Asia’s development has been so successful that it has been labeled a “miracle.” However, if this is true for economic growth, the picture looks far less impressive if you look at other dimensions of economic development. A return of leadership is needed.
Looking at Asia’s phenomenal economic growth figures since the second half of the 20th century, it becomes easy to understand why international observers have used the word “miracle.” From 1975 to 2000 East Asia grew faster than any other region in the world, performing average per capita growth rates of 6 percent. One example gives the picture of the so-called miracle: South Korea, only as rich as Ghana in 1960, is now a OECD member posting a GDP per capita at purchasing power parity higher than Italy.
Which factors contributed to the Asian miracle? Of course, many were the drivers behind it, such as higher level education, huge saving rates and the crucial role played by the United States as regional security provider and huge market suitable for exporting goods. Nonetheless, what really distinguished the Asian economic path from the rest of developing countries was leadership. Bright-minded entrepreneurs and forward-looking politicians worked not only to seek personal profit, rather they were committed to create economic renaissance for their nations. From Sony’s Akio Morita to Wipro’s Azim Premji, from Singapore’s Lee Kuan Yew to Korea’s Park Chung-hee, inspiring leaders were the backbone of the early stages of each Asian economy, as Michael Schuman writes in “The Miracle” (Harper, 2009).
Think about it. Why did Indonesian Ph.D. scholars educated in the U.S., the so-called “Berkeley Mafia,” who understood and got to know Western democratic values, decide to work under Suharto and accepted his authoritarian stance? Why did Albert Winsemius, a Dutch economist and U.N. official, join Lee Kuan Yew despite having such a different background and understanding of personal freedom and democracy? For there was a genuine, contagious dynamism born out of a common vision: increasing the nation’s general level of prosperity.
Now, Asia is at a crossroads, for it eventually reached a “miracle of riches,” not yet a “miracle of life,” as Charles Kenny described it in his book “Getting Better” (Basic Books, 2011). Overall Asia’s development experience has been one of success and an example for other parts of the world. Nevertheless the aspects of development other than economic growth, from income inequality to social inclusion to rapid urbanization, have not achieved comparable results. In terms of improving quality of life, the Middle East and North Africa did relatively much better than East Asia in the last 50 years. Publications by the Asia Development Bank have shown that inequality has been on the rise throughout East Asia during the 1990s-2000s. Even Japan, a country where a relatively equal income distribution was its trademark of postwar economic development, has seen rising income inequality among working age people.
As Justin Lin puts it, economic development is a “dynamic process” that “requires industrial upgrading and corresponding improvements in ‘hard’ and ‘soft’ infrastructure at each level.” Along this process ― Lin argues ― the governments should put in place policies aimed at “facilitating industrial upgrading and infrastructure improvements,” which means matching ongoing economic growth with the other dimensions of development.
At the beginning of the miracle, leaders across the region well understood the paramount importance of rapid growth to walk away from extreme poverty conditions and climb the technology ladder. At present, Asian political and economic actors should equally realize that for sound economic growth to be maintained in the long run, the other dimensions of economic development must be taken into consideration and addressed. Leadership is needed again.
By Emanuele Schibotto
Emanuele Schibotto is Ph.D. candidate in geoeconomics at the Guglielmo Marconi University in Rome. He also is coordinator of Equilibri.net, an Italian think tank and online magazine on geopolitics and international relations. ― Ed.
