Essay, Research Paper: Asian Economic Growth

Economics

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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.

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