Japan And Asia: Economic Development And Nation Building

Economic Development and Nation Building

Shinichi Ichimura

• Publisher: WSPC
• Year: 2015
• ISBN:
  9789814632119
• Topic: Biowissenschaften
• Subtopic: Wissenschaft Allgemein

The book is a precious reference book for development economics or the political economy of development in Asia or anywhere else. Unlike other books, first, it deals with all the East Asian countries, including Japan and other Asian countries. Second, it offers some empirical research findings based on surveys conducted by the author's group. Research on developing countries has been limited by individual scholars' observations, particularly about the value-related issues like politics or religions. Thirdly, the book digs into the nation-building problems which are often neglected by economists. It bridges the politics, sociology and economics in East Asian countries and is an important reference book for graduate students.The book is a precious reference book for development economics or the political economy of development in Asia or anywhere else. Unlike other books, first, it deals with all the East Asian countries, including Japan and other Asian countries. Second, it offers some empirical research findings based on surveys conducted by the author's group. Research on developing countries has been limited by individual scholars' observations, particularly about the value-related issues like politics or religions. Thirdly, the book digs into the nation-building problems which are often neglected by economists. It bridges the politics, sociology and economics in East Asian countries and is an important reference book for graduate students.Undergraduates, graduates and researchers who are interested in development economics or political economy of development in Asia.Key Features:It is a comparative study of Japan and all other East Asian nationsIt is based on the author's own empirical survey findings in Southeast Asian countriesIt deals with the nation-building issues along with economic development and offers new viewpoints of the author

Part I

The Present and the Future of Japan and Asia

Chapter 1

When Can Asia Play a Leading Role in the World?*

1. The West versus the East

Before the Industrial Revolution, no serious difference in the historic process existed between the East and the West. But the political economy of world affairs has completely changed since. The fundamental reason was that the West succeeded in obtaining significantly faster and better means of transportation: Steam engines. This technological advantage, combined with the adventurous political ambition, resulted in the West subjugating the East. In the 20th century, however,Asian responses to the Western challenge began. Now, no colonies exist in the world. Nevertheless, the world is still led primarily by Western powers: namely, in world politics, G-5 (permanent members of the UN Security Council — US, UK, France, Russia, China); and in economic and financial matters, G-7 (US, UK, France, Japan, Germany, Italy, and Canada). In Culture, Science and Technology as well, these countries are leading the contemporary world, as proven by the fact that so many bright students still go to the West to learn. However, not all Asian nations are far behind in many cultural and scientific spheres, but clearly no one can say that Asia is playing a leading role in those areas. Then, when can Asia play a leading role in polity, economy, culture, science and technology? Or how should we think about this problem from an Asian perspective? Certainly this is beyond economics. Allow me to dare to express my personal views on this broad problem. Since the central stage of the world is the Eurasian continent and North America, let us begin by observing the major events and ideological trends, after World War II.

2. Dream and Disillusion of Socialism

Joseph A. Schumpeter, well-known author of Capitalism, Socialism and Democracy (1942), wrote his last article: “A March to Socialism” in his dying bed, and Mrs J.A. Schumpeter read it at the AEA convention before he died in 1950. It was included only in the second and final edition of the book in 1953. It reflected a fashionable way of thinking, not only among Marxists or Communists, but also many economists and intellectuals in the world, immediately after the War. A warning by von Hayek in The Road to Serfdom, 1944, was regarded as reactionary and unpopular in the 1950s. After postwar reconstruction was over, however, stagflation hit the Western economies. Keynesians who could prescribe good policies so far and in the 1930s could not offer any good policies or reform ideas against excessive government intervention or regulations. New policies and reform plans came from conservative “liberals” like Friedrich von Hayek and Milton Friedman. Those policies were implemented by President Ronald Reagan in the US and Prime Minister Margaret Thatcher in the UK.Admittedly, they greatly improved the efficiency of the West-European and North-American economies. This success recovered the trust in the Free Private Enterprise System.

3. Transition from Socialist to Market Economies

On the other hand, the performance of the planned economies in the Soviet Union and its satellite countries were just miserable after postwar recovery. The lack of liberty under dictatorship finally caused the break-down of the Soviet empire by Gorbachev and Yeltsin. The transformation of Central and Eastern European countries to market economies quickly followed. This opened a road for the European Union and led to the establishment of an orderly region in the western corner of the Eurasian Continent.

