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Plugging into Production Networks

Industrialization Strategy in Less Developed Southeast Asian Countries

Ikuo Kuroiwa

Publication Year: 2009

This work focuses on how less developed economies in Southeast Asia, namely Cambodia, Laos, Myanmar and Vietnam (CLMV), can establish links with neighbouring countries and participate in production networks. It also takes a look at links between Singapore and the Batam-Bintan-Karimun (BBK) Special Economic Zone in Indonesia. Leading Southeast Asian economies have achieved rapid economic growth by participating in production networks organized by multinational enterprises. It is thus crucial for less developed economies in Southeast Asia to improve their investment climate, attract foreign direct investment, and form competitive industrial clusters. Service link costs must also be reduced substantially to make production fragmentation economically feasible. The authors in this book discuss these issues and provide policy recommendations.

Published by: ISEAS–Yusof Ishak Institute

Title Page, Copyright Page

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Table of Contents

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List of Tables

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pp. vii-ix

List of Figures

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pp. xi-xii

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pp. xiii-xiv

From the perspective of geographical proximity as well as economic, social, and cultural affinity, the experience of industrial development in leading Southeast Asian economies should be most relevant and helpful for their neighbouring countries. After facing difficulties in...

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pp. xv-xvi

This is the second phase of a research project funded by the Institute of Developing Economies (IDE-JETRO) in Japan on production networks in Southeast Asia. In the first phase, the project aimed to investigate how production networks and industrial clusters were formed in...


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pp. xvii-xx

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1. Introduction

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pp. 1-11

Since the mid-1980s, liberalization in trade and investment in Southeast Asia has encouraged the expansion of production networks into the region. A well-known case study by McKendrick et al. (2000) demonstrated how production networks in the hard disk drive (HDD) industry...

Part I: Overview of the Production Networks in Less Developed Southeast Asia

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2. Expansion of the Production Networks into the Less Developed ASEAN Region: Implications for Development Strategy

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pp. 15-35

In both journalistic and academic literature in North America and Europe, pessimistic views on outsourcing and offshoring, or sometimes on globalization as a whole, have become vigorous and pervasive. Against such a wind, it is fortunate to see that East Asia has maintained...

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3. Production Networks and Industrial Policy in Less Developed Southeast Asia

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pp. 36-71

In view of their geographical proximity, as well as social and cultural affinity, the experiences of industrial development in the neighbouring Southeast Asian economies can provide invaluable lessons to the less developed economies in the region. In the more advanced Southeast...

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4. ASEAN Economic Integration and Implication for CLMV Countries

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pp. 72-111

It is generally said that economic regionalism has a positive impact on economic development as it strengthens economic linkages through trade and investment and encourages the development of production networks. Sen (2007) in his analysis of ASEAN regionalism observes...

Part II: Case Studies

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5. Industrialization Strategy of Laos: Agglomeration and Fragmentation

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pp. 115-145

It is not appropriate for national planners to persist in independent and self-satisfactory national development strategies without taking globalization into consideration. It is more rational and time-saving to plan national development strategies in the framework of sub-regions...

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6. Export-oriented Garment Manufacturing and Its Impact on Employment, Productivity and Wages in Cambodia and Laos

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pp. 146-167

Export-orientation as the vehicle to initiate manufacturing growth in the developing economies became significant only since Shannon International Airport in Ireland and later Kaohsiung in Taiwan began attracting foreign firms to assemble and process labour-intensive goods...

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7. FDI and Economic Integration in Vietnam

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pp. 168-213

Since 1986, economic reform (Doi Moi) in Vietnam has made significant strides towards transition to a market-oriented economy and improvement in the living standards of the people. Vietnam’s economic growth rates have been high for nearly twenty years. Many of the Millennium...

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8. Border Industry in Myanmar: Plugging into Production Networks through Border Industry

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pp. 214-244

The chairman of the Myanmar Garment Manufacturers Association (MGMA) deplores the fact that the garment industry in Yangon and its suburbs has been losing workers, in particular experienced workers, to Mae Sot, a Thai border town opposite Myawaddy on the Myanmar...

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9. The Batam, Bintan, Karimun Special Economic Zone: Revitalizing Domestic Industrialization and Linking Global Value Chain

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pp. 245-296

The Special Economic Zone (SEZ) is not a new concept in economic development literature. Its predecessor takes the form of free trade zone (FTZ) and export processing zone (EPZ) where selected production activities (often manufacturing-related in nature) are permitted within...


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pp. 297-313

E-ISBN-13: 9789812309358
Print-ISBN-13: 9789812309341

Page Count: 313
Publication Year: 2009

Edition: 1