2008 Reports

History Repeats Itself: Evolutionary Structural Change and TNCs' Involvement in Infrastructure Overseas, Flying-Geese Style

Ozawa, Terutomo

When any resource-scarce country reaches a stage of growth where resource-intensive heavy industry becomes a leading growth sector (and lifestyles turn increasingly energy-consuming), it is compelled to seek out resources overseas by making investments in project-specific infrastructure (and even in general-purpose infrastructure to cultivate goodwill). In this regard, a reformulated "flying-geese" paradigm (a stages model) of growth can shed light on such an economic behavior. The advanced West and their TNCs were once aggressively engaged in their hunt for overseas resources and markets under colonialism at the height of their heavy and chemical industrialization during the 19th-to-the early 20th century. Japan too followed suit in its drive to build up heavy industry and secure resources abroad. Most recently, China has entered such a growth stage, exhibiting a similar hanker for resources and emerging as a primary financier and developer of infrastructure in developing regions, notably in Africa, as part of its resource-seeking diplomacy.