• Email
  • Single Page
  • Print

Preparing for the 21st Century: Winners and Losers

1.

Everyone with an interest in international affairs must be aware that broad, global forces for change are bearing down upon humankind in both rich and poor societies alike. New technologies are challenging traditional assumptions about the way we make, trade, and even grow things. Automated workplaces in Japan intimate the end of the “factory system” that first arose in Britain’s Industrial Revolution and spread around the world. Genetically engineered crops, cultivated in biotech laboratories, threaten to replace naturally grown sugar, vanilla, coconut oil, and other staple farm produce, and perhaps undermine field-based agriculture as we know it. An electronically driven, twenty-four-hour-a-day financial trading system has created a global market in, say, yen futures over which nobody really has control. The globalization of industry and services permits multinationals to switch production from one country to another (where it is usually cheaper), benefitting the latter and hurting the former.

In addition to facing these technology-driven forces for change, human society is grappling with the effects of fast-growing demographic imbalances throughout the world. Whereas birthrates in richer societies plunge well below the rates that would replace their populations, poorer countries are experiencing a population explosion that may double or even treble their numbers over the next few decades. As these fast-swelling populations press upon the surrounding forests, grazing lands, and water supplies, they inflict dreadful damage upon local environments and may also be contributing to that process of global warming first created by the industrialization of the North a century and a half ago. With overpopulation and resource depletion undermining the social order, and with a global telecommunications revolution bringing television programs like Dallas and Brideshead Revisited to viewers everywhere from Central America to the Balkans, a vast illegal migration is under way as millions of families from the developing world strive to enter Europe and North America.

Although very different in form, these various trends from global warming to twenty-four-hour-a-day trading are transnational in character, crossing borders all over our planet, affecting local communities and distant societies at the same time, and reminding us that the earth, for all its divisions, is a single unit. Every country is challenged by these global forces for change, to a greater or lesser extent, and most are beginning to sense the need to prepare themselves for the coming twenty-first century. Whether any society is at present “well prepared” for the future is an open question;1 but what is clear is that the regions of the globe most affected by the twin impacts of technology and demography lie in the developing world. Whether they succeed in harnessing the new technologies in an environmentally prudent fashion, and at the same time go through a demographic transition, will probably affect the prospects of global peace in the next century more than any other factor. What, then, are their chances?

Before that question can be answered, the sharp contrasts among the developing countries in the world’s different regions need to be noted here.<a name=”>Before that question can be answered, the sharp contrasts among the developing countries in the world’s different regions need to be noted here.2 Perhaps nothing better illustrates those differences than the fact that, in the 1960s, South Korea had a per capita GNP exactly the same as Ghana’s (US $230), whereas today it is ten to twelve times more prosperous.3 Both possessed a predominantly agrarian economy and had endured a half-century or more of colonial rule. Upon independence, each faced innumerable handicaps in their effort to “catch up” with the West, and although Korea possessed a greater historical and cultural coherence, its chances may have seemed less promising, since it had few natural resources (apart from tungsten) and suffered heavily during the 1950–1953 fighting.

Decades later, however, West African states remain among the most poverty-stricken countries in the world—the per capita gross national products of Niger, Sierra Leone, and Chad today, for example, are less than $5004—while Korea is entering the ranks of the high-income economies. Already the world’s thirteenth largest trading nation, Korea is planning to become one of the richest countries of all in the twenty-first century,5 whereas the nations of West Africa face a future, at least in the near term, of chronic poverty, malnutrition, poor health, and underdevelopment. Finally, while Korea’s rising prosperity is attended by a decrease in population growth, most African countries still face a demographic explosion that erodes any gains in national output.

This divergence is not new, for there have always been richer and poorer societies; the prosperity gap in the seventeenth century—between, say, Amsterdam and the west coast of Ireland, or between such bustling Indian ports as Surat and Calcutta6 and the inhabitants of New Guinean hill villages—must have been marked, although it probably did not equal the gulf between rich and poor nations today. The difference is that the twentieth-century global communications revolution has made such disparities widely known. This can breed resentments by poorer peoples against prosperous societies, but it can also provide a desire to emulate (as Korea emulated Japan). The key issue here is: What does it take to turn a “have not” into a “have” nation? Does it simply require imitating economic techniques, or does it involve such intangibles as culture, social structure, and attitudes toward foreign practices?

