Japan and the Four Little Dragons: Taiwan, Singapore, South Korea & Hong Kong

1. Japan and the Four Little Dragons: Taiwan, Singapore, South Korea & Hong Kong In Search of an East Asian Development Model

2. Japan and the Four Little Dragons: Taiwan, Singapore, South Korea & Hong Kong • The economic success of Japan and the four little dragons have contributed to the speculation of the existence of an East Asian development model. • The relevance of the East Asian development experience to still developing nations depends largely on whether an identifiable economic model underlies and largely explains the economic success of the five nations of East Asia - Japan Taiwan, Singapore, South Korea and Hong Kong. • There are two dominant views to this. • The first view suggests that East Asian success is based largely on socio-cultural values and institutions. • While the other view supports the notion that their economic success is due largely to their economic strategy.

3. The aforementioned nations have several key economic features in common, including: high growth rates which have been sustained over many years, the occurrence of diminishing income inequality, improvement in material standards of living for the entire population, a highly active governmental role in shaping the development process, an underdeveloped welfare state, low tax rates and high savings rates, and an economy geared towards exports. • These economic features do not operate in isolation, instead they are linked to distinctive social and cultural features that are part of the East Asian model, but what remains unclear is the extent to which the economic and socio-cultural features are causally linked.

4. Although it is reasonable to classify the East Asian countries as a single category economically, with Japan leading by example; it is nearly impossible do so in regards to their individual political systems. • Today, Japan is a firmly institutionalized democracy, while both South Korea and Taiwan are partially democratic and partially authoritarian systems. While Singapore and Hong Kong share a history of British colonization; Singapore now has a parliamentary system with regular elections, while Hong Kong became a Special Administrative Region (SAR) of China on 1 July 1997. It is now subject to a "one country, two systems" formula in which China’s socialist economic system will not be practiced in Hong Kong, and the territory will continue to enjoy a high degree of autonomy in all matters except foreign and defense affairs. • Despite some of these recognized differences, there are valid reasons for treating the East Asian nations as a common category, as all five share an export-led growth pattern, strong governmental policy making, and Confucian cultural traditions.

5. In the past, most scholarly study has focused on the “Western” model of development and its capitalist characteristics. • This presentation will attempt to bridge this gap by determining whether or not there is an East Asian development model, and the extent to which socio-cultural factors rooted in Confucian ethics are causal links in economic development.

6. In search of an East Asian Development Model • As noted in the Huntington text, Weber treats the process of development as though it were an obstacle course for developing nations, in which the starting point is one of traditionalism and the ultimate objective is that of modernization, describing it as a transition from the authentic to the deformed.[223] • For Weber, a religion that was not sympathetic or supportive of the development of capitalist traits was considered a hurdle or barricade to the ultimate goal of modernization. • It was thought that Asian values - such as frugality, family, loyalty, and a culturally expected avoidance of attaining personal wealth - would not be supportive of new technologies and risky business ventures, and would ultimately fail to generate a sufficient amount of capital and resources that would be needed to produce the kind of economic growth that is typical of a Western capitalist system.

7. “Are there cultural or religious-ethical roots of modern Asian capitalism?” • It can be plausibly argued that in East Asian nations today, even the most modernized sectors continue to adhere to values of collective solidarity and discipline, and have achieved great economic success despite the presumed barrier these values were to provide. • This in turn raises the questions, • “Are there cultural or religious-ethical roots of modern Asian capitalism?” • Has East Asia successfully generated a non-individualistic version of capitalist modernity?

8. “Asian Values” • To begin with, Confucianism while possessing a core set of values has been practiced in different ways throughout East Asia. • The core values include: “a strong emphasis on education, orderliness, achieved through tightly structured social relations based on the family model; and perseverance and diligence in undertaking matters involving one’s work, family, or social obligations.” [106, Tai] • Adherence to this Confucian ethic is thought to produce a member of society that is hardworking, responsible, skillful, ambitious (within understood limits) and creative in helping the group, be it family, the community or company. • Confucian societies have their varieties.

9. Japanese Confucian Ethic • Japan for instance, is in some ways the most formal and hierarchical modern society, and has retained a great many of its traditional customs. • The nation’s selective adaptation of Confucianism has provided her with: strong and responsible leadership, well-defined goals and persistence, a strong national group consciousness and solidarity, and a strong stable political system.

10. The Japanese Worker • Japanese workers are industrious, willing to work overtime and typically work longer than 48-hour weeks. They are well educated and highly skilled; and thus provide an ample supply of efficient and skilled labour. • Loyalty of employees has greatly contributed to the ability of companies to adapt and adjust management policies in the face of changing business conditions. • This loyalty is accompanied by the guarantee of lifetime employment in Japanese corporations. • When a worker is employed for life, wages are not adjusted to reflect levels of individual productivity; instead they are based on total years of service. • The incentive for capable workers is instead a system of bonuses and vertical movement, in order to ensure lower rates of labour mobility.

