During this period factor input increases, both in capital accumulation and in quality of labour through education, accounted for a massive degree of growth in industrial output, setting up Korea well for the next phase of development. The s saw a number of significant changes in the South Korean economy and marked the fourth and current phase of development, the push into high tech industry.
The World Bank data on high-technology exports sadly only extends as far back as , but even this shows a dramatic change. All of this was driven by the central state with a clear end-goal in mind and a range of effective legislative and policy tools for implementation. Aggressive reinvestment in infrastructure, state-owned industries and clearly communicated economic plans over a long period of time allowed for a progression through distinct phases of development even when reinvestment in the newer phases would have appeared the less optimal to individual market actors. Taiwan shares a similar story to Korea, although at least in economic terms its origins are marginally less humble.
Our story again begins at the end of a war, but Taiwan itself was left relatively unscathed by the fighting and still bearing the remnants of Japanese colonial attempts at development: some established agricultural exports in rice, sugar and pineapples, basic food processing plants and a handful of textile factories. Heavy industry was quickly established, in particular steel, electronics and petrochemical, as soon as the state ascertained that domestic and international demand was sufficient.
While Yongping Wu points out that small- to mid-sized firms had an important role to play during this phase of development,  the state never lost its firm grip over the direction of the economy. A key measure here was control of foreign exchange, limiting the access of private firms to imported materials and serving both to keep up domestic demand for processed raw materials which was done in state firms and onsold to selected firms and to reduce capital risk.
Vincent Chang describes the final phase in economic development, to fully-fledged technological state. Taiwan followed a similar trajectory to Korea in its progression through four distinct stages of development, though with two exceptions of note: first that light industry played a key role in the economy all the way into the s, and second that leadership did not seek to move beyond the first phase until threatened with aid reductions by the US.
The unexpected lack of decline in light industry once heavier industries were developed could perhaps be attributable to the role of small- and mid-sized industries as discussed by Chang — with most heavy industries nationalised but small-scale entrepreneurship tolerated, this is a logical industry to gravitate towards.
The second point is by far more significant, and may contain a clue as to the underlying reason that the Asian Tigers successfully developed through state-led, rather than market-led or interventionalist, methods. While not facing the challenges of rebuilding after a war, Singapore stood alone as a modern city-state with too little land to effectively feed its citizens. Food and water had to be provided for by imports, necessitating a quick push towards export-oriented light industries to balance trade.
Hong Kong is similar in many ways to Singapore, although it is notable for being the most consistently laissez-faire and therefore market-led of the Tigers. As in Singapore the pressing need to balance trade deficits due to poor agricultural potential led to a rapid development of light industry, but then advocates of market-led development would argue that the next steps through to trade and financial services would have been a logical step for market actors to take, given the proximity to China and the historical nature of Hong Kong as a trade port.
The importance of market actors in the development of Hong Kong cannot be denied, but there are some features of development glossed over in Neoliberal accounts that suggest that the state had a not-insignificant role in guiding the economy. In particular Vogel points to the allocation of public funds, with the vast majority diverted to developing the infrastructure that would be required by heavier industries — roads, universities, and most interestingly land development specifically for the use of factories; and all this a good decade before there was any significant market-led demand for these public goods.
Hong Kong, like Singapore, ended up as a financial centre for its region as well as a major industrial producer — not bad for a former entrepot. However this is not to say that the state had no hand in pushing development forward when the market might have been content to stay in one phase. When taken into consideration with the other Tigers, we have a clear idea of how their economies developed. In all cases barring to an extent Hong Kong, a strong central state created a long-term plan for development that saw it through from the early days of ISI all the way to the establishment of advanced technological or financial industries.
The state was able to implement these plans through a range of policy tools, without considerable domestic challenges and with the ability to adapt the details of the plans to the challenges they encountered along the way. Rather than dwell in any particular phases of development, the Tigers pushed forward, aggressively reinvesting in the infrastructure needed to establish the next phase and protect it from the advantages of the international market until it was ready to shoulder the burden of economic growth.
