Building Institutional Capacity in Southeast Asia: Regional Governed Interdependence

Abstract

I. Introduction The Japanese nation-state has created regionwide in association with the nation-states in Southeast Asia. Japanese government officials, perhaps particularly from the Ministry of International Trade and Industry (MITI), renamed the Ministry of Economy, Industry and Trade (METI) in 2001, consider that a close government-business relationship facilitates more rapid economic than the laissez-faire market system. The literature on the focuses on policies. However, the essence of the can be seen not only in the domestic matter of industrializing or restructuring industry, but also in the international strategy of the state. This study argues that the Japanese nation-state has been building institutional capacity in Southeast Asia to foster, in effect, the regionalization of the Japanese developmental or a interdependence of the Japanese state, ASEAN member states and Japanese capital throughout the region. In so doing, the Japanese governmentbusiness relationship has taken the initiative, particularly in developing small- and mediumsized enterprises (SMEs) within Southeast Asia, in transferring technology selectively, fostering human resource and expanding and elaborating physical infrastructure. The regionalization of Japanese production networks has been simultaneously a project of developing institutional and technical capacities under the guidance of the Japanese and capital. This study begins with identifying the concepts of the developmental state and interdependence in East Asia. A second issue to be examined is the form of expansion of interdependence in Southeast Asia. A committee known as AEM-MITI/METI Economic and Industrial Co-operation Committee (AMEICC), the joint product of the ASEAN Economic Ministers (AEM) and MITI/METI will be represented as an exemplar of the regionalization of governed interdependence, and as an illustration of how this and its implications are to be understood in politico-economic terms. II. Governed Interdependence in East Asian Developmental States Developmental theorists (or statists) stress the importance of guidance and intervention in economic development. They argue that the remarkable aspects of Northeast Asian industrialization, in particular that of Japan, South Korea, and Taiwan, were brought about not by market forces but by the role of the in cooperation with private capital. Development was achieved by management of the market, industrial strategies, public investment, and export strategies reflecting state-business co-operation. The notion of the was articulated by Chalmers Johnson (1982) and adopted by Amsden (1989), Wade (1990), and Weiss and Hobson (1995), among others. Johnson's contribution was to raise an alternative explanation of economic to that being purveyed by the American-dominated development economics literature of the time. In Johnson's perspective, Japan's performance challenges that of the AngloAmerican free economies and also challenges claims made for the capacities of socialist economies. In regard to the state-business relationship in the states, Johnson (1999, p. 60) mentioned that [t]he concept developmental state means that each side uses the other in a mutually beneficial relationship to achieve goals and enterprise viability. When the is working well, neither the officials nor the civilian enterprise managers prevail over the other. The government-business relationship in East Asia has been more institutionalized than that of other nations. Weiss and Hobson have subsequently described the mutually beneficial relationship as the interdependence of and business (Weiss and Hobson 1995; Weiss 1995 and 1998). …