The Four Little Dragons-- The Spread of Industrialization in East Asia

Any examination of the 40 years of global development since World War Two will undoubtedly reveal East Asia as a leading player. Japan is already seen as enemy number one by many countries, and the growth of the four little dragons-- Taiwan, South Korea, Hong Kong, and Singapore--has taken people by surprise. Researching the mass of specialist works on the former is a task of herculean proportions, and any conscientious examination of the latter must still be very limited. The Four Little Dragons, the latest book by Ezra Vogel, professor of sociology at Harvard University, goes some way towards making up for this deficiency.

An East Asia primer: The Four Little Dragons begins by talking about the overall international situation following the end of World War Two, continues with separate chapters on the processes of development in Taiwan, South Korea, Hong Kong and Singapore, then finishes off with a discussion of the causes of their success. Although the book as a whole takes the four little dragons as its focus, the author of the world-renowned Japan as Number One, feeling that the background to their achievements is similar to Japan's in many areas, includes Japan in his conclusion.

This again is one of those well-informed but popular works at which Vogel excels. Full of hard facts, the writing is however suitably easy for a mass readership. From start to finish the book revolves around one main theme: Japan and the four little dragons combined do not even make up one percent of the world's land surface, and their populations are no more than four percent of the world total, so how is it that their economic strength has made them, along with Europe and the United States, one of the three great pillars of the world economy?

What is especially important is that at the end of World War Two none of these places had a very good starting point from which to engage in international competition; Japan was defeated, Taiwan and South Korea were parts of divided nations, Hong Kong and Singapore were British colonies. What was the common thing that made this society of five similar cultures and geographical proximity so miraculously develop in the 40 years after the war into members of the same class of brilliant phoenix?

Within its 130 pages the book takes an overview of the period 1945 to 1991, covers five East Asian societies, and still manages to bring in the occasional comparison with other areas of the world. Although the author himself sees the book as a little primer for getting to know East Asia, decades of wide ranging research into that area are evident at every point.

The key year for Taiwan's takeoff: The main achievement of this book is its comprehensive sketch of the changing tracks taken by Taiwan, Korea, Hong Kong and Singapore in the 40 years since World War Two. The economy is taken as pivotal, with its connections with the political, social and cultural backgrounds. Although the scope is wide ranging, the author concentrates on essentials, leaves out complications, gives careful explanations, and clarifies relationships.

When talking about Taiwan, Vogel starts with the removal of the government to the island in 1949, then continues with the land reform movement, development of light industry, and the pursuit of self-sufficiency. Policy at this time was extremely conservative, with high interest rates and many restrictions on investment, due to the painful experience of the inflation that had occurred on the mainland. If this had continued, Taiwan could not have become a little dragon. The turning point came in 1958.

At that time the limited domestic market was already approaching saturation point, in addition to which there was always the danger that American aid was eventually going to come to an end. Policy was changed to one of encouraging investment and expanding exports, which were stimulated by the announcement of the Nineteen Point Program for Economic and Financial Reform in 1960 and the expanded four year plan for 1961-1964. The next ten years saw a flourishing of small- and medium scale enterprises, an increase in investment by multinational corporations, and a close relationship between business circles and Japan. Most of the policy makers had studied in the United States or Britain. The 1970s were not a good time for foreign relations, however, with the establishment of diplomatic relations between Peking and Washington, and the Republic of China losing its positions in a number of international organizations. It was not until 1987 that the tense relationship between the two sides of the Taiwan Strait gradually improved. In one chapter the author covers all these stages, with their twists, turns and underlying causes.

South Korea's turning point: South Korea's industrialization took place ten years later than Taiwan's, mainly due to political turbulence. In 1961, Park Chung Hee took power and in January of the following year he initiated an export-oriented economic policy. South Korea could be said to be the country that learned most from Japan, something which is not hard to discover when looking at the structures used by the two countries for initiating economic and technological development; whatever organization Japan has, South Korea will have an equivalent with a similar name. Arising from the lingering bitterness over the Japanese invasion, South Korea both respects and hates Japan, so that up until today South Korea is one of the very few countries that imports virtually no Japanese auto mobiles. When South Korean automobiles were able to compete in the international market, Japan repaid them in the same fashion.

Borrowing heavily overseas to develop its heavy industry, by the early 1980s South Korea was listed among the world's most in-debt nations. How did it turn from this dangerous situation to its present safe position? The crucial point came in the three years between 1985 and 1988, when the Japanese yen appreciated under American pressure, while the South Korean won had not yet had an opportunity to move. This allowed Korean automobiles, steel, shipbuilding and other products to get a foothold in the international market.

As for Hongkong, its prosperity has often been attributed to its free-market economy. But is that all there is to it? Take a look at what the invisible hand of the government has been doing! Of course Hongkong has been fostered by the colonial government and graced by Britain's process of shedding its colonies one by one.

