Japan and Korea are two of the most apparent success stories in world economic history. Both countries depicted considerable development during periods of rapid economic growth. The governments in both countries determined the pace and direction of industrial development. For instance, the governments approached industrial policy and were the most important factor during this period in the transformation and growth of the economy. By the early 1960s, the focus of international issues took a drastic turn in Asia because of the economic competition that had emerged among countries during this period. Both Korea and Japan had to improvise strategic approaches that could ensure the states grew their economies to compete favorably among others in Asia. Therefore, enacting government policies such as trade and industries policies would ensure that the economies of the states grew rapidly. In addition, the pace and economic growth relied on the political stability of the region, as well as international relations with other nations.
The rapid economic growth in both Japan and Korea during the 1960s was significantly determined by the governments. For instance, the Korean and Japanese governments approached an essential move during the period of rapid development. This included the industrial policies that guarded technology use and intervention. Exploitation of the available resources and minerals such as iron led to the development of different innovative technologies. In addition, the governments` core objective was rapid industrial development, and there were all centered on technology and innovation. Therefore, the governments were ready to invest more in the industrial sector and ensure maximum production. This allowed the industrial boom to occur in both Korea and Japan during the 1960s (Lockwood 77).
On the other hand, the governments of both Japan and Korea initiated the rapid economic growth during the 1960s through industrial policies. For instance, the Japanese government enacted a strong proto-industrial base where investment in agriculture was dominant. This ensured that there were enough food products to sustain substantial production in rural and urban areas of the nation prior industrialization. Therefore, it meant those food constraints that could affect the rate of industrial production had been curbed. In Korea, the government enacted policies such as subsidized farm inputs that allowed farmers to access farm inputs such as fertilizer and seedlings. Through such approaches, the governments ensured that food was available for its peoples who would work in different industries.
World War II, Japan approached economic reforms that became the pillars of economic growth. For instance, the government subsidized the cost of imports, and this ensured that investors had a significant market where taking a business risk was imminent. Development of companies was greatly fostered with companies such as Zaibatsu which included Mitsubishi and Sumitomo breaking into small independent companies. Therefore, government interventions to provide trade policies that allowed the East Asian market to attract many investors and consumers was a considerable approach by the government. In addition, other economic reforms by the Japanese government included the passage of the Deconcentration Law, including the establishment of the Fair-Trade Commission (Castley 107). This law was meant to decentralize or delegate power from the central government to local government. The government made this move to ensure that resources were able to reach people in the local areas so that growth of the economy would begin from there. Once the local people were empowered by the national resources, the will and capacity to venture into national economic development would undoubtedly emerge.
Korea`s "rags-to-riches" economic improvement has always been cited as "man-made" wonder. This is all rooted in the rapid economic growth that occurred in the 1960s. Political intervention were the key drivers of rapid economic growth in Korea because political leaders such as Park were on the forefront in ensuring bureaucratic measures in the economy were eradicated. In addition, enactment of policies that would ensure industrialization objectives were meant was another key prospect. The Park government enacted various policies such as the Regulation of Imports Policy that allowed the industrial sector to expand vastly. In addition, "a sizable portion of the contribution of the export promotion policies of the 1960s to GDP can be attributed to prior import substitution" (Pilat 57).
I perceive that the governments of both Korea and Japan were the core facilitators of the rapid economic growth in these states. For instance, the government of Korea through the Bank of Korea enacted important financial regulations in 1962 and begun to offer exporters in the country preferential financial advantages that grew their businesses as well as the GDP of Korea. In the same year, the government approach export finance regulations with the aim of purchasing raw materials, production, and shipment (Kuznets 35). On the other hand, the Japanese government during the 1960s considered technological advances. In addition, the government raised the value of Japanese yen because of the move by the United States to impose economic protection policy that greatly oppressed Japanese production.
However, it is imperative to note that the rapid economic growth in Japan and Korea was not all initiated by government approaches. Evidently, the broad geopolitical security concerns and resource constraints describe the emergence of rapid development in these states. Essentially, limited resources in both Korea and Japan forced these nations to venture into technological prospects and ideologies that would facilitate their growth. Both countries are considered to have endured "late development" because nations such as the United States were far ahead regarding development by 1960s. The geographic position of the nations, considering access to water transport and proximity to resources of other countries played a critical role in the rapid development, this ensured that construction of infrastructures such as road and rail would be attained for easy transport of finished industrial products.
In addition, it is important to note that the government`s intervention did not prevail in all aspects of Korea`s rapid growth development. For instance, the United States of America` pressure on the Vietnam War was outstanding. This is because the U.S had signaled Korea that it was unwilling to continue providing aid that it had previously handed. Therefore, this meant that Korea had to seek a new alternative, that is a new foreign currency reserve. Equally, American advisors had encouraged Korea to expand its export capacity since the US had intensively involved its military in Vietnam. This implied that a more industrialized Korea would be a more efficient supply chain (Rodrik 17).
During the periods of rapid economic growth in Japan and Korea, it was not the government that determined the pace and direction of industrial development because individual economic planners were behind the ideologies and advised the government accordingly. Leaders of Korean companies approached the new export-led industrialization model even though the state had control over finance. Meaningful economic growth was brought about by the import-substitution policy that undermined bureaucratic individuals within the business sector. This meant that businesses could grow immensely, the especially industrial sector where a majority of the investment that followed the Vietnam War had ventured. Equally, the considerable approach was given to other export sectors such as fishing, farming, and mining that fueled the rapid economic growth. The Japanese capital found a considerable location for their businesses in Korea. This saw many Japanese businesses relocate to Korea, especially the light manufacturing companies such as textiles. Labor intensive and more capital-intensive companies such as heavy industries were the focus of Japan considering the U.S had imposed measures against its exports.
To conclusion, I would like to point out that there are external aspects and governmental strategies that led to the rapid economic growth in Korea and Japan during the 1960s. Some of the external factors include the broad geopolitical security concerns and resource constraints describe the emergence of rapid development in these states. However, I feel that basically during the periods of rapid economic growth in Japan and Korea, it was the governments that determined the pace and direction of industrial development. For example, economic reforms by the Japanese government incorporated the passageway of the De-concentration Law, including the founding of the Fair-Trade Commission. This law was meant to decentralize or delegate power from the central government to local government. In addition, the Japanese government enacted a strong proto-industrial base where investment in agriculture was dominant. Therefore, during the periods of rapid economic growth in Japan and Korea, it was the governments that determined the pace and direction of industrial development.
Castley, Robert. Korea's economic miracle: The crucial role of Japan. Springer, 2016.
Kuznets, Paul W. "An East Asian Model of Economic Development: Japan, Taiwan, and South Korea." Economic development and cultural change 36.S3 (1988): S11-S43.
Lockwood, William Wirt. Economic Development of Japan. Princeton University Press, 2015.
Pilat, Dirk. The economics of rapid growth: The experience of Japan and Korea. Edward Elgar Publishing, 1994.
Rodrik, Dani. "The past, present, and future of economic growth." Challenge 57.3 (2014): 5-39.
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