4. China and India Crossing the Rubicon

Even before Europe, Chinese leader Deng Xiaoping declared “Reform and Opening” in 1979, after the two blunders by Mao: the Great Leap Forward and the Cultural Revolution. Thereafter, transition to a market economy in China has proceeded more successfully than in the former Socialist countries of Europe, as our book describes. (See: Ichimura, Sato and James, 2009.) Its success in economic performance has been very impressive and by the end of 2010, China’s GDP will exceed that of Japan.

Recently, India also joined this march. She has been politically democratic, but economically socialistic and now it is transforming itself into a market economy. Its development in recent years has been remarkable, 8–9% per year. With these two Asian giants joining in the march to capitalistic development with Japan, Korea, Taiwan and ASEAN plus Oceania, some may think that Asia will soon play a more leading role in the New World Order. However, my personal view is that it would be unlikely in this century for several important reasons.

5. Modernization of Asian Nations

Almost all theAsian countries have histories, but have not yet developed into modern states. To transform an old state into a modern state, as Max Weber argued, at least four factors are essential: (1) a modern military system; (2) a bureaucracy; (3) a business enterprise system, particularly joint-stock companies; and (4) a nationalistic spirit to unite the nation. However, it is not easy to satisfy these conditions, with the last condition being the hardest, especially in multi-ethnic countries.

The famous Indian planner, Dr. P. C. Mahalanobis in response to my question to him in Osaka, in the late 1950s: What the greatest difficulty was after independence? “National unification” was his reply. Most Asian countries are multi-ethnic and have multiple religions. This implies that nationalism must be strong enough to unite such heterogeneous people, so it must be enhanced. Thus, British India had to be divided into several states: India, Pakistan, Sri Lanka, Bangladesh and Myanmar. Large states face great challenges maintaining unity as new modern states. Countries like China, Pakistan and Indonesia face such problems. It implies that they are likely to be domestic-oriented, rather than trying outwardly to make contributions to international cooperation.

6. Expansionism After Revolution or Independence

Enhanced nationalism after revolution or independence is likely to lead to expansionism. This was a warning by C. Brinton in The Anatomy of Revolution (1938) and in C. Gustavson’s A Preface to History (1955).China may be facing this problem at this stage. We have seen many historic precedents such as Napoleon or Stalinism.

7. Economic Development May Cause Political Instability

In addition, even with a successfully growing domestic economy, new nation-states may face political instability, because as S. Huntington pointed out in his Political Order in Changing Societies (1968), development causes income inequality which leads to social mobility and requires more political participation. If the social system is not adjusted to the new socio-political environment, political instability will be a consequence. Governance of authoritarian central governments may be endangered. This was based on his studies on Latin American countries.

Furthermore, economic development itself poses two barriers to overcome in the stages of development: One is the $2,000 hurdle to shift from an agrarian to an industrial society and the other is the $10,000 hurdle to establish the industrial-complex. Another problem with economic development is how to deal with regional discrepancies. The larger the size of the country, the more serious will be the regional disparities. As a result, decentralization policies become necessary against the power elite in the central government. (See Ichimura and Bahl, Decentralization Policies in Asian Development, 2008.) Indonesia is a typical example.After the Suharto regime was gone, the Indonesian government wisely changed its regional development policy toward decentralization.

At any rate, a simple linear extrapolation of the recent trend into the future is a misjudgment often committed by many economists. On Japan, futurologist Herman Kahn said in 1971, “the 21st Century may be the Japanese Century” to please Prime Minister Sato, and Ezra Vogel wrote the bestseller, Japan as Number One in 1979. They were, of course, superficial. Soon Japan suffered from the lost two decades.

8. Importance of Statesmen

Most Asian developing countries must overcome these difficulties one by one. It is not just a simple process of economic policy-making. Often it requires wise and powerful statesmen’s leadership, as the reform in the Soviet Union by Gorbachev and Yeltsin, because most policies imply serious conflicts of stakes. China’s reform was possible only by the leadership of Deng Xiaoping, so the roles of great leaders are essential for any country in Asia. The great Japanese sociologist Takata Yasuma (1939) once said: “economy is subjugated to polity”. Unless great statesmen reappear in a number of Asian countries and suc...

Table of contents

• Cover
• Half Title
• Title
• Copyright
• Contents
• Preface
• Detailed Table of Contents
• List of Figures and Tables
• Acknowledgments
• Introduction My Research on Asian Development
• Part I The Present and the Future of Japan and Asia
• Part II The Stages of Economic Development and Nation Building
• Part III Empirical Survey Studies of Southeast Asia
• Part IV Political and Cultural Problems of Asian Nations
• Subject Index
• Author Index