BOOK REVIEWS

Diana Hochraich: L’Asie, du miracle à la crise

The subject of this work which, like many another, was published in the midst of the Asian crisis, actually goes well beyond the crisis, the miracle and Asia, stating its dissenting intentions from the outset. Its title and back cover are good commercial slogans but may disappoint those readers who are simply seeking an analysis of the recent Asian crisis.

Diana Hochraich gives much more than a mere explanation of a phenomenon localised within a particular geographical zone. The value of the book, which could be re-entitle “For a Defence of Asia, from Miracle to Crisis”, lies in its challenge to the generally accepted view which wishes to see “only in the particular nature of these (Asian) countries the causes of their downfall”. On the contrary, the author tries to place Asian “miracle” and “crisis” in the wider context of world economic development in our century, characterised by the globalisation of production and finance.

Already in the first part, where she analyses the globalisation of financial markets, the creation and operation of oligopolies and the globalisation of key sectors of production for Asian development, the author attacks some widespread views. The assumption that finances command the real economy is, according to her, an erroneous one. “The idea according to which financial markets are anonymous is equally false” (p. 18), and “International financial institutions and governments could constrain, if they so wanted, the movements of investors” (p. 19).

Even if one does not completely share these views, her analysis of the division of the world into “developed” and “underdeveloped” countries, her explanation of the dynamics linking these “two worlds” and finally her criticism of the different models of economic development are fascinating. They are also more convincing than the widespread view of a regional crisis brought about by the specific situation of countries as different from each other as are Japan and Indonesia.

The author has a clear-cut thesis that she outlines in various ways, one of which is the study of the failure of the Asian model of development. As she stresses in the Introduction, “Oligopolitical businesses are the main vectors of globalisation. The present crisis proves that this is leading developing countries not to catch up with the richest ones, but to be subject to a crisis unprecedented in its gravity” (p. 11).

“In the wake of the First World War, the world market was already set up in its present form” (p. 151) and “the division of labour between developed and underdeveloped countries established at that time persists today more than ever. Accordingly, such industrialisation [that of underdeveloped countries] has not modified the traditional international division of labour ...” (p. 153).

This is the conclusion and also the main line of thinking of the book. Paleo-marxist? Perhaps. After presenting her theory in the first part of the book, Diana Hochraich goes on to provide examples. The comparison between the Asian financial crisis and the Latin American debt crisis, Asian development based on subordination to Japan’s and even the false immunity of China in the face of the crisis always bring us back to the same point: the developed countries have carved up the world and the different models of development followed by underdeveloped countries have all appeared to be incapable of challenging this situation. Whether it be the Asian model, based on “export-oriented industrialisation” or that of the “substitution of imports” formerly adopted by Latin American countries, for the writer none has enabled these countries to develop. Even a mix of both models, attempted by Taiwan and South Korea, has not constituted any lasting solution.

Those economists who explain underdevelopment as backwardness with respect to advanced capitalist countries seem to have been refuted forever by the failure of the Asian miracle. This approach can only lead to a criticism of the IMF, whose “formula plan” is castigated by the author, as being always dictated by the interests of Western banks rather than by those of the States that it purports to help. “Every country where the IMF has stepped in, banks and businesses have seen their troubles increase by dint of the drying up of liquidities.” (p. 133)

Are there therefore no solutions? The situation is very complex and it is not a matter of finding guilty parties. Even regional integration, considered by most observers and players to be something positive, seems to accentuate, rather than defuse the effects of the crisis. The only certainty is that the responsibilities and so the possibilities for resolving the present crisis are not all to be found among the countries most directly concerned.

Whilst she is pessimistic in many respects (“The Asian crisis is far from over”, p. 127; “Asia will no doubt go through a lost decade, or worse still, a process similar to the one undergone by Latin American countries”, p. 147), Diana Hochraich is nonetheless of the opinion that the solution is to be found in a radical shift in relations between the two worlds. “It is clear that the answer to the question of underdevelopment will scarcely be found other than through the search for another type of co-operation” (p. 157).

Whilst subscribing to this conclusion, we must at the same time do some updating and raise a question to which one would like the author to attempt a response. Compared with the time of her writing, things seem to have got better in Asia. Perhaps the crisis was not as absolute as it appeared in 1997 and perhaps also these countries have assets which are different to those of Latin American countries. The issue of specificity would therefore play a more important role than the one judged by Diana Hochraich.

But if, on the other hand, the facts bear her out, we would, like the author, come to wonder what “other type of co-operation” is imaginable in the world economic and political context for the third millennium?