POLS 373 Foundations of Comparative Politics

1. POLS 373 Foundations of Comparative Politics Lecture: Why is East Asia Rich? Part 1, Brief Introduction

2. 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

3. 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 …

4. 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

5. 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

6. 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)

7. 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

8. 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.

9. 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

10. 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

11. Why is East Asia Rich? Korean companies are globally competitive in many cutting-edge, high-tech fields such as plasma HDTVs (LG and Samsung),semi-conductors (Samsung), cell phones (Samsung and LG), MP3 players (Samsung), and automobiles (Hyundai and Kia).

12. 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 (non-PPP), 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)

13. 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

14. Why is East Asia Rich?

15. 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?

16. 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