Singapore's capitalism with socialistic characteristics: The two pillars of Singapore's economy are state-owned enterprises and multinational corporations. The managers of the former are civil servants but receive salaries that are fixed according to the profitability of their enterprise. Singaporeans call this a kind of "capitalism with socialistic characteristics." Public housing and other social welfare systems also reveal Singapore's heavy socialistic coloring. Why is this so? The leaders of the independence movement and the elite leaders of Singapore's economic construction had been students in Britain at a time when British anticolonialism had enjoyed a very close relationship with socialism.

These simple summaries paint a vivid and lively outline of the development of the four little dragons. If the book finished like this, it might perhaps have just been a knock on the door for readers of English wanting to get to know East Asia. In the last quarter of the book, however, the author takes the attitude of a bystander looking at East Asian society, and makes many accurate observations and objective analyses. This fresh look at some of the commonplace phenomena and systems to which we have become accustomed will also be of great benefit to readers from the East.

Looking from life: Vogel's views concerning the reasons behind the ability of the four little dragons to rapidly industrialize are mostly at one with those of other scholars. These include U.S. aid; plentiful, industrious and cheap labor; the absence of an entrenched ruling class making reform easy; a crisis consciousness among the people; and the example of Japan. Within this overall similarity, however, there are still some small differences.

Vogel always stresses that when researching a society it is not enough to just look at the overall situation and understand the economy and politics. It is even more important to look at things on a small scale, to make a lot of contacts, and to understand individuals and families as the basic units out of which society is organized. It is this observation from life from which Vogel's many original views are derived.

For example, Vogel's contacts give him a sensitivity to the gravity of examinations in the everyday life of the five societies he looks at. No matter whether it is to get into a good school or to get a good job, everyone must pass through the trials of the examinations; getting good grades is the most important aim for young people (and their families).

After further examination, Vogel thinks that the influence of the examination system is far reaching. Not only does such a system make young people work hard to absorb knowledge, but there is also a division of resources among schools which guarantees that high achievers will get into top institutions and later on get high positions. People can thus feel that there is a way to get ahead in society, but of special importance is that the attitude of obedience and hard study inculcated in the process of growing up raises people who are willing to work long hours and are accustomed to following rules.

Interesting figures: The Four Little Dragons maintains Vogel's style through the use of statistics to strengthen its explanations and persuasiveness. Frequently appearing between small examples and anecdotes, they leave deep impressions and reveal the author's erudition. For example, the average income for Taiwan in 1949 was not even US$100. But how much was that really worth? It was no more than the level in India at that time.

The Koreans have become world famous for their industriousness. So how hard do they really work? Even that "economic animal" the Japanese, at the peak of Japan's growth, did not work more than a 50-hour week; during South Korea's period of rapid economic development, the Koreans were working nearly a 60-hour week. And how enthusiastically are the South Koreans studying Japanese? There were 250,000 high school students studying Japanese in 1990--that is 70 percent of the world high-school total outside Japan.

How can you let somebody with no knowledge of the East really appreciate Hongkong's prosperity? There is a very good way: In 1990 the average income in Hongkong had surpassed that of Britain, its colonial mother. Such examples are common throughout the book, making it a volume of condensed knowledge that lies somewhere between an academic and a popular work, with a correspondingly high readability.

Emphasizing the role of government: If you had to find a shortcoming with The Four Little Dragons, then it is probably in the way that the narrative emphasizes the roles and measures of governments, while spending less time on private entrepreneurs. This could be a reflection of the particular viewpoint adopted by the author.

The book opens by saying that because the relatively late industrializing countries wanted to quickly get in pace with advanced industrialization, they could skip the mistakes made by the advanced countries and the process of moving from simple to complex. This meant that such countries needed a degree of high-level coordination and strong leadership which only governments were sufficiently competent to supply.

This Principle is not something that is universally true. For example, in the countries that have followed on the industrialization of the four little dragons--such as Malaysia, Thailand and Brazil--investing multinational corporations have solved their own capital, technical, power, communications and training problems. Such an argument is, nevertheless, fully appropriate when discussing the development of the four little dragons.

Looking at it as a whole, Taiwan was the first to have stable politics and its industrialization was also the earliest. A stable central leadership only appeared in South Korea when Park Chung Hee took power, and in Singapore when Lee Kuan-yew successfully led it to achieve independence, and it was also only then that economic construction was initiated. In Hongkong, it was the government that began reviving public construction and developing industrial zones in the 1950s.

In spite of all this, the production and marketing ability of private enterprise is still undoubtedly an essential factor behind the rapid economic growth of the four little dragons. Those discussing this aspect of the subject are at present still few and far between. It is much the same with research into the industrialization of East Asia, where more experts are still needed to come into the field.

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How was the process of industrialization, which took the West a century, achieved in 40 years in these four areas?

Author: Ezra F. Vogel

Publisher: Harvard University Press

Price: US$16

Pages: 138

How was the process of industrialization, which took the West a century, achieved in 40 years in these four areas?