This saw them through, with some variation, from backwards islands, peninsulas, and losers in war, to four of the most powerful economies in East Asia. But can this success be replicated elsewhere? We may now have a model for economic development, but this does not not mean that we can easily transplant it to other parts of the world. Other countries, notably the Soviet Union, Maoist China and North Korea, have attempted to lead development from the state with little success.
Why was state-led development successful in the Tigers, but not elsewhere? And can we replicate this in other parts of the world? Advocates of market-led or interventionalist growth would say that we could not.
According to them the development of the Tigers, while ultimately successful, was highly idiosyncratic to the East Asian region and cannot be exported elsewhere, the universal alternative obviously being the liberalisation of markets to the varying degrees required of their models. Beyond the obvious objection that there are still a number of Confucian states in the early stages of development, Chang has considerable disdain for this argument.
How times and cultural stereotypes have changed. Indeed, when East Asia was still in the early stages of development the blame was placed as firmly on Confucianism as its current success is today.
A Brief History of Taiwan
Everything depends on what people do with the raw material of their culture. If the success of state-led development in East Asia cannot be attributed to their shared culture, then what? All four Tigers had a strong central leadership able to effectively steer the direction of the economy without significant internal challenges, an indication that all enjoyed considerable legitimacy. Most governments today derive their legitimacy from democratic elections — when the Obama administration makes a decision, the decision is made by the people and for the people.
But from where did the leaders of the Tigers derive their legitimacy? In all four cases, to varying degrees, the legitimacy and continued survival of the leadership rested in some way on the continual economic success that they were able to provide to the people. This meant that the leaders of all four of these countries had considerable motivation to aggressively seek sustainable development, and the fact that legitimacy was based on neither democracy which can lead to instability and a lack of long-term planning or ideology as in the Communist states, binding development to a prescribed course with no room for adaption allowed them to pursue this sustained development with stability and flexibility, explaining their particular success.
Park knew that he was relatively safe from uprising though apparently not from assassination because the USA would not tolerate the fall of an anti-Communist regime, meaning that he had considerable stability and the ability to make long-term plans, but he also knew that the best means to maintain legitimacy was by proving ideological superiority over the North by achieving greater economic gains. This manifested most obviously in the continued nationalisation of the steel, petrochemical, electronics and vehicle manufacturing industries, as all have an obvious military application.
- To Fetch a Thief (Chet and Bernie, Book 3);
- BBC - History - World Wars: Japan's Quest for Empire.
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- History of Taiwan - Lonely Planet Travel Information.
Taiwanese leadership needed these industries in particular to have a strong foundation in order to support their claims, both necessitating development and removing the potential obstacles of democractic instability and ideological inflexibility. If they had not industrialised and maintained a position of economic necessity within the region as trading ports and later as financial centres then they would not have been able to feed their population.
The legitimacy of its leadership was also tied to its status as a Crown property and it might ultimately have relied on Britain to support it should it have failed to develop successfully — this would account for it being the most laissez-faire of the Tigers. In the cases of all four Tigers we see a clear trend in the leadership and the location of its legitimacy — to varying degrees the position of the leadership is sustained and justified by the economic development that they were able to deliver.
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- Platform Ecosystems. Aligning Architecture, Governance, and Strategy.
- by Gary M. Davison?
- Rise of the Machines: A Cybernetic History.
Because they did not rest their legitimacy upon democracy or ideology, leadership not only had the motivation to aggressively pursue development, it had the ability to do so with stability of government and flexibility of approach. So how could we replicate the success of the Tigers in other developing states? The crucial element is the leadership.
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The biggest issue facing developing states is that in too many cases the leadership rests its legitimacy not on the economic benefits that it can bring to its subjects but rather on the military forces that it commands and with which it can suppress any dissent. In order to rectify this situation, and to encourage development in states sorely in need of it, some drastic measures must be taken.
