Transcript Why is East Asia Rich? - Cal State LA

POLS 373 Foundations of
Comparative Politics
Lecture: Why is East Asia Rich?
Part 1, Brief Introduction
Why is East Asia Rich?
Map of East Asia
With Japan,
South Korea and
Taiwan. China and
North Korea are also
considered part of
East Asia
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Why is East Asia Rich?
 Before we address the “why” question, we
should begin with an even more basic task,
which is simply to determine if, in fact, East
Asia is rich
 Let’s consider some basic facts, first about
South Korea and Taiwan …
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Why is East Asia Rich?
 South Korea and Taiwan have achieved
astonishingly high rates of economic growth
between 1960 and 1990
 In Taiwan, per capita income increased from
$50 in 1970 to $2,500 in 1984
 In South Korea, the figures were $87 in 1962
and $1,709 in 1983
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Why is East Asia Rich?
 By 2004, per capita income (in PPP$) increased to
$25,300 in Taiwan and $19,200 in Korea, making
both countries very well off in relative terms
 By contrast, consider these figures for less
prosperous countries: Russia: $9,800, Mexico:
$9,600; Peru, $5,600; Philippines: $5,000; India,
$3,100; Haiti: $1,500; Ethiopia: $800
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Why is East Asia Rich?
 On an absolute basis, South Korea was the 14th
richest country in the world in 2005, while Taiwan
was 16th
 See http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)
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Why is East Asia Rich?
 The graph below includes other East Asian countries, but
gives a good general indication of how fast East Asia has
grown compared to the rest of the world
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Why is East Asia Rich?
 But the wealth of Taiwan and Korea is not just
based on per capita income: both countries have
achieved remarkable success in “catching up” with
more developed countries with regard to
technology and industrial capacity
 Many Korean and Taiwanese firms, for example, are
among the leaders in the computer sector, cell phones,
flat panel displays, semiconductor manufacturing, and
so on.
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Why is East Asia Rich?
 South Korea, in fact, is the only developing
country to ever successfully break into the
major western automobile markets
 Taiwan is also competitive in many of these
same fields, but not as a “branded” product
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Why is East Asia Rich?


Example: Hyundai, along with Kia (of which it owns 47%), is
the world’s seventh largest automotive company, but it has
been growing fast and has ambitious plans for the future. In
fiscal 2004 (year-end December 31st) worldwide sales were
up 16.2% and topped 2 million vehicles for the first time
Overseas sales, consisting of exports and, increasingly, output
from foreign plants, jumped some 30% in 2004. At over
1.7m, foreign sales now approach 75% of the company’s total
sales. Production at overseas plants rocketed 85% from 2003,
to some 450,000 units.
Picture: Hyundai Motor
Manufacturing Alabama, LLC
(HMMA), Hyundai's first
assembly and manufacturing
plant in the United States.
The new generation of Sonata's
are being built in Montgomery,
Alabama in this $1.1
billion automotive plant, one of
the most advanced assembly
plants in North America
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Why is East Asia Rich?
Korean companies are
globally competitive in many
cutting-edge, high-tech fields
such as plasma HDTVs (LG
and Samsung), semiconductors (Samsung), cell
phones (Samsung and LG),
MP3 players (Samsung), and
automobiles (Hyundai and
Kia).
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Why is East Asia Rich?
 In Japan, per capita income increased from only
$200 in the early 1950s to almost $2,000 by 1971,
which made Japan the fifth richest country in the
world at the time
 By1998, Japan's per capita income had increased to $42,081 (nonPPP), placing it well in front of all G-8 economies
 In PPP terms, Japan had a per capita GDP of $30,615 compared to
$41,299 (in 2005) in the United States; Japan’s relative position
internationally was only 16th, but all other countries in front of
Japan, except for the U.S., had a population of more than 100
million fewer people (most of the richest countries have
populations of less than 10 million people)
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Why is East Asia Rich?
 Japan has the world’s third largest economy,
with a total GDP of almost $4 trillion
 Moreover, Japan is the technological leader
in many vitally important industrial and
technological fields
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Why is East Asia Rich?
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Why is East Asia Rich?
 All these facts and figures raise important
questions:
 How did Japan, South Korea and Taiwan
achieve their amazing development?
 What is their secret to success?
 Why have they been able to do what so many
other countries have been unable to do?
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Why is East Asia Rich?
 Background Video: The People’s
Century: East Asia Rising
 As you watch, consider the following
questions:
 Can you identify an implicit argument about the
reasons for East Asia’ economic success?
 Or can you identify certain important factors?
 How might you classify the implied argument from
a theoretical perspective (i.e., cultural, rational
choice, or structural)?
 Also, as you watch, jot down what you consider to
be particularly interesting or important points; think
about any questions you may have
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Figure 5.3 A Summary of Basic Facts about Japan, South Korea, and Taiwan
Japan
South Korea
Taiwan
Basic Statistics (data for 2004 except where indicated)
Area
145,882 sq. mil es
12%
negli gible
127,333,002
9.6
38,023 sq. mil es
17%
limi ted
48,598,175
12.3
13,892 sq. mil es
24%
limi ted
22.749,838
12.7
3.3
7.2
6.5
81.0
99%
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24.9 (1993)
75.6
98%
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31.6 (1993)
77.1
86%
n/a
32.6 (2000)
$855.3 billi on
$17,930
$528.6 billi on
$23,400
0.0%
< 2.0%
n.a.
5.3%
$447.1 billi on
$346.6 billi on
3.4%
$201.3 billi on
$175.6 billi on
5.1%
$143.0 billi on
$119.6 billi on
Constitutional Monarchy,
democracy since 1945
Democ racy (under
military authoritarian
rule fro m 1961 -1987)
Democ racy (under
authoritarian rule from
1949 -1987, and one party
rule, 1987 -1991)
Military Spending (% of
GDP) [2002] d
1.0
2.7
2.7
Significant Security Threats
----
North Korea
China
Major Strategi c Ally
United States
United States
United States
Public Expenditure on
Education as % of GDP
Relig ious Affiliation
3.6 (1999-01)
3.6 (1999-01)
n.a.
Shinto/Buddhist Π 84%
Christian Π 0.7%
Christian - 26-35%
Buddhist Π26%
Confucian Π 1%
Arable Land
Natural Resources
Population
Birth Rate (per 1000)
Infant Mortality (per 1000
live births)
Lif e Expectancy at Birth
Liter acy Rate
HDI Rank (2002) a
Gini Index b
Econo mic Indicato rs (data for 2003)
GDP/PPPc
$3.567 trilli on
GDP Per capita (in PPP $)
$28,620
Pop. living bel ow $1 per
day, 1990-2002
Un employmen t Rate
Exports (f.o.b.)
Imports
Othe r Information
Political System
e
Buddhist, Confu cian,
Taoist Π93%
Christian Π 4.5%
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