Global Policy Forum

by Kenichi Ohno

For developing countries, globalization is far more than increased contacts with the rest of the world through economic liberalization and information technology. With strong and weak countries, power distribution in the real world is highly asymmetric.

Integration of a developing country into the world economy hardly affects the societies and ideas of industrialized nations, whereas developing countries are forced to undergo fundamental changes. For them, globalization is tantamount to transforming themselves under intense external stimuli so that they can be incorporated into the global system.

This task has to be accomplished without losing one's national identity. Developing countries are experiencing the same challenges that Japan encountered in the second half of the 19th century when it opened its doors to the outside world after long isolation.

Vietnam, which I have been advising in the last several years, also has undergone drastic changes. Around 1993, it broke loose from self-imposed isolation and rejoined the world economy. Since then the number of foreigners has increased greatly. Through investment, aid and tourism, foreigners are now the main driving force of the Vietnamese economy.

Virtually all houses facing city streets have been converted into shops and restaurants. Souvenir shops targeting Japanese women have emerged in great numbers. The Vietnamese government is aware of the country's economic position in the international pecking order, and understands the severity of international competition. In principle, it is willing to actively participate in the global economy.

Its biggest problem is an inability to come up with effective, concrete measures to meet this challenge. If all trade barriers were removed without careful preparation, most domestic industries would surely collapse, and a social crisis would result.

Naturally, the government wishes to strengthen at least some of the industries before trade liberalization bites. But it is taking too much time for Vietnam to choose candidate industries or appropriate measures to support them.

Some Western donor countries and international organizations often try to fit the complexity of development problems into a simple mold. When compelled to choose between a free economy and a controlled economy, most people would opt for the former. Yet this kind of abstract debate is useless, even harmful. What developing countries need is not a general solution but a concrete mix of market and government that suits the individual case. Models and data analysis are fine, but to understand what works and what does not in the context of a particular society, one must somehow become a part of it until one can hear the voice of that society.

The drama that unfolds when a society - a complex organic form, as it were - meets another society cannot be described adequately with a single framework. In development, it is even possible that two conflicting ideas - reform and tradition, for example - are equally valid and important. This irrationality is healthy and should be welcomed. In the 21st century, societies that can live with a great amount of irrationality may be more resilient than those with less tolerance.

Japan is the world's largest provider of economic assistance and has also begun to give policy advice on development in recent years. And the Japanese people are becoming more active in nongovernmental organizations to help the poor in the developing world.

To succeed in these endeavors, it is imperative to mobilize all human faculties, including not just reason but also will, feeling, intuition and passion. At the same time, Japan must decide how to cope with the influential powers in the West that tend to apply a universal strategy to all developing countries.

The writer, an economist who teaches at the National Graduate Institute for Policy Studies in Tokyo, contributed this comment to the International Herald Tribune.

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