Statebuilders need to generate in state leaders a pressing urgency to pursue sustained economic development that will make the government stable non-democratic flexible not bound to ideology and motivated to actively pursue sustainable development progression. Here overzealous democratisation poses its own danger, quite apart from any criticism of market liberalisation in developing states. Democracy at best provides a degree of instability in leadership — it is hard to make effective Five Year Plans as in South Korea when the government could be radically different as little as three years into the future, let alone long-term plans for development of key strategic industries as in Taiwan.
At its worst, democracy provides yet another legitimisation for leaderships primarily concerned with its own benefit and not sufficiently motivated to aggressively push through development plans. Ultimately the pattern of economic development achieved by the Asian Tigers is replicable elsewhere in the world, if the key issue of legitimisation and the role of the leadership in development is addressed.
However it may require some rethinking of the priorities of statebuilding exercises, and other goals like the establishment of democracy may need to be pushed back in order to maintain the stable, flexible, and economically-motivated leadership that seems to be required for effective state-led development. In contrast to the Neoliberal approach of market liberalisation and faith in the rationality of individual actors, this model describes a strong central state utilising a range of policy tools to aggressively pursue development even against the wishes of market actors.
This sees development follow a clear progression through ISI, light industry, heavy and chemical industries, and then finally technological industry, with the export revenue of each stage being used to fund the next and heavy protection from the international market until industries have been sufficiently established. Rather than being a product of particular cultural values, the success of this model in East Asia can be attributed to the unique pressures placed on the leadership of these states to pursue economic development lest stagnancy threaten their legitimacy.
Yes and no. The government operating on Taiwan is a self-sustaining, fully functional, democratically-elected government unrelated to Beijing with its own economy, currency , etc. Whether or not Taiwan is an independent "country" is a very large grey area which cannot possibly be covered in the scope of this article, however it is important to note that Taiwan has been governed separately from mainland China since when the ROC government relocated to the island after military defeat by the communists, and locally governed since the s as opposed to politicians from mainland China who fled to Taiwan.see
Is Taiwan Really a Beacon of Freedom? - The Atlantic
What's most important for visitors to understand is that visiting Taiwan from a legal and visa standpoint is that it is different from mainland China. By many standards, Taiwan is more advanced due to its free-market economy and high-performing industries, and the people are famous for being polite and well-mannered with an overall higher education quality and English proficiency, especially around Taipei and with younger Taiwanese. Less frustrations are experienced in Taiwan with regard to daily tasks, as infrastructure is highly developed, so there are no worries about transit services, bank and currency exchange, utilities, open internet, or interactions with authorities, and the better environment is a result of the Taiwanese passion for recycling and conservation.
As one of the "four Asian tigers", Taiwan's economic growth propelled the island forward toward its democratic dawn in the late s, and today is a multi-party, full democracy. The media in Taiwan is different from mainland China in that while media content is contained in mainland China, Taiwanese media thrives, and is the base for the Mandarin Chinese Pop Music industry, as well as a major regional hub for production of Chinese-language media.
While the local film industry has recently been underperforming due to increasing Hollywood competition, the media industry as a whole looks across the strait to the large Chinese market, who has become the largest consumer of Taiwanese media. Recent investments from Chinese entities in Taiwanese media have introduced mainland programming to Taiwan, as well as changes in news reporting.
Economic interests have complicated the relationship across the strait, and the situation grows more complex as the original participants in the conflict have long passed on.
Taiwan is severely limited in its diplomatic capacity as well as its ability to participate in international organisations and events due to the ongoing conflict with the PRC. Most notably, the Taiwanese Olympic Team must compete under the ambiguous name "Chinese Taipei" and use an alternate flag and anthem, and more recently has been declined admission to events such as the World Health Assembly even though Taiwanese scientists and officials were major contributors to containing the SARS endemic , and private citizens have been declined visitation entry to UN facilities.
As any local will tell you, Chinese history and China as a nation has existed for over five thousand years.