Development, Urbanization, Migration, and Quality of Life - Dragons and Tigers: A Geography of South, East and Southeast Asia - page 98

The Asian Development Bank (ADB) predicts that
the region' s economic growth rate, which has dropped
from its peak of 9.5 percent in 2007 to 3.9 percent in
2009, will only rise to 6.4 percent in 2010. This is already
wreaking major consequences on the poor and vulnera-
ble. The ADB estimates that the projected GDP decline in
the region will plummet another 60 million people into
poverty (living on less than US$1.25 a day) and an addi-
tional 80 million into a state of vulnerability (living on
less than US$2.00 a day .
Nothing is really predictable, at least in Asia. While
small economies like Malaysia, South Korea, and
Thailand were crushed by the crisis, larger ones such as
China, Indonesia, and India continued to expand. How-
ever, some of the smaller economies are on the re-
bound. South Korea' s economy grew by 10 percent in
the latter part of 2009, and Singapore' s by 21 percent.
According to many financial experts, Asia' s emerging
economies are clearly leading the global recovery . How-
ever, according to the naysayers, this new bubble will
eventually burst.

and Southeast Asia, with the exceptions of Japan and
North and South Korea.
Overseas Chinese expand their businesses through
acquisition of ever-increasing numbers of separate com-
panies rather than enlarging existing ones. Consequently ,
they control an array of large, highly diversified con-
glomerates such as Salim Group in Indonesia, which
comprises hundreds of companies spread across a wide
range of markets in multiple countries.
Most overseas Chinese businesses are “family-
owned”—controlled by members of a single family . T Typ-
ically , sons and daughters are given a division of the
conglomerate to manage. Financing is derived from their
own private banks or through connections with foreign
banks and joint ventures with foreign enterprises.

FOREIGN AID
The spatial duality of core-periphery development is
frequently further entrenched with bilateral and multi-
lateral aid programs. Most aid is bilateral—government-
to-government transfers of cash, low-interest loans,
material goods, food, or medical supplies. T Technology and
training are also transferred. T Technical training, while
improving skill levels, lays the groundwork for further
capital input and even greater reliance on outside assis-
tance. Aid might also take the form of preferential tar-
iffs, whereby the donor nation agrees to buy goods
produced in the recipient nation. Multilateral aid de-
rives from international organizations such as the Orga-
nization for Economic Cooperation and Development
(OECD), the World Bank (WB), or agencies of the
United Nations.
If aid is concentrated in a core area, it strengthens
the core and distances it further from peripheral realities.
For instance, a full-service hospital is most likely to be
located in the core, while poorly supplied clinics are
placed in peripheral regions. T Transportation develop-
ment provides another example. Modern road construc-
tion typically radiates outward from the capital city .
Starting as a paved highway , it eventually degenerates
into an unpaved road, and ultimately into a dirt track,
often impassable in the wet season. T Transportation and
other infrastructural conditions decline as distance from
a core increases.
Tied aid, binding the source and destination in a not
always mutually beneficial agreement, is a common prac-
tice. Much official development assistance (ODA) is tied
to structural adjustment programs (SAPs). SAPs require
privatization, increases in exports, and adherence to free

THE ROLE OF OVERSEAS CHINESE
There are around 55 million overseas Chinese, most of
whom live in Southeast Asia. Most are business entrepre-
neurs who are the driving force behind economic devel-
opment in Asia. For instance, they contributed more
than 65 percent of foreign investment in China in 2003.
Currently , they own nearly half of the 28,000 foreign-
invested firms in Shanghai. They own hundreds of
conglomerates in Indonesia, Thailand, Malaysia, and
elsewhere in Asia.
Although they live outside China, most overseas
Chinese have long-standing connections with southern
China. At least 2,000 years ago, some of their ancestors
left the southern provinces to colonize Southeast Asia or
to serve colonial interests demanding cheap labor, and
tens of thousands have followed since.
Focusing on business and trade, they maintained,
expanded, and intensified their connections with various
power structures to the point of becoming gatekeepers
for any form of economic interchange. After each of a se-
ries of upheavals in China, more would flee or at least
channel their capital elsewhere. With the communist vic-
tory in 1949, billions of dollars left the mainland with the
outflux of nationalist Chinese and their supporters. By
prudent saving and investment, timely information, and
fast action via closely guarded networks, the overseas
Chinese have come to dominate the economies of East