacnthdh Mea rxaipsptr oTahcihs. sgeicvateb isro ionev fe rview beedne manadnsed ff orctors e bu"isltdrl oenagd erisnoh ridtpeo"r oft heesxep lanations. salvtahgeeeic ro nomies. Ar eexamionfta hAtesi iodanen v elompomdeentlths e,r ehfoarse , signiaficcaadnetam nipdco licy imfoprtl hi1ec9 a9t0Fisio.rni ssft , LibeErcaoln omics thaeu tonosmtoatuthsee i scsio sr rienec xtp latihndeie nvge lopment Them osdti rceacuts aeffse cteicnogn odmeivce lopamreeecn ot experioeftn hcNeeI sC isnt hpea sfte wd ecadtehset,nh sea me nomifocre: x amptlhese,u ppolfcy a pital, labor, technology, and thecorabyne u setdoe xpltahiuenn succeexspsefruiloef on tcheesr infrastrTuhcept ruiraceneq.dsu antoiftt hieefassce t oarrisent urn develocpoiunngtF ruiretsh.e rimfto hrteeh ,e issic so rroetchte,r determbiync eodn sumpptaitotnei rnnvse,s trmaetnets , savings 6 INDUSTRIALG ROWTH IN TAIWAN AND THE PHILIPPINES INTRODUCTION 7 rvtaaaeiass,trg,blii e e.nsenaEr et dxsctihndr anaggeates ,n iawnr teatsr,eenfog aarerotientsi,gaba dnolirnmr o wdmenio sinngoeny,a s o nu tcedpcomlo ypnpo,maraa icmiotv dngeeavo dlethopvera n mgbeoynlerv itoefrnb eea xmentlcpoiron opntemrrt oicsevtenssi itsnonnigz.cTo en lh etesur,ehtefo dd earevi,xans et nlcaotunniaso dffo vtpca ureieolrrx rcyiendpo rct riepy ecsnst,rda iuosbnhspss,l tt iirie mNtaeeehlbnooetclr;st,etsifha sca usiiaa lblcro rn etdcsc dohytoanom ofe tmpkt liiiccsnoiacawtswllhe oed t rsa eghkpo reern xete haslpneietirlneotde snaahl ws iatieosnlnp ehta lsne imhoos mdnrpa ioffgmuoetsn re heagstenhem cofesiu cenanvet cortoao.rfi s cnroenoCdifcmcrtougio siont-rsrnw oehafmt irtt 2ohenla R.aaersosp,n lttiaser h uisffneiendrsdbptc iee t ioomtvwenneheacn glodtelf d iueqe rvb dbuelayealcool ninep oreitbvmnmeaieit islcvtcr miotna aoeow eptmrgtt,iBcis ete osnlsa s teBaonelsra e.dmsclt sooaa nienon msw ihhctecph iseer foe ervdocmenloapmoneime caccn amtopsu ngeoicsclo yo fuo enrrvsi dteteasor.pTlt mheeenb cgeotisnytnt r ehotvenege Trrayshetr,hdsioo w reo Wtvrrleser,dngali ,etns h d oCbosernevtes:dio nuutwaorrendit oant. i..led itnoeca rseinse xorptm aretk whichpo litciafalc torsm aya ffectth ech oieco f evdelpometnp olicies shar.e.s.B .yc o ntrtahsleta ,r gosesessi tnm alrksheatr weesre xepe ansdtra etgie.s rieedni cn[o cunetsrwi]h ee grovernmeinntte netronivsi nt eh maretk The lierablec onmoic view,w hichh sa beens upoprtedb ym ost mechsamin ngie neraanlpd,or te ctoniimseta essiu pnra rtiwceurtleeha r, iinttaeen retcaiootnnmoaidlcegv r eolwpotmbehen tcaa suegenic tiees n,co rugraaueesgts hs paefctieare lt artioidnzwea ail nlfe dcfai fil amobstelfaff eree -sac rctnoth ehiI rnntago utf.ere ic n noo,mcans iresgice orn ewx tpwhoh merrateret raekslh siae asrho nnaic fadmevoo p rrt cinecyT.he fre etraed tsregaytis c omposedo ft wo part:se xport subsotnih tatudht oepi