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INTRODUCTION The ascendancy of East Asia on the economic scene of the world has made it a hot topic for the researchers. Numerous questions are simmering in the mind. Why East Asia has developed rapidly as compare to other developing countries of the world? What are the secrets behind the success? Is success sustainable or just a flash in the pan? What kind of effects, the Asian rise would bring on the politico-economic scene of the world? What lessons can be derived from East Asia? Whether the lessons can be replicated to other parts of the world? What are the necessary conditions and how they can be created? The list of questions is perhaps uncountable. Multidiscipline knowledge and long period of time is required to address all these questions and even then some of them may remain unanswered. Nevertheless for a person, who is unequipped with sufficient amount of time as well as knowledge, it is not less exciting to understand at least some parts of the East Asian success, which is being termed as “East Asian Miracle”. 1.1 What is a Miracle? A miracle is an uncommon, unusual or rare happening, which is unprecedented and unparalleled by nature. Looking through the economic history of the world, the growth in East Asia is unmatched by any standard. The per capita income of five East Asian countries including Japan, Singapore, Hong Kong, Taiwan and South Korea has quadrupled within a short span of quarter century. Indonesia, Malaysia and Thailand and other countries which include People Republic of China, Vietnam, Philippine are following the course of their predecessors. The level of progress which United States of America and other developed nations of the West have achieved in more or less 100 years, the East Asian countries have achieved the same within just a quarter of the time period. The team of the East Asian Miracle has noted with amaze that “If growth is randomly distributed, there is roughly one chance in ten thousands that success would have been so regionally concentrated”. A distinguished economist Stanley Fischer has noted that, “there really has been a miracle in East Asia, The miracle is that the living standards of over a billion people are being transformed at a rate that doubles per capita income in a decade”. Some economists are of the opinion that rapid economic growth in East Asia is a result of high mobilisation and accumulation of economic resources i.e labour and capital, like ex-Soviet Union and there has been no increase in factor productivity. Quoting again from Stanley Fischer, he says, “A great deal has been made recently of the generally low productivity growth rates found in East Asian economies. East Asian growth, it is said, is due “merely” to high saving rates. Far from being a caution, that would be an extremely encouraging result, for it means that a country does not need superhuman qualities to grow, but needs only to save and invest enough.” Why the people in East Asia saved more and sacrificed their present at the altar of future? Why the investment decisions were made to create highly productive assets? And why the leaders and the bureaucracy in East Asian countries behaved in the most responsible manner, are the other questions, which make it a miracle. The achievement of East Asia is not only high growth rate but also equitable income distribution. It has been observed that the economic growth is usually associated with rising income inequalities. The East Asia seems to be an exception. The Gini coefficient of the East Asian countries shows that despite rapid economic growth, the distribution of income has remained unchanged. The following table shows Gini index of eight economies of East Asia. Table: 1.1 Gini Index, Period Averages 1965-90
Source: The World Bank, Economic and Social Database, Washington. NA = Not Available The study conducted by Barro and Jong-Wha Lee shows that, “growth depends upon negatively on a group of variables that reflect distortions and size of the government, the ratio of government consumption to GDP, the black market premium on foreign exchange and the frequency of revolutions. Growth depends positively on the ratio of gross investment to GDP.” The Asian tiger countries eschewed all those negative factors, which could hinder the prospects of rapid growth and promoted the positive factors. 1.2 Waves of Economic Growth The growth in East Asia has not come in one wave, rather it has staggered over a period of time. Japan was the first among Asian countries who took lead in economic growth. After Japan, three distinct waves of growth can be identified:
The Japanese economic success provided a model for growth and the developing countries of East Asia took great advantage of this unique experience. As noted by Vogel, Ezra F. “After World War II, only the government of South Korea and Singapore consciously studied the Japanese experience in detail, but the main outlines of the Japanese strategy were well understood by all four of the little dragons.” 1.3 Focus of the Paper Looking at the vastness of the topic, it is not possible to cover its every aspect. To narrow down the research, the paper concentrates only on the experience of the Asian tigers i.e Singapore, Hong Kong, Taiwan and South Korea. The paper would specifically concentrate on • Exploring the critical factors behind the success of Asian Tigers • Drawing lessons for developing countries, and • Searching the possibility, to what extent these lessons can be applied to the developing countries. 1.4 Methodology and Purpose of Research The basic methodology to conduct research is to review the literature on the topic, understand and assimilate it and reproduce it in a meaningful manner. To achieve this purpose, I have collected a number of books and articles form different sources, the list of which is provided at the end, under selected bibliography. The topic is so vast that I don't consider that I have collected a considerable amount of literature. The most valuable source has been the World Bank Database and its publications. However, I have extensively used the other sources as well. Due to paucity of time, it is not possible to go through all the material. I have tried to study selectively, the proof of which would be apparent from the references across the paper. The paper does not construct a new model or hypothesis to explain the phenomenon of East Asian economic success, which I think was possible under the able guidance of my adviser, Dr. Harald Sander, had the enough time available. The study carries many advantages. It would provide me
The paper is divided into chapters. Chapter I provides general introduction of the topic and other related information. Second chapter is also of introductory nature and provides historical perspective of the Asian tiger countries. The chapter is important for the reason that it provides briefly, background information about the four Asian tiger countries. Comparison is also made between the countries, with respect to their general conditions, where possible. At the end of the chapter a summary of initial conditions is presented. This chapter prepares ground for further analysis in subsequent chapters. Chapter III is one of the important chapters of the paper. It explores the critical elements behind the success of the Asian tigers. Each element of this chapter deserves a comprehensive treatment and books have been written on them. To explore the factors of success, I have also lightly touched the controversies. These critical factors provide an idea that the word ‘miracle' conceals more than what it reveals. I don't understand that the list as well as the explanation is comprehensive, however, it provides some sense about the factors, which led to ‘East Asian Miracle'. Chapter IV is also an important chapter. It deals with the lessons from Asian tiger countries. While drawing lessons, I have kept developing countries in view. These lessons are not new and can easily be searched out from the books of economic development or political economy. What makes them special is their relationship with East Asian success. These lessons are being considered as a key to success. Some of these lessons are controversial, but controversy does not lower down their importance. Chapter V is devoted to discuss the replicability of the lessons derived from East Asia. This chapter has proved very tricky and difficult. In the absence of any single model of East Asia, it is difficult to discuss the replicability. I have tried to improvise the situation and picked the main ingredients as a test of replicability. A number of constraints have been discussed on the way of duplication. However, its major ingredients are replicable in other countries, if a cultural fit is created. The paper concludes with an optimistic note. |