This discrepancy in performance between East Asia and sub-Saharan Africa clearly makes the term “>This discrepancy in performance between East Asia and sub-Saharan Africa clearly makes the term “third world” misleading. However useful the expression might have been in the 1950s, when poor, nonaligned, and recently decolonized states were attempting to remain independent of the two superpower blocs,7 the rise of super-rich oil-producing countries a decade later already made the term questionable. Now that prosperous East Asian societies—Korea, Taiwan, and Singapore—possess higher per capita GNPs than Russia, Eastern Europe, and even West European states like Portugal, the word seems less suitable than ever. With Taiwanese or Korean corporations establishing assembly plants in the Philippines, or creating distribution networks within the European Community, we need to recognize the differences that exist among non-Western economies. Some scholars now categorize five separate types of “developing” countries in assessing the varied potential of societies in Asia, Africa, and Latin America.8

Relative national growth in the 1980s confirms these differences. Whereas East Asian economies grew on average at an impressive annual rate of 7.4 percent, those in Africa and Latin America gained only 1.8 and 1.7 percent respectively9—and since their populations grew faster, the net result was that they slipped backward, absolutely and relatively. Differences of economic structure also grew in this decade, with African and other primary commodity-producing countries eager for higher raw-material prices, whereas the export-oriented manufacturing nations of East Asia sought to keep commodity prices low. The most dramatic difference occurred in the shares of world trade in manufactures, a key indicator of economic competitiveness:

SHARES OF WORLD TRADE IN MANUFACTURES 10

Thus, while some scholars still refer to a dual world economy11 of rich and poor countries, what is emerging is increasing differentiation. Why is this so?

The developing countries most successfully catching up with the West are the trading states of the Pacific and East Asia. Except for Communist regimes there, the Pacific rim countries (including the western provinces of Canada and the United States, and in part Australia) have enjoyed a lengthy boom in manufacturing, trade, and investment; but the center of that boom is on the <i>Asian</i> side of the Pacific, chiefly fuelled by Japan’s own spectacular growth and the stimulus given to neighboring economies and trans-Pacific trade. According to one source:</p> <blockquote>In 1962 the Western Pacific (notably East Asia) accounted for around 9 percent of world GNP, North America for 30 percent, and Western Europe for 31 percent. Twenty years later, the Western Pacific share had climbed to more than 15 percent, while North America’s had fallen to 28 percent and Europe’s to 27 percent. By the year 2000 it is likely that the Western Pacific will account for around one-quarter of world GNP, with the whole Pacific region increasing its share from just over 43 percent to around half of world GNP.<a name=”>The developing countries most successfully catching up with the West are the trading states of the Pacific and East Asia. Except for Communist regimes there, the Pacific rim countries (including the western provinces of Canada and the United States, and in part Australia) have enjoyed a lengthy boom in manufacturing, trade, and investment; but the center of that boom is on the Asian side of the Pacific, chiefly fuelled by Japan’s own spectacular growth and the stimulus given to neighboring economies and trans-Pacific trade. According to one source:

In 1962 the Western Pacific (notably East Asia) accounted for around 9 percent of world GNP, North America for 30 percent, and Western Europe for 31 percent. Twenty years later, the Western Pacific share had climbed to more than 15 percent, while North America’s had fallen to 28 percent and Europe’s to 27 percent. By the year 2000 it is likely that the Western Pacific will account for around one-quarter of world GNP, with the whole Pacific region increasing its share from just over 43 percent to around half of world GNP.12

East Asia’s present boom is not, of course, uniform, and scholars distinguish between the different stages of economic and technological development in this vast region. Roughly speaking, the divisions would be as follows:

(a) Japan, now the world’s largest or second largest financial center and, increasingly, the most innovative hightech nation in the nonmilitary field;