posei tffeect(sB.a l1a9s8s4a, 119) pormotioan ndim portl bieralziaiont.T hee xoprt rompotino lpicyo postutlesat hastnic e teh compraaitvea dnvtaageof thele ss Alotuhgdhe rivfoermd s ophsticiaetde quaontsai nsdu popretdb y developecdou ntrie(s LOs)Cl ieisn t ehirr cihn tauralre suorces and some mepiirceavlien dce,th elib eraeclon omic view hsaa n umebro f abunntdla aobrs,uc hc ountreis hsould evdelopt hesea dnvtaaegsa nd weakensess. irFts,te horteicalde baestw ithre gartod t eh beneficial traed wihti ndustariledic zountriesfo r hteir manufactuerdo rh igh impcato fe xoprt rompotoin ndai mportl ierabilzaiotnre main.Be lol, caiptahlig,h e-chtnolgoygo ods,s nicei ndsutrliziaecdou ntreish aev a Kinleayn,Ed l sionn rgaue thaantex ported-i lnsdtiuarilzaiotn (ELI) compraatvei advtaagnient ihsa rea.Bo thtra idngp airestbe nefitf orm stregaytm aayg ragvea ptorbelms fob alea fnop cayemnts, nbualceadn tefracfedi ainentd ru oteacchmoe o w-csiahteld elPs prearcetto oo bu tottchmo erspo.d( uctAiPo arnae ntdoodu tsitcimobreut iisao. nn ) dcoeinvaocpelomml epnetitfi,tosinca m lcar iyes, enao sucnrldeaa o rgbfer efisietniscaccneyb( ,u1 itt9m 18a52ya1,sI l)o nde .ertt enr a Starndd apolirecsycr iipopnst niclued thdeev elopment fol aorb invesmtentw hen finciaaanln tdec honlogicaglas pb etween oclalan d intensiev nidsutri(esusc h s agarenmt,st extils,eh anicdarfs,ts hoes, foreginpr oduecrsa er voerwehlming.A lotuhgphr otectonim ayre ustl ande lcetnriocsas semlby)a nadrg iucltrue ropductionan d rpocessgin inin efficinecy,i mta yen couraeg inesvtmentas wellF.urt ehrmore, (sucThh es amuispgorr,tar i ibecl,recl aozffieaeo,tnr u piboelbyri,oc t fobt cahcofe,erae t nraldodg sse)tra .etgypo sut tahndec n odinusctpreaitoalf cd omsjtpumeanrtIea. dfat e dievlvovpaienng ict soua annttgtiriehtesipcse acitolia zi el nnoivln aaoortbn i laestt haltier ablziaiotnw il lneocuraeg competiti.on ibLerale ocn intensei ivnsdtuersi andarg ci ulet pruodruicotn, owh od tehye ver odmevietslspo amebnothr tirsametogprywtc h onchirto,ltsh edye rrvgieadue, f oirmllwr etusehlt inn ii wnafelrfioedikon-cicnyg, pbrceoomebme sla,ds omvceae dln niedribusateriloca nnomlaii otntsss? con n crIedsepe otnshet alo ttieerh abslet iiehoonzr ateicltpiaol infionla,at nsdt agonn.aF turithrmeore,t hiem por-tsubsttuiitonin cies hsoulbde precededb yin vestmerneth iliaatbitonm easuersw iht dustrlziiaaotn( iISstriae)tg yis a ssoacietd itwht hweor setv ili nl bieral certainl iimtde rpoteciton( WorldB an1k9 810,3,7 ). economics, ovgernminetnetrvnt einoi nth em arket.P ircedi tsortion, The secondw eakenssli es int eh mepicarleiv idenc.e" Wittehh corruipont,w asteo f esrourcse ,an di nefcfiinecyw ila llle nsue form ecxepitono fS witzrlenad ndat eh Netehrnldsa,"ec onmoic hsitorian
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