The world’s ultimate vision is globalization. Countries are making efforts in order to cope up with the fast changing trends in the world’s technology, education, social and cultural affairs. In line with globalization, every country must be able to establish, build and improve its economy in the name of sustainable development. For a country or economy to be able to participate in the global market, it has to ensure that it does have what it takes to compete. A competitive market open for global trade must have been one of the most important characteristic of an industrialized country, no matter what product is being traded.
A competitive global market cannot however be build up overnight. Industrialization takes a long-term process. Industrialization involves careful and intelligent planning where several considerations, including social and environmental responsibilities are to be essentially taken into account. Despite periods of economic recessions, several calamities and political instability, the Asian economy was able to break through the bondage of extreme poverty. A number of Asian countries have been included in the list of the world’s newly industrialized countries as a result of the fast economic growth shown by these countries.
Few of them will be discussed in this paper in order to examine how their governments made their economic efforts, especially in the industrial sector efficiently work. The countries in the world are economically classified as least developed countries, developing countries (newly industrialized), industrialized and highly industrialized countries. Industrialization is measured based on a set of criteria: percentage of growth in GDP, structural transformation, industrial structure, international integration including labor and population structure.
Export structure, regional structure, sustainable development social equity, poverty alleviation, the quality of life of the people and other bases expressed in percentage and dollar values. Based on such criteria, countries are rated and of course, every country aimed at least of being classified as developing or industrializing country. Recently, Asian countries dominated the newly industrialized category composed of Malaysia, Indonesia, Thailand, India, China and Vietnam not mentioning several others. To improve in economic classification is a matter of global competitive advantage and so must not be taken for granted by the government.
The big question however is this: what are needed to be sacrificed, or expressed in different way, how much? Industrialization comes in five long-term steps: (1) preparation of the preconditions for industrialization of which the building of a market economy is the most important; (2) building the industrial base for the economy where infrastructures has to be continuously upgraded; (3) development of the industrial economy characterized by the transformation of economic structure; (4) consolidation and improvement of the developed industrial society and (5) transition of developed industrial nation to the information society.
These steps were developed by Du Doc Dinh, a senior researcher in the Institute of World Economy, and presented in his paper entitled, “SIEDCA ? The new model of industrialization for rapid growth and sustainable development in Asia” (Du Doc Dinh, 1999 pages 30-31). The said steps were little by little adapted by the countries which economically improved from being classified as least developed countries to newly industrialized countries. It is however more impressive for agricultural countries like Indonesia Thailand and Vietnam to manage to climb up to industrialization by utilizing the availability of it natural resources.
For a country to be able to produce a considerable percentage of the world’s food demand is of a great competitive advantage for an economy. Using the models of industrialization set by the above Asian countries, we will be able to appreciate how an industrializing country can sustain its economic development by maintaining and even developing as an agricultural country. Despite its continuing economic growth, Indonesia remained a vital agricultural country in Asia according to the 1Federation of International Trade Associates (FITA) country profile (January 2007).
As of 1997, Indonesia is the third of the world’s largest producer of rice, which means that Asian’s staple food is largely dependent on the agricultural efficiency of Indonesia for 30 years. FITA’s profile further revealed that the country could have been performing better if not for the El Nino phenomenon which damaged much of its agricultural production. In the 2004 statistical data released by FAO, 42% of the country’s total population is devoted to agriculture. As of 2005, palm oil, rice paddy and sugar cane remained its primary trading products.
Indonesia is a member of the World Trade Organization (WTO) and the Association of Southeast Asian Nations (ASEAN) whose share of foreign trade in its GDP is more than 70% in 2006 according to FITA. Of its main export commodities, agricultural products contribute significantly to this high GDP rate. Such agricultural products include animal and vegetable fats and oils and rubber. It is also important to stress that Indonesia’s agricultural sector employs 40% of its population and the only Asian country which is an OPEC member.
Having vast timberlands, Indonesia is able to supply 5% of the OPEC’s total oil production. Thailand on the other hand has 265% of its workforce employed in agriculture. Thai’s economy expanded from rice production to the cultivation of tropical fruits and cotton which the government eyed for export trade (UNEP, 2002). According to the Index of Total and Per Capita Production provided by 3Earthtrends, the country has a positive food and agricultural production performance rate of 46% from 1961 to 1998.
Specifically, the country had an average of 46% increase in its cereal production in a three years period from 1979 to 1991. In terms of meat production, the country had an impressive increase of 109% in 1999 to 2000. Recent reports also revealed that 64. 1% of Thailand’s workforce is employed in the agricultural sector. This data will tell us that Thailand has consistently able to encourage its labor sector to concentrate on agricultural production. The country’s efforts were not of course in vain as 10. 5% increase in its 2000 GDP has been contributed by the agricultural sector.
