Moving beyond Factory Asia in the Mekong Region

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My paper “Moving beyond Factory Asia in the Mekong Region” has been accepted for presentation at the 8th Asian Political and International Studies Association conference to be held on September 19th-20th this year (http://www.apisa8.org/).

Abstract: Much of the rapid economic development that has taken place in East Asia in recent decades has depended on the ‘factory Asia’ concept – that is, low labour cost competitiveness in manufacturing industries that aim at import-substitution and export-orientation. This model has been very successful in achieving aggregate increases in income generation but its limits are evident in the case of countries such as Thailand and Malaysia, which have been struggling to break free of the Middle Income Trap that is set by entering the factory model in the first place. Some countries have made the transition to high income status and Korea is often cited as an example of how this might be achieved. In the Mekong region, most countries lag far behind Thailand and are in the early stages of the factory model. Yet the steps that Thailand is taking to exit the Middle Income Trap are already having an impact on its neighbours through offshoring of some low labour cost industries, promoting connectivity and building infrastructure to support these offshored industries and link them more effectively with places of consumption both within and outside the region. These changes pose a number of challenges for the governments involved in a range of areas, not least of which is that of social policy. The provision of welfare programmes and transfers in the region is comparatively low and there are few provisions for labour rights and freedom of expression. This paper explores the current situation with respect to important aspects of social policy in the Mekong region and outlines what changes are likely to take place over the next decade (notably, the launching of the ASEAN Economic Community and the completion of the Asian Highway Network), together with the possible improvements to social policy that can be made and which will be required by those changes.

Keywords: factory Asia, Mekong region, middle income trap, social policy

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