Asian Economic Growth
In his book Asiaís Miracle Economies, Jon
Woronoff examines the dramatically
quick economic growth of five Asian
countries. The five countries examined are
Japan, Taiwan, Korea,
Singapore, and Hong Kong. Through his study the author
demonstrates that
there was no miracle involved in these countries growth. They
applied
specific strategies that were adapted to their local environment. Some
of
these strategies worked some didnít. The author says that by examining
these
nations, one may be able to repeat there success. The book is divided
into three
parts. In "Part One: Places" the author tells where these
countries
started from. Some were poorer than average. Some had little
natural resources.
The people of these countries had different outlooks
on the world thus different
behavioral tendencies. Part I is divided into
five chapters each examining a
countries. Woronoff begins Chapter 1 "Japanís
Two Miracles," by
discussing Japanís first industrial revolution. In 1853
when Commodore Perry
opened Japanís ports to foreigners, Japan was feudal
society. It was not very
evolved nor very modern. Agriculture was good but
not enough for the growing
population. Japan wanted to learn from the West.
Japan sent many students to
Europe and the United States. Soon Japan
began industrializing. Groups called
zaibatsu formed. These zaibatsu
dominated industry and commerce. They
manipulated politics to suit their own
needs. Japan soon began concentrating own
building a War Machine. After the
Russo-Japanese War, the country went into a
recession. But after the First
World War, Imperial Japan began growing up until
the end of the WWII. The war
left Japan resouceless and heavily overpopulated.
The victorious Allies
gave or rather imposed democratization onto Japan. The
zaibatsu were
disbanded. Japan was left weak. The United States provided much
financial
support. Japanís economy then began growing very fast. The Japanese
protected
themselves by implementing quotas and then non-tariff barriers.
Companies
such as Sony, Honda, and YKK improved production methods. Businessmen
and
bureaucrats worked together. Many firms formed keiretsu. Keiretsu was a
sort
of lateral conglomeration of banks and companies loyal to each other.
The author
concluded that the 1980ís, Japanís economy had surpassed those of
France and
Britain and rivaled the United Statesí economy. The Japanese
could now purchase
many luxury consumer goods, but at what price. Their
obsession with production
as their prewar obsession with military might had
its drawbacks. Lack of urban
planning has led to urban congestion with
subsufficient pluming and sewage.
Their economic success came at the cost
of living conditions, human relations
and natural beauty. The author begins
Chapter 2 "Taiwan, Industrial
Island" with a brief history of Taiwan.
Taiwan, the island of Formosa was
once a Dutch trading center. Then it became
a part of the Chinese province of
Fukien in 1683. With this Chinese began
immigrating. In 1895, Formosa was ceded
to Japan. The Japanese realized the
agricultural potential of the island. They
built roads, railways and harbors.
After the Second World War, the islandís
economy which had been based on
exporting food and raw material to Japan was now
greatly weakened. In 1949
when the Kumintang moved to the island , so came over
one million refugees,
fleeing from the communist mainland. The first priority of
the new Republic
of China was its military. Aid came from the U.S. in 1953 in
the form of the
Mutual Security Treaty. Taiwan attempted many things to help its
economy.
These implementations made matters worse. The Nineteen Point Program
of
Economic and Financial Reform enabled local businessmen to act more
efficiently
and purposely. Despite many factors against it the Republic of
China has been
able to steadily grow economically and is likely to continue
to survive into the
future. In chapter 3 "Korea Man-Made Miracle" the author
explores the
history of Korea. Korea has long had a history of Chinese
domination. But as
China became more an more under western spheres of
influence, Korea began to be
dominated by Russia and Japan. Soon after Japan
took control. Japan used Korea
as mercantilist colony. Japan did build roads
and develop the economy. After the
war, Korea was left in bad shape. The
country was divided into a U.S. zone and a
USSR zone. The zone formed two
separate nations. North Korea had all of the
industry and the South had all
of the agriculture. Soon the North invaded the
South. The U.S. came the
aid of the South, driving the communists back north.
The United States
provided financial assistance for reconstruction in 1954.
Economic
progress was slow coming. In 1961, General Park takes charge. He was
a
military man. He wanted the country to emphasize economic growth. Under
his
influence, the government played the major role i! n all industries.
Often
directing in which sectors the economy would grow. Under Parkís
leadership the
economy grew rapidly, yet he overstayed his welcome and was
assassinated in
1979. Koreaís economy continued to grow throughout the
1980ís. Chapter 4
"Singapore, Capitalist Haven" tells of Singapore. In 1819,
the British
set up a little trading port on the island Singapore. It was a
sparsely
inhabited island, with no visible wealth. The port attracted traders
almost
immediately because the British ran it as a free port which welcomed
all ships.
