THE INDUSTRY AND TRADE COMMITTEE
7 July 1982]
Mr Peter Rees, MP, MR C B BENJAMIN and MR A DUNNING
[Continued
17
[Mr Stevens Contd.]
ent motives. For example, in Malaysia it is the "bumiputra" policy, as they so describe it, not so much that they wish to engage foreign technology and capital — though they do but that they wish to see a very high Malay involvement. Similarly in Indo- nesia, except in certain areas, they want to see eventual controlling interest with Indo- nesian interests. So, yes, there is plenty of scope for joint ventures and, indeed, in some of the countries it will be impossible or difficult for British investment to take place without some kind of local participa-
tion.
Mr Foster
6. Can I follow on the first question Mr Stevens asked? He asked how far the countries were following a policy of devel- oping manufacturing and processing indus- tries. When we went to South Korea and Taiwan, what impressed me about particu- arly South Korea was the breathtaking onfidence which they had in their ability to get economic plans and to expect that they would be fulfilled. Is there any sign of such overall economic planning intervention and confidence in these countries would you say, Minister?
(Mr Rees.) You are asking me to draw delicate comparisons between ASEAN countries and a non-ASEAN country. I do thii with the exception of Singapore, which is not a dirigiste economy but an open economy, although the Government there has a fairly clear perception of the way in which it should develop (they obviously believe they have to move up- market all the time), while the other coun- tries do certainly have plans (indeed, I was privileged to discuss many of them with their Ministers), none of them has advanced quite so rapidly as South Korean.
Mr Stevens
7. Again, Minister. excluding Singa- pore, would these countries be described properly as newly industrialising countries, that is to say, in their efforts to build up their own manufacturing base do they have deliberate policies of excluding manufac- tured imports?
(Mr Rees.) Can I first of all fasten on one particular point in Mr Stevens' question? Of course, there is no precise generally ac- cepted definition of a newly industrialised country. There are World Bank figures based on per capita GNP and I think it would be fair to say all the countries of ASEAN fall into that category. Of course,
there are considerable differences. I happen to have the figures but I have no doubt the World Bank figures are available to the Committee. I am not aware (but I would like perhaps to turn to Mr Dunning on that) whether there is any specific exclusion by any countries of any particular range of products.
(Mr Dunning.) There is no exclusion in Singapore, Singapore is an open economy, but most of the others do, in fact, protect some parts of their economy. To varying degrees they do protect their developing industries, but they have not reached yet a stage of development where I suspect one could call them newly industrialised coun- tries.
Mr Cockeram
8. When discussing trade potentials we tend to think always of manufactured goods, is there a potential for the service sector?
(Mr Rees.) Certainly. I am very strongly of that opinion and indeed when I have taken trade delegations round, since the UK economy is very strong in the service sector I have included representatives of the ser- vice sector. Indeed I can say that the Committee on Invisible Exports is going to hold a service sector conference in Indone- sia this autumn and I think that liberalisa- tion of trade in services may find a place in the agenda for the GATT Ministerial Con- ference in November in Geneva.
9. Because the figures do show, do they not, that Britain has lost out in exports of manufactured goods to ASEAN countries over the last decade compared with our competitors in Europe and North America. Would you comment on that and can you put your finger on any reason?
(Mr Rees.) It is certainly true our propor- tion of the imports has dropped, particu- larly in, for example, Malaysia and Singa- pore too. It may be that we had an unusually high proportion because of our historical connections with these two coun- tries, though that was not necessarily a factor in the Philippines, Indonesia or Thailand, and indeed the proportional drop of our exports to those countries is not so great. I think there are many strands in that particular problem. The Japanese have obviously come in very strongly into South East Asia and one would say that some- times they are prepared to bid at sacrificial prices for projects. The United States, of course, has come in fairly strong. The other
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