POL202(5) Handout

POL202(5) Handout - POL 202 (5): Japan and the...

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POL 202 (5): Japan and the Newly-Industrializing Economies From about 1965 to 1995, East Asia was by far the most dynamic and fastest growing region in the world, with relatively equal income distribution After the Meiji Reforms, Japan became the first industrialized economy in East Asia. Following in Japan’s footsteps, South Korea and Taiwan, together with Hong Kong and Singapore, became known as the “newly-industrializing economies” or NIEs. We shall concentrate our discussion of the NIEs on the two bigger northeast Asian economies – South Korea and Taiwan What are the major characteristics of the development of Japan and the NIEs? A) Industrial Policy - Governments set the directions in strategic planning and cooperate with the private sectors to promote specific industries B) Export-Oriented Industrialization – Governments and the manufacturing sector share a commitment to export-oriented growth by accepting the discipline that price and quality are to be measured by international standards and wages will be tied to productivity. Exporters were given exemptions from duties on imported capital raw materials, allotted foreign exchange, provided subsidized credits, and protected from competition in the domestic market C) Following the Leader - The sequence of exported manufactures was the same as Japan, except that the NIEs followed one step behind in the product cycle. The successful ascend of the NIEs left them with a high dependence on Japanese imports of technology and capital What are the main elements ( factors ) in the Japan and the NIEs success stories? 1) Special circumstances . The NIEs are creatures of unusual historical circumstances. Taiwan and South Korea acquired many of their infrastructures under Japanese colonial rule. As frontline states against communism, South Korea and Taiwan received economic aid from the United States in an excess of a billion U.S. dollar from the early 1950s to the mid 1960s. U.S. guaranteed both military security and market access to these two economies, and to Japan, technological transfer as well 2) Land Reform and Labor Release . Both authorities on Taiwan and South Korea 1
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redistributed land from absentee landlords to farmers. This redirected idle capital from land speculation to manufacturing and commercial activities, and raised investments and productivity in agriculture. Raising agricultural productivity means that labor was continually released from the countryside to the cities to form a low-cost and discipline industrial workforce. To increase the number of skilled workers, the governments of Taiwan, South Korea and Japan were willing to invest heavily in education 3) Political consensus on economic development as an overriding national objective
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This note was uploaded on 04/18/2008 for the course PSCI 000 taught by Professor Hongkong during the Fall '07 term at Mary Washington.

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POL202(5) Handout - POL 202 (5): Japan and the...

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