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Sector Network Sustainable Economic Development Asia Division 41 Economic Development and Employment The Social and Ecological Market Economy – A Model for Asian Development? The Social and Ecological Market Economy – A Model for Asian Development? Published by Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ) GmbH Postfach 5180 65726 Eschborn T + 49 61 96 79 – 0 Internet: www.gtz.de Executive Editors: Corinna Küsel Dr. Ulrike Maenner Ricarda Meissner Contact: Corinna Küsel Head of Section Economic Policy and Private Sector Development GTZ Eschborn [email protected] Dr. Ulrike Maenner Chief Technical Advisor Macroeconomic Reform Program GTZ in Vietnam [email protected] Ricarda Meissner Chief Advisor of the EU-Vietnam Private Sector Support Program [email protected] Text Editor: Dr. Marianne Scholte Coordinator: Katja Röckel Cover Design and Layout: Kuhrt Kommunikation GmbH, Düsseldorf Printed by KlarmannDruck GmbH, 65799 Kelkheim May 2008 Contents Foreword .......7 Notes on the Contributors .......9 Part 1 Overall Perspectives .....22 Social and Ecological Market Economy – A General Overview .....23 Dieter W. Benecke Contributing to Asian Development – German Technical ......53 Cooperation and the Relevance of the Social and Ecological Market Economy Cornelia Richter Part 2 Academic Perspectives ....70 German Economic Policy at a Crossroads .....71 Eckhard Hein and Achim Truger Social Market Economy 2.0 – An Appraisal in the Light of Current .....83 Reforms Carolin Welzel and Robert Vehrkamp Pro-poor Growth in Asia – Conceptual Debates, Empirical Evidence, ...106 and Some Lessons Learnt Myriam Hadnes and Rainer Klump Industrial Policy – A Key Element of the Social and Ecological Market ...134 Economy Tilman Altenburg, Christina Rosendahl, Andreas Stamm, and Christian von Drachenfels Part 3 Partner Country Perspectives ...154 Social and Ecological Market Economy – The Future for China? ...155 Feng Xingyuan Market Economy with Socialist Orientation in Vietnam and the ...166 Concept of the Social and Ecological Market Economy Le Dang Doanh Significance of the Model for Thailand – Role of the State, ...194 Constitutional Values, and Planning Models Visoot Phongsathorn Social Security in India – A System in the Making ...211 Rolf Sülzer Part 4 Practitioners’ Perspectives ...230 “Learning Does Not Mean Copying” – Supporting Macroeconomic Reforms ...231 in Vietnam Nguyen Thanh Hai and Ulrike Maenner Social and Ecological Market Economy in Advisory Services – Providing ...249 Economic Policy Advice to China Jürgen Steiger Competition Policy in Southeast Asia and German Technical Cooperation ...258 Frank Tibitanzl Private Sector Development, Labor Conflicts, and Corporate Governance in ...267 Vietnam – The Search for New Models Ricarda Meissner and Ho Sy Hung Cambodia: Corporate Social Responsibility and the Cambodia Business ...287 Initiative in Rural Development (CBIRD) Peter Bolster and Peter Brimble Corporate Social Responsibility in Practice – Improving Working ...300 Conditions in Bangladesh Peter Roggekamp Social Security in Karnataka ...306 D. Rajasekhar and Namerta Sharma The Role of Social Protection within a Social Market Economy ...324 Katja Bender Social Protection Reform in Indonesia – In Search of Universal Coverage ...327 Katja Bender and Johanna Knöss Social Market Economy and Voluntary Social and Ecological Standards ...339 Thomas Finkel and Christiane Fleischer GTZ’s Approach to Supporting Private Sector Development in Asia – ...354 Underlying Principles and Practical Experience Corinna Küsel Strengthening Regional Competitiveness in Vietnam ...380 Angelika Hutter Mind the Gap – Regional Disparities in China ...386 Moritz Mang and Thomas Bonschab Twenty-Five Years of Sino-German Development Cooperation – Qualified ...403 Human Resources as a Key Factor of Chinese Sustainable Development Michaela Baur and Antje Pfeiffer Technical and Vocational Training in Thailand ...424 Peter Pozorski Appendix ...434 Social and Ecological Market Economy Principles in German Development Policy ...435 Federal Ministry for Economic Cooperation and Development Foreword The social market economy – with an increasingly ecological orientation – has proven a successful model for economic development in Germany. It has been the basis for reforms to increase competitiveness and growth, allowing Germany to become world champion exporter while meeting the challenges of strong immigration, reunification, and increased globalization with little social unrest. It reflects a basic set of values, shared by most Germans, which combines free market with social and ecological principles. In 2007, the German Federal Ministry for Economic Cooperation and Development issued Social and Ecological Market Economy Principles in German Development Policy, which details how this successful German and European tradition of economic, social, and ecological policy design can be used to orient German development cooperation. The GTZ Sector Network Sustainable Economic Development Asia immediately took up the issue, and at their 2007 meeting, GTZ advisors in the field of economic policy and private sector development debated the significance of the model of the social and ecological market economy for various Asian countries. Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ) GmbH is the technical cooperation implementing organization of German development cooperation and is active in most Asian countries. The sector network offers a forum for GTZ advisors and others in the field of sustainable economic development to exchange experiences and discuss international good practices as well as lessons learnt from practical implementation. It was at this point that the editors decided to assemble this reader in order to further explore the question which its title poses: “The Social and Ecological Market Economy – A Model for Asian Development?” We feel that the model of the social and ecological market economy can provide a perspective from which to approach the many unresolved questions in the region, and, after many discussions with our partners in government agencies and the private sector, we have come to believe that Asian perceptions of the state, the economy, and social values potentially match the concepts of the social and ecological market economy in many areas. At the core of the reader are articles by GTZ practitioners, primarily members of the above-mentioned sector network, who provide examples of how elements Foreword | 7 of the social and ecological market economy are reflected in the portfolio of German development cooperation in the region and also reflect on what needs to be done to develop this further. These articles are complemented by the perspective of German researchers and policy advisors, who reflect on the current reform debate in Germany, and the perspective of Asian partner country representatives, who outline their own understanding of why the German model may be of relevance to sustainable development in their countries – using the model not as a blueprint, but as a starting point for dialogue. An introductory section sets the framework by outlining the different elements of the social and ecological market economy and by reflecting on GTZ’s corporate philosophy in relation to the model. This book could not have been completed without the contributions of the authors; we want to thank them for their readiness to participate in this project. Furthermore, we are very grateful to Katja Röckel, who played an essential role in coordinating the logistics of preparing this reader and contributed substantially to its content. We also would like to thank, in particular, Dr. Marianne Scholte for her tireless and outstanding editorial work. Without these two, this reader would not have materialized. Corinna Küsel Ulrike Maenner Ricarda Meissner 8 | Foreword Notes on the Contributors Dr. Tilman Altenburg Dr. Tilman Altenburg is an economic geographer and has been Head of the Department of Competitiveness and Social Development at the German Development Institute (DIE) since 2006. His particular areas of interest are private sector development, innovation, and inclusive development. Dr. Altenburg joined DIE in 1995 and has carried out research on industrial and SME policy in Latin America, Asia, and Europe, as well as several consultancies for German and international technical cooperation. He has published in The European Journal of Development Research, Development Policy Review, and Development and Cooperation. Dr. Michaela Baur Dr. Michaela Baur is Program Director for GTZ China in the field of vocational training and labor market policy. For more than 15 years, her focus has been on labor market policy and its interfaces to social and economic policy. Since 2002, Dr. Baur has worked in China in various GTZ-supported programs. After studying political science and economics in Marburg, Frankfurt, and Berlin, she worked in research, consultancy, and development cooperation. Dr. Baur has published in Deutschlandarchiv, Arbeit und Arbeitsrecht, Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, and several other journals. Dr. Katja Bender Dr. Katja Bender is an economist and Planning Officer for Social Protection at GTZ Head Office in Germany. Before joining GTZ, she worked as a post-doctoral research fellow and lecturer at the Institute for Development Research and Development Policy in Bochum, Germany. Dr. Bender’s regional focus includes Asian and African countries. Notes on the Contributors
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