16 April 1995
For some time there is a very enlightening discussions on East
Asian model(s) of development. The participants search for the
root-causes of the economic progress in the region. I don't have answers
to these questions, but I have some questions to clarify the issues.
If we look at some countries in the region vis-a-vis the US, they
all have significant improvement in their GDP per capita. China and
Taiwan are excluded because of their membership status in UN and
therefore lack of consistent data.
GDP PER CAPITA ($)
1970 1975 1980 1985 1990 1992
United States 4,970 7,400 12,000 16,690 21,790 23,240
Japan 1,930 4,490 9,870 11,300 25,430 28,190
Hong Kong 900 2,160 5,210 6,230 11,490 15,360
Singapore 950 2,540 4,550 7,420 11,160 15,730
S. Korea 260 580 1,620 2,150 5,400 6,790
Malaysia 390 820 1,680 2,000 2,320 2,790
Percent of US Per Capita GDP
1970 1975 1980 1985 1990 1992
United States 100 100 100 100 100 100
Japan 38.8 60.7 82.3 67.7 116.7 121.3
Hong Kong 18.1 29.2 43.4 37.3 52.7 66.1
Singapore 19.1 34.3 37.9 44.5 51.2 67.7
S. Korea 5.2 7.8 13.5 12.9 24.8 29.2
Malaysia 7.8 11.1 14 12.0 10.6 12.0
Source: WORLD DEVELOPMENT REPORT, Various Years.
Except Malaysia, all four countries have narrowed the income gap
with the US. Is this what Mark Selden alludes: higher income, higher
consumption, higher standard of living, higher life expectancy, etc.? Do
we measure these characteristics from average figures, or do we also look
at the distribution? Is economic development just per capita GDP growth?
Or should we examine other variables, such as PQI (physical quality life
index and its variations), HDI (human development index), access to
sanitation, water, health care, books & newspapers, radio, TV, etc.?
More or less every participant used the word "development" or
"economic development" as synonymous to "economic growth" which is per
capita GDP growth. Economic development is much broader concept, it has a
socio-economic and political dimension. It is not just a higher standard
of living for the few, but everybody's. Perhaps we should use John
Gurley's "Maoist economic development" concept. Development means every
one's rise to higher level, not only the elite's in the society. Is there
evidence in these variables in China? Those who followed the accounts of
William Hinton in MONTHLY REVIEW cannot agree with the conclusion that
Mark asserted in his first posting. The evidence that Hinton has
presented is increasing income gap among people, communes and regions in
China.
I am not a China (or East-Asia) "expert." I cannot empirically
verify or refute the claims made in the discussions. But those
discussions raise questions in my mind.
1. It seems that there is a confusion between "short-term" and
"long-term" statistical results. Economic development is not only broader
term but also it is a long term sustainable phenomenon. Some countries in
the region sustained economic growth for several decades, but the
evidence in China is not warranted at the moment. We should not rush to
quick judgment as we have done for some countries elsewhere. Brazil was a
case in point. After the junta toppled the Goulard government in the
1960s, Brazil was viewed as a "model" for less developed countries and
viewed as a dynamic NIC. And look at it now.
2. I don't believe we now know what really triggers economic development.
So, let us not put forward grandiose theories before we know more and
understand the nature of economic development, not economic growth. Let
me give an example by re-telling a story an Iranian colleague told me.
When he was returning from a trip to Iran, at Teheran airport he was
harassed and humiliated by a baggage checker and passport controller.
Baggage checker told him that he had excess baggage and they cannot be
checked in. He tried to reason and talk to the person, but no avail. He
sweated in warm and crowded airport. This created another problem. So he
left one baggage with books there to proceed to passport control, where
the officer told him that his passport is damp (of course, it was wet
from sweat, he could have wetted his pants too) and he cannot process it.
The officer told my colleague that he looked "suspicious" and nervous.
And he has to investigate his situation and until that time he has to
wait. He was tormented there by this "small" man. And of course, he
missed the plane. Next day he boarded airplane without any hassle and
came to Istanbul. While he was waiting for his connection at the airport
a woman security officer approached him and asked his identification and
other documents, because she told him that he looked "suspicious". She
checked his passport and wallet and found $2000. She began questioning
from where he got the money. Do you want me to tell you more stories of
"underdevelopment"? The arbitrary power that those individuals have is
the invisible facets of underdevelopment. Their words are the rule of law
over there and you cannot question the arbitrary power they have. You can
multiply these incidences to show how they can cumulatively block
economic development (even though there may be so much external capital
infusion). (Mexico is a case in point. As soon as there is capital
inflow, there is also outflow for equal amount.) There are many, many
such things and stories. You see them by living. The intricacy of these
incidences is obstacle to economic development. How do you eradicate
them? How can you measure these intangibles, which are crucial for the
assessment of economic development? How do we quantify them? Does GDP per
capita growth or a rise in average life expectancy tell us about these
intangible barriers?
3. I have also noticed for lack of class analysis in our discussions of
East Asia. Economic development means a change in economic and political
power. Do we see any evidence of empowered masses in the region? Does the
working class majority control the means of production and distribution
and their use for themselves?
4. I always thought that economic development cannot occur in Third World
capitalist societies. Its occurrence is a negation to socialism. If
economic development can occur in capitalism or if we can create economic
development with capitalist class, then why do we struggle for socialism?
If capitalism manages economic development without impoverishing the
majority, then why do we fight against capitalism? Remember friends! I am
not talking economic growth (per capita GDP growth) from Badlands in
North Dakota. I am talking economic development. Economic development
occurs when there is no impoverishment of the many. Development occurs
when the powerless becomes powerful. Have we forgotten Marx's quote:
"There must me something rotten in the very core of a social system which
increases its wealth without diminishing its misery, and increases in
crime even more rapidly than in numbers." That is what we fight for
socialism: to diminish the misery of the majority as we increase the
total wealth.
P.S. For economic development to occur, the internal conditions conducive
to development must be ready. One of these conditions is that there must
not be very unequal property distribution, particularly land. The
post-war progress that Japan, S. Korea and Taiwan have had in economic
sphere is partly attributable to the limitation imposed on land ownership.
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