16. Explain the nature of the major external factors in the East Asian economic miracle.
US SUPPORT AND PROTECTION :
= after WWII, US development aid
= opening up US markets to strengthen allied economies
= local US demand (e.g Vietnam War)
= military protection
= state-based import-substituting (protectionist) industrialization
= in 1970s, US forces East Asian states to open up
OPEN ECONOMIES
= 1970s: export-oriented turn, embracing globalisation, democratization
* US capital flows into the region which enters the new global value chains
= Japanese regional investments, moving manufacturing to other countries
* the flying geese model
*Japan as a new economic superpower?
= 1985 Plaza Accord : strengthening the yen, beginning of Japanese problems
17. Describe the (East) Asian Development Model
= Strong directing role of the state over economic development
* national consensus on the overall framework
* supporting research and development
* protectionism: export assistance and protected industries (monopolistic domestic markets-
= iron triangle of elites
*political elite committe to economic modernization
* strong state capacity (bureaucracy)
* managers of big conglomerates (keiretsu, chaebol)
- cohesion - Japan Inc
= close bank-firm relations, high insider shares, lower reliance on investment financing and stock markets
strong education
18. What does the “flying geese” model of development stand for?
The flying geese paradigm (FGP) is a view of Japanese scholars upon the technological development in Southeast Asia viewing Japan as a leading power. It was developed in the 1930s, but gained wider popularity in the 1960s.
Akamatsu’s third flying geese paradigm (FGP) is a model for international division of labor in East Asia based on dynamic comparative advantage. The paradigm postulated that Asian nations will catch up with the West as a part of a regional hierarchy where the production of commoditized goods would continuously move from the more advanced countries to the less advanced ones.
The lead goose in this pattern is Japan itself, the second-tier of nations consisted of the newly industrializing economies (South Korea, Taiwan, Singapore and Hong Kong).
After these two groups come the main ASEAN countries: Indonesia, Thailand and Malaysia. Finally the least developed major nations in the region: China, Vietnam, Philippines etc. make up the rear guard in the formation
19. What are the major challenges in the way of the 21st century becoming an “Asian century”?
ECONOMIC SLOWDOWN
= declining growth rates in recent years
= japan's sucess story ending in the 1990S
= abenomics : shinzo abe's new economic policy since 2013 : fiscal expansion, monetary easing, structural reform (competition, labour markets) results are weak so far.
DEMOGRAPHIC DECLINE
= rapidly aging population :
* japan : 22% of people over 65, 35% by 2100
* world average now is 10%
* shrinking populations : Japan 127 to 87 million by 20150
south Korea 50 to 20 million by 2100
= losing working age population (robotics to the rescue?)
= problems of social security systems and care for the elderly
= lower demand for products
= lack of openness to migration (2% immigrants in Japan)
REBALANCING DEMAND
The problem
= dependence on demand in global value chains
* therefore depends on demand from western developed countries
= slow-down of western demand
= export-oriented growth on this model is no longer viable
Potential solution
= shifting to internal demand: domestic consumption as new source of growth
= shifting to intra-asian demand: growing asian middle class but lack of infrastructural links for integration
* asian development bank estimate: between 2010 and 2020 asean countries will require 60billion dollars a year
* AIIB Asian Infrastructure Investment Bank , OBOR One Belt One Road
= shifting to new markets: latin-america, africa
GEOPOLITICAL TENSIONS
Feigenbaum and Manning 2012; two asias
= economic asia: win-win logic of cooperation and shared growth-centered on china
= security asia: zero-sum logic competitive system centered on the us
= INCREASING SECURITY tensions over territorial issues, historical and indentity conflicts:
* island disputes
* militarization of japan
* disputes over "comfort women, wwii crimes
* taiwan's status
* north korea and nuclear posturing
* us-china security competition as an overall framework
20. Demographic changes can lead to economic problems. Explain and compare how this affects East Asia (including China) on the one hand and India and Sub-Saharan Africa on the other.
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