This article discusses the contrasting trade orientations of the East Asian newly industrializing economies — the four tigers — and Latin America. It questions some myths about the ingredients of East Asian policy success and draws attention to the underlying geopolitical factors that help to account for the contrasting trade performance of the two regions. It concludes that the East Asian experience is at least as aberrant as that of Latin America and that to call the former a model is a misnomer since the most essential ingredients are not transferable.
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References
1.
1. World Bank, World Development Report 1987 (New York: Oxford University Press, 1987), pp. 92, 94. The evidence described here as “convincing” is, in fact, extremely thin: (1) the trade regimes of Hong Kong and South Korea are profoundly divergent both in history and in content; (2) correlation does not establish causation; (3) in a causal association the time lags should be indicated; (4) a sample of three countries is too small to establish a general rule, especially when one of the three — Singapore — has to be excused as an exception (see ibid., p. 92); (5) the sample omits the fastest-growing developing country, which was not an East Asian super exporter. Botswana's per capita income grew by 8.3 percent per annum between 1965 and 1985, compared with 6.6 percent per annum for South Korea and 6.1 percent for Hong Kong.
2.
For a more solid discussion, see Gustav Ranis and Louise Oppock, “Latin America and the East Asian NICs: Development Strategies Compared,” in Latin America and the World Recession, ed. Esperanza Durán (New York: Cambridge University Press, 1985), pp. 48-66.
3.
Similarly, OECD Economic Outlook, no. 44, p. 59 (Dec. 1988), foresees a rise from 7.7 percent to 8.8 percent in the four tigers' share of world exports between 1987 and 1990, during which period Latin America's share seems certain to languish at around 4.0 percent, the lowest level this century. The United States' share is expected to remain below 12.0 percent.
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4. The seeming uniqueness of the British colonial regime in Hong Kong may preclude its inclusion under these headings. In fact, power is shared between the formal political authorities, some business interests, and the representatives of Beijing, but this tacit condominium rules over a highly disciplined and centralized society and can adopt a relatively long view, that is, at least to 1997.
5.
Cf. Robert Wade, “East Asian Financial Systems as a Challenge to Economic Orthodoxy: Lessons from Taiwan,”California Management Review, 27(4) (Summer 1985).
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6. Paradoxically, both deviations from the mainstream of world trading practices have been blamed for contributing to the U.S. trade deficit. The four tigers hurt the U.S. trade balance by their lopsided emphasis on exporting, while poor Latin American export performance causes them debt-servicing problems and thus an inability to finance imports from the United States.
7.
7. See Dal-joong Chang, Economic Control and Political Authoritarianism: The Role of Japanese Corporations in Korean Development, 1965-79 (Seoul: Sogang University Press, 1985).
8.
8. Korea: Managing the Industrial Transition, pp. 38-39.
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9. With the establishment of democracy, South Korea's military attitude toward social discipline could also begin to ease. In 1988, the Ministry of Defense admitted that over 6400 military personnel had died since 1980, including 2200 reported suicides and 299 killed in assaults by superiors on juniors. The major parties have called for a thorough investigation. Similarly, some large firms that employed armed gangs to intimidate labor activists are now under pressure to reconsider their employment practices.
10.
10. Jorge Luis Borges, The Book of Imaginary Begins (New York: Penguin, 1974), p. 13.