This would mean that Thailand was able to utilize its agricultural sector efficiently in order to cope up with the economic globalization trend. Hailed as one of the Newly Industrialized Countries (NICs) in Asia, Thailand obviously is competitively moving forward, step by step to being a full-pledge industrialized country. The most impressive performer of the industrializing countries might have been Vietnam. When Doi Moi was introduced in the country’s economy in 1986, Vietnam’s economy became one of the world’s fastest-growing in the world, radically improving its business sector since then.
5Doi Moi, which means renovation, enabled Vietnam to gain an average of 8% annual Gross Domestic Product (GDP) from 1990 to 1997. In a span of just a decade, the 300% inflation rate measured by the Consumer Price Index in 1987 dramatically lowered to 4% in 1997, according to the June 2007 report by the Bureau of East Asian and Pacific Affairs (June 2007 report). Dependent on agriculture, Vietnam efficiently utilized its available resources by investing in agricultural production which transformed its economy into the world’s second largest rice exporter in 2005 from being the net food importer in 1990.
Its double agricultural production greatly helped in the alleviation of poverty in the country, increasing average income of $220 in 1994 to $726 in 2004 ( FAO Statistical Country Yearbook, 2004, Vietnam Country Profile, pages 1-2). Another Asian country which performed well in the past decade and continuously improving is India. Seventy seven percent of India’s population is dependent on agriculture (John Elliot, 2006). This is indicative of the country’s need to focus on agricultural improvements and investment in order to support its economy, which they actually did.
Decades before, the country’s biggest agricultural problem was the fact that a large percentage of its agricultural production was not able to reach the market. This is true for the reason of lack of efficient farm-to-market road that will enable the farmers to market their products. With the help of big company investors like PepsiCo, Tesco and Field Fresh, India’s economy has gained positive increase in its agricultural production among the prominent are mushroom, grapes and other vegetables.
The said investors have been helping the country by providing subsidies of fertilizers and seedlings to be used in the production. The country carried out changes in its transportation facilities and even customs’ policies and procedures in order to effectively and efficiently hastens the transport of their produce to the international market. China has also been one of the Asian countries which opted to make improvements on its agricultural sector. In 1984, the country has reached an average of 12. 3% growth rate in its agricultural output.
China for over 21 years has maintained a 6. 5% average growth rate. In 1999, the country continued to develop and implement agricultural diversification by expanding its production to grains, oil-bearing crops including meat and aquatic products. The said radical agricultural development enabled them to 4produce 509 million tons of grains and 4 million tons of cotton 26 million tons of oil-bearing crops. In comparison with the past decades, such production increased the production of the above products by 66%, 76% and 400% respectively (Beijing International Online).
According to Congressional Research Reports for the People, China is the sixth leading foreign supplier of agricultural products to the United States in 2006 and ranked second in seafood products (CRS, July 17, 2007 report). The two-decade development efforts of the country’s agricultural sector have contributed much of their economy. China was recently hailed as one of the world’s newly industrialized countries. The country globally competes using its agricultural advantage over industrialized countries.
“Currently, the output of grain, cotton, fruit, meat, poultry, egg, aquatic product and other farm produce has leapt to world first and per capita output of grain, cotton, oil, vegetable, meat, poultry, egg and aquatic products has reached or exceeded world average levels” (People’s Daily Online, November 30, 2004). The main point of discussing the examples set by the industrializing countries is to stress the idea that these countries need not to shift their agricultural economies to other areas of production in order to gain economic growth.
The agricultural sector has a great potential in contributing to the improvement of the country’s quality of life. An agricultural country need not to convert much of its agricultural lands into industrial area in order to boost its economy like other countries. Another point is that, environmental degradation is not in anyway a necessity in order to give way to industrialization. This is because industrialization is not merely measured by how much machines have you used, or how of your agricultural lands have you converted to industrial area.
What these agricultural countries set as excellent example is their technique of using their cultural and economic tradition of producing agricultural products in order to compete in the global economy. The real basis of industrialization is how much have your country contributed to improve the lives of the people. Industrialization must not hasten any country to shift from agricultural to industrial production. Industrialization must rather encourage every country to make improvements on its tradition of agricultural production in order to help feed the world.
Dinh, Do Duc (1999), Sustainable Industrialization ?A New Strategic Trend in Asian Developing Economies, Occasional Paper, Center for Asia-Pacific Initiatives, University of Victoria, Canada, May 1999 Elliot, John (2006), Fields of Green, viewed 30 July 2007 <http://money. cnn. com/magazines/fortune/fortune_archive/2006/10/02/8387511/index. htm> Garelik, Glenn (1987), Newly Industrialized Countries, Time Magazine Online, 19 October 1987, viewed 30 July 2007 <http://www. time. com/time/magazine/article/0,9171,965787-1,00. html > Asian Development Bank, Newly Industrialized Economies, viewed 30 July 2007 <http://www. adb. org/Countries/Highlights/NIE. asp>