11. South Korean Confucian Ethic • In the case of South Korea, its long historical ties with China have contributed to the persistence of Confucianism in all phases of the country’s social life, and initially behaved as a impediment to economic development as it had entrenched values that shunned the accumulation of wealth, de-emphasized innovation and technology, and undervalued work, especially manual labour. • Therefore one of the conditions affecting economic performance is the people’s attitude towards work. • Korea’s idealization of the cultured man, made it difficult to create conditions that would foster economic development.

12. Throwing the hurdle from the track • Many things have caused the change in Korea’s social outlook. • First of all, Japanese rule dispelled of the traditional institutions that were inhibiting economic progress, and in turn, modeled much of the Korean government on its own modernized system; establishing market-oriented economic institutions, effective enforcement of law and order, and provision of essential public services. • In this sense Japanese colonization provided some of the impetus for economic development sooner than that which would be achieved if the reforms had not occurred.

13. South Korean Confucian Success • It was then that South Korea’s most prized Confucian ethic was employed - the emphasis on learning and education, as it would provide a skilled work force for the economy. • The other feature that has faired well for South Korea is the high prestige and respect that is attached to governmental positions. • This association has enabled the government to recruit highly qualified personnel for public services, and has proved useful in achieving societal acceptance of government led economic policies and initiatives in the modernization process.

14. Singapore Confucian Ethic • In the experience of Singapore, the government sought to use the Confucian ethic to encourage popular support for economic policies and change. • The adoption of this strategy resulted from the release of two government reports in the 1980s on worker’s attitudes. Findings revealed that many employees were lacking in loyalty and the proper spirit; job-hopping, reluctance to do shift-work, and adherence to narrow job specifications were noted. [214 Bellows]

15. esprit de corps • To curtail these negative attitudes the government reverently called for Singaporeans to develop a group orientation in its national culture, stating that “we can build up this team spirit...where every individual gives of his best for the team. The team in turn, takes care of the individual, fairly and equitably. The art of the of the government is the art of building up this team spirit.” • The Singapore experience is demonstrative of the emergence of a national ethos that was to serve as a method of binding the population, and thus stabilizing the society during a period of rapid modernization and accompanying social and economic changes.

16. East Asian Valuesand Economic Development • Economic progress is a product of a combination of factors including hard work, discipline, and governmental guidance and market forces. • East Asians are similar to people of other modernizing nations as they are permeated with Western capitalist values, such as individualism, materialism and self-gratification. • It would be false to say that these values did not materialize at all in East Asia, instead the national governments have sought to curtail their evolution by encouraging subscription to the “neo-Confucian spirit.” • This philosophy emphasizes hierarchy, order, reciprocity, loyalty and rule by the ablest and most virtuous.” • It is through adherence to these principles, that East Asian governments believe their societies will remain courteous, industrious, family oriented and patriotic, and thus would allow for continued economic success and a population that would be receptive to change.[214-215, Bellows]

17. Looking to the Future • In modern times, East Asian nations have adhered closely to the following economic principle: “encourage themselves to produce and encourage others to consume.” [24, Tai] • The following common factors serve as partial explanation for the fast growth rate and responses of East Asian nations: • the high rate of capital accumulation • the high saving ratio • transfer to technology in agriculture and industrialization • highly qualified human resources with declining fertility rate • virtuous circles of export-led growth in the open economies • the locomotive roles of the United States and Japan • relatively sound fiscal and monetary policies • tolerable distribution of income • fairly reliable public and private institutions • infrequency of social unrest and political instability

18. Is There an East Asian Development Model? • In answering the question as to whether or not the lessons of East Asian economic development can be applied to other still developing nations; • There are three major elements affecting economic performance that may not be easily reproduced elsewhere: “societies and elites under pressure to perform, a relatively egalitarian distribution of wealth, and a set of cultural attributes that were favourable for economic development.” [77, Berger] • The economic strategy that was adopted is transferable, however there can be no guarantees that same levels of economic success can be achieved without its accompanying value system.

19. In Conclusion • It is the adoption of a government led export-oriented economic strategy conducted within a society indoctrinated in varieties of Confucian ethic, that have facilitated and accounted for the rapid economic growth and modernization demonstrated by Japan and the Four Little Dragons.

20. Bibliography Berger, Peter L., and Hsin-Huang Michael Hsiao, eds., In Search of an East Asian Economic Development Model (New Brunswick, New Jersey: Transaction Inc., 1988). Davis, Winston, “Religion and Development: Weber and the East Asian Experience,” in Understanding Political Development, eds. Myron Weiner and Samuel P. Huntington (Prospect Heights, Illinois: Waveland Press, 1987), 221-281. Glazer, Nathan, “Two Cheers for ‘Asian Values’,” The National Interest 57 (Fall 1999), 27-34. Ichimura, Shinichi, Political Economy of Japanese and Asian Development (Kitakyushum, Fukuoka: Springer-Verlag Tokyo, 1998). Tai, Hung-chao, ed., Confucianism and Economic Development: An Oriental Alternative?,” (Washington, D.C.: The Washington Institute Press, 1989).