Similarities Underlying East Asia's High Growth and Contrasts with Other Regions

Harry Oshima
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Harry Oshima: School of Economics, University of the Philippines Diliman

No 198614, UP School of Economics Discussion Papers from University of the Philippines School of Economics

Abstract: This paper continues on with the theme of my previous papers emphasizing the importance of human resource development in East Asia's postwar growth. It is argued that the NICs were better prepared to start rapid growth early in the postwar era because of prewar experience. Japan, in order to increase rice yields in the colonies so that the surplus could be imported for Japan's industrialization and militarization, had to modernize agriculture in Taiwan and Korea with better rice seeds, fertilizer, irrigation, extension, roads, and so on. To wage war in China, Japan established modern industries in Korea to produce for its army fighting in China. And in the 1930s with the beginning of invasion of China, Japan's economy began to experience labor shortages, and various labor-intensive industries were transferred to Taiwan. Since for modern agriculture and industry, an educated labor force was necessary, primary schools were extensively established. In the city-states, to develop Hong Kong and Singapore as efficient centers for entrepot trading and finance, the British had to develop modern physical and institutional infrastructure including education as the modern service industries needed educated labor force even more than agriculture and industry. In contrast, Western colonial powers were interested in plantations and not in rice production and did very little to improve peasant production. In exchange for plantation products, the West sold manufactured goods to the colonies, and there was no need to industrialize the colonies. The greater experience with modern agriculture enabled Japanese, Taiwanese, and South Korean peasants to take full advantage of land to improve agricultural production in the 1950s. And when there was the unprecedented expansion in demand for manufactured goods in the West during the 1960s, East Asian manufacturers able to produce to sell to the West.

Date: 1986-12
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Published as UPSE Discussion Paper No. 1986-14, December 1986

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