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The East Asian Experience of Economic Development and Cooperation Kenichi Ohno
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tarix | 28.07.2018 | ölçüsü | 0,75 Mb. | | #59473 |
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Kenichi Ohno National Graduate Institute for Policy Studies
Background Polarization of the developing world into high and low performers East Asia as a high performing region - --Diversity in size, income, culture, etc.
- --Failures and bad periods also existed
- --But high growth was sustained in most countries and over the long run
Graph: GDP in EA vs Africa
Graph: growth over time
Graph: size comparison
Graph: wars and conflicts
East Asian Development Growth driven by trade and investment Collective growth, not isolated or random Region as an enabling environment for catching up (model and pressure)
“Asian Dynamism” Geographic diffusion of industrialization Within each country, industrialization proceeds from low-tech to high-tech Also known as the Flying Geese Pattern Clear order and structure (with a possibility of re-formation)
Flying Geese 1
Flying Geese 2
Flying Geese 3
Graph: per capita income
Graph: manufactured exports
The Role of Government In low-income or transition economies with undeveloped markets, privatization and free trade alone may not lead to prosperity Unregulated markets may be unstable and polarize income (domestically and globally) Escape from the vicious circle of low income, low saving and low productivity
High level of education Export promotion High savings and investment Income equality and shared growth Good government-business relationship “Selective intervention” These are tools needed to join the regional production network, which each country must prepare
Basic Roles of East Asian States Political stability and social integration (precondition for development) Task 1: Create a competitive market economy Task 2: Initiate and manage global integration Task 3: Cope with negative aspects of growth - (emerging income gaps, congestion, pollution, corruption, etc.)
Authoritarian Developmentalism What if the government is weak? East Asian answer: install a strong state with economic capability - --National obsession with industrialization and export competitiveness
- --Powerful and economically literate leader
- --Elite team to support the leader
- --Top down: not necessarily “democratic” by Western standards
Rise & Fall of Auth. Developmentalism Established under severe threat to national security or unity Often by military coup Replaces a previous weak government Economic growth legitimizes the regime Over time, its own success undermines legitimacy and leads to democratic transition (Korea, Taiwan)
Redefining “Good Governance” - --Strong leadership with ownership
- --Administrative mechanisms for policy consistency and effective implementation
High-performing East Asia did not have - --Transparency, accountability, participatory process, clean government, privatization, free trade
- (maybe not necessary for initiating growth?)
Role of Regional Cooperation To maintain Asian dynamism, regional efforts are essential Avoid or remove difficulties and crises Present visions to reduce uncertainty
From Market-led to Institution-led Previously, - --Integration by private sector (trade, FDI)
- --Open regionalism
- --Informal and voluntary
Now, institutionalization has begun - --“ASEAN+3” is the main framework
- --AFTA, ARF, ASEM, AIA, IAI, Chiang Mai Initiative...
- --Bilateral and regional FTAs are proposed (some concluded)
- --Initiative for Development in East Asia (IDEA)
Remaining Issues for East Asia Maintaining regional peace and security Narrowing the gap between early developers and latecomers Promoting globalization while mitigating its negative impacts HRD, institution building, governance for strengthening competitiveness
East Asia Should Also: Project its views to the world - --Markets must be managed properly
- --Diversity, not uniformity, in development strategies
- --IMF’s wrong response to the Asian crisis
Study the new modality of industrial promotion in the age of globalization - --Neither laissez-faire nor protectionism
Japan’s Role in East Asia 1. By far the largest ODA donor 2. Large trading partner (together with US, EU) 3. Japanese firms are chief architects of regional production network through FDI (especially in electronics) 4. Regional leadership? 5. Economic vitality?
Japanese ODA Two-track principle - (1) For the prosperity of Japan and East Asia
- (2) For solving global issues (poverty, health, education, environment, refugees...)
Helping the “self-help” effort of LDCs - --To grow and become equal trading partners
- --Infrastructure, HRD, policy/institutional support
- --Coping with growth-induced problems
Poverty Reduction in East Asia Extreme poverty in East Asia already halved - (1990: 27.6% 1999: 14.2%)
National strategy for equitable growth in place Aid coordination centered on pro-poor measures unlikely to work in East Asia Vietnam: strong ownership, growth and equity, PRSP under existing national strategy - (Does Vietnam really need an externally imposed PRSP?)
Implications for Africa Simple replication will not work - --Different situations, no regional network
- --However, methodology for policy formulation can be transferred
Africa must balance: - --Fight against poverty (humanitarian)
- --Growth generation (for long-term self support)
Japan’s Approach Emphasizes: Respect for each country’s uniqueness Long-term and holistic perspective Real-sector concern (trade, investment, key industries, technology...) Help in good times as well as bad - This can complement the current approach based on short-term conditionality, frequent monitoring and globally common framework
Steps to Japanese Involvement First, build domestic support for more aid to Africa (but ODA is being cut) Select a few countries and study deeply - --New selectivity criteria for growth
- --Create a permanent policy research team
- --Work with government, IFIs, other donors
- --Support “growth” component of PRSP
Propose a concrete and realistic strategy, with additional ODA
Last Words Japan already extends such policy support to Vietnam, Laos, Myanmar, Mongolia... - (but it must be further improved)
Ad hoc, short-term involvements are unlikely to produce lasting results
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