In the 1860ís, after the opening of the Suez canal is when the
port became
truly popular. It became a frequented coaling station. Many goods
came there
from Europe. These goods were broken down to smaller lots for
redistribution
throughout the region. By the twentieth century it was a
bustling commercial
center. The Japanese occupation of 1942-45 ended all
that. After the War,
Singapore had lost it trade links. It tried to form
a federation with Malaysia,
but it fell apart shortly after. In 1965,
Singapore started all over again.
There was a large population, no
agriculture, and little natural resources.
Singapore sought foreign
investors. It provided incentive for companies to come
in. Banking is one of
the industries that bloomed. Singapore became the
"Asian Switzerland."
Singapore steady economic growth helped its
citizens, whose per capita GDP
had become the second highest in Asia by 1982.
Chapter 5 "Hong Kong,
Capital Paradise," tells of the history of the
former British possession.
Hong became a crown possession in 1841. It was a
small piece of territory
with no intrinsic worth. The British established a free
port there. That soon
began to thrive. It became integrated into the Japanese
empire for a short
time during the War. Afterwards it returned to Crown. Hong
Kongí rulers
followed a strict policy of non-intervention in the economy.
The
laissez-faire policy was successful. Free- enterprise has truly worked.
There
has been steady growth in exporting as well as low unemployment. The
standard of
living has all around improved. In "Part II Polices" of his
book
Woronoff tells of how these countries did not possess some sort of
natural
endowment that led to their success. It was their policies and how
these
policies were carried out that did it. Each country had different
policies
geared toward their local environment. These policies varied from
much
government involvement to the opposite scenario of complete
laissez-faire.
Chapters 6, 7, and 8 discuss the way that economic growth
were strong goals in
these countries. The author goes further to explore the
different way of which
counties varied capitalism. Korea where the government
not only encouraged the
economy towards certain sectors, at times it
deliberately directed the direction
of the economy. Japan and Taiwan were the
government and business often worked
together. The other extreme were
Singapore with its very liberal policies and
Hong Kong, the epitome of
laissez-faire. The industries that developed were
different depending on the
nationís goal. Some nations built up specific
industries in order to avoid
foreign dependence. Chapters 9 and 10 examine the
importing and exporting
strategies of these nations. Exporting has been
especially successful for
these nations for to reasons. One reason for their
success they have
consistently working at competitiveness, improving their
products. Second the
world economy has been growing. Thirdly these countries
have been trading
more amongst themselves. Then the author discusses the Asian
use of import
substitution. In Chapters 11 and 12, the author tells of how the
Five
used technology to help them advance. These countries successfully
adopted
western technology and production strategies. They then went on to
devise
strategies of their own. The author further notes how many under
developed
countries had more resources but were unsuccessful at adopting
these strategies.
The failure of many others is what makes the success of
the Five seem
"miraculous." In "Part III Prospects," the authors tells
of
the economic conditions throughout the world since the Second World War.
He
discusses the worldwide growth in the first two decades after the war.
Then the
oil crisis and recession of the 1970ís slowed down all but a few
economies, the
Five were among those which continued to prosper. In
chapters 13 and 14, the
author introduces the problems of the future. He say
that getting a strong
economy is one thing but keeping it strong is another.
In the coming years will
the Five work together as allies or will they become
rivals for competing
markets. Chapter 15 tells of influence the Five are
having not only their region
but worldwide. They are becoming models for
other Asian countries. Chapter 16
"East Confronts West" discusses the effects
the growth of these nation
has had on the Europe and the United States. The
West has felt the effects of
these nations greatly. The West once had
unchallenged access to the Asian market
for sales as well as the allocation
of raw material. The Five is bringing new
competition. In the future a
Pacific Economic Community may present many
challenges to the West. In the
Epilogue: Keeping the "Miracles" Alive,
the author restates the main points
of his analysis. He calls these points
"lessons." Lesson 1 is there is "no
magic formula" for
success. Lesson 2 is "no matter how good a policy is" one
must remain
flexible in using it. Lesson 3 is heed to economic laws. Lesson 4
is
"pragmatism takes many forms" or if it does not work, change
it.
Lesson 5 is one must learn from others. Finally lesson 6 is deeds not
words lead
to success. Jon Woronoff, in his book Asiaís "Miracle" Economies
,
provides a look at the successful growth of the economies of Japan,
Singapore,
Taiwan, Korea, and Hong Kong. He shows how these did not
perform miracles. They
each had different political situations as well as
different resources to work
with. These nations followed specific policies
that fit there position. They
made their share of mistakes. They manage to
learn from their mistakes
and
succeed.