PACIFIC BASIN ECONOMIC COUNCIL
MAIN PAGE | CLIPS | 1998 | ON EAST ASIA

On East Asia, 'I'm Still Very Optimistic' A Q&A with Gary Tooker, Motorola Chairman Michael Richardson The International Herald Tribune Monday, February 16, 1998 Multinational companies and other foreign investors have a major stake in East Asia. In Singapore, on a visit to the region, Gary Tooker, chairman of the U.S.-based telecommunications giant Motorola Corp. and of the Pacific Basin Economic Council, an association representing more than 1,100 companies in 20 countries around the Pacific, discussed the business outlook with Michael Richardson of the International Herald Tribune. Q: How long will it take East Asian countries to recover from the financial turmoil and economic slowdown, including those hit hardest: Indonesia, South Korea and Thailand? A: A lot will depend on the leaders' ability to move forward in line with reforms recommended by the International Monetary Fund. Obviously the situation in Indonesia is difficult. For all of us, the next year or so will be somewhat tougher than we had hoped. But I am still very optimistic about the intermediate and longer-term outlook for East Asia because the basics for economic growth are still in place, including the propensity of Asian people to save and their industriousness and creativity. There is an excellent work ethic in Asia. I think it is important to work together in an optimistic way. If everybody gets pessimistic and people start pulling out of Asia because of the short-term problems, then things have a tendency to feed on themselves. Forty percent of the world's population lives in Asia, and countries of the region have become outstanding trading partners for many of us. Q: Some government leaders in Malaysia and Indonesia are blaming their economic problems on currency traders and outside forces rather than weaknesses in government policies and banking systems. Doesn't that send a bad signal to foreign investors? A: It's inappropriate for me to comment directly on that. The leaders I have talked to understand, and are realistic about, the issues. At the same time, the speed at which money can be transferred from one place to another in today's economy is an issue that we all need to think about and look at. Q: Do you see promising opportunities in East Asia now for foreign investors in manufacturing and service industries? A: Motorola is still very confident of the opportunities throughout Asia. We have been investing in Asia for over 30 years. We don't invest anywhere anymore for cheap labor. We are doing research and development work over here as well as product development and manufacturing research. We put in automated equipment and training to support our people in every country, and we'll continue to do that. Q: Motorola has manufacturing plants and other operations in China, Malaysia, Hong Kong, the Philippines and South Korea. Are you planning to expand operations in the region in anticipation of economic recovery? A: In some areas, our investments will increase in 1998 over what they have been in the past couple of years. In other areas, if the market is slower, we may delay a particular expansion program, so we may moderate some of our planned investments. But we will not pull back. We certainly aren't going to change our business development strategy, although we may adjust some of our tactics. Q: East Asian countries hope to export their way out of trouble. Is there a risk that rising protectionism in the United States will close off that opportunity in their largest market? A: Businesses and people in other countries have to recognize that the United States cannot be the only importer for the world. Japan needs to open its market more widely to imports. Japan and Europe too have a vested interest in stepping forward to see how we can all help the region in this somewhat critical time by creating a more balanced market for its goods.