(b) the four East Asian “tigers” or “dragons,” the Newly Industrialized Economies (NIEs) of Singapore, Hong Kong, Taiwan, and South Korea, of which the latter two possess bigger populations and territories than the two port-city states, but all of which have enjoyed export-led growth in recent decades;

(c) the larger Southeast Asian states of Thailand, Malaysia, and Indonesia which, stimulated by foreign (chiefly Japanese) investment, are becoming involved in manufacturing, assembly, and export—it is doubtful whether the Philippines should be included in this group;

(d) finally, the stunted and impoverished Communist societies of Vietnam, Cambodia, and North Korea, as well as isolationist Myanmar pursuing its “Burmese Way to Socialism.”

Because of this staggered level of development, economists in East Asia invoke the image of the “flying geese,” with Japan the lead bird, followed by the East Asian NIEs, the larger South-east Asian states, and so on. What Japan produced in one decade—relatively low-priced toys, kitchen-ware, electrical goods—will be imitated by the next wave of “geese” in the decade following, and by the third wave in the decade after that. However accurate the metaphor individually, the overall picture is clear; these birds are flying, purposefully and onward, to an attractive destination.

Of those states, it is the East Asian NIEs that have provided the clearest example of successful transformation. Although distant observers may regard them as similar, there are notable differences in size, population,<a name=”>Of those states, it is the East Asian NIEs that have provided the clearest example of successful transformation. Although distant observers may regard them as similar, there are notable differences in size, population,13 history, and political system. Even the economic structures are distinct; for example, Korea, which began its expansion at least a decade later than Taiwan (and democratized itself even more slowly), is heavily dependent upon a few enormous industrial conglomerates, or chaebol, of whom the top four alone (Samsung, Hyundai, Lucky-Goldstar, and Daewoo) have sales equal to half Korea’s GNP. By contrast, Taiwan possesses many small companies, specializing in one or two kinds of products. While Taiwanese are concerned that their firms may lose out to foreign giants, Koreans worry that the chaebol will find it increasingly difficult to compete in large-scale industries like petrochemicals and semiconductors and ship-building at the same time.14

  1. 1

    Discussed further in my new book, Preparing For the Twenty-First Century (Random House, 1993).

  2. 2

    For reasons of size and organization, China and India (containing around 37 percent of the world’s population) are not treated here: for coverage, see Chapter 9, “India and China,” of Preparing For the Twenty-First Century.

  3. 3

    World Tables 1991 (Washington, DC: World Bank, 1991), pp. 268–269, 352–353.

  4. 4

    World Tables 1991, pp. 268–269, 352–353.

  5. 5

    See the World Bank publication Trends in Developing Economies, 1990, pp. 299–303, for Korea.

  6. 6

    For descriptions, see F. Braudel, Civilization and Capitalism: Vol. 3, The Perspective of the World (Harper and Row, 1986), pp. 506–511.

  7. 7

    See P. Lyon, “Emergence of the Third World,” in H. Bull and A. Watson, editors, The Expansion of International Society (Oxford University Press, 1983), p. 229 ff.; G. Barraclough, An Introduction to Contemporary History (Penguin, 1967), chapter 6, “The Revolt Against the West.”

  8. 8

    J. Ravenhill, “The North-South Balance of Power,” International Affairs, Vol. 66, No. 4 (1990), pp. 745–746. See also, J. Cruickshank, “The Rise and Fall of the Third World: A Concept Whose Time Has Passed,” World Review, February 1991, pp. 28–29. Ravenhill’s divisions are high-income oil-exporting countries; industrializing economies with strong states and relatively low levels of indebtedness (Taiwan, etc.); industrializing economies with the state apparatus under challenge and/or with debt problems (Argentina, Poland); potential newly industrializing countries (Malaysia, Thailand); primary commodity producers (in sub-Saharan Africa, Central America).

  9. 9

    Ravenhill, “The North-South Balance of Power,” p. 732.

  10. 10

    S. Fardoust and A. Dhareshwan, Long-Term Outlook for the World Economy: Issues and Projections for the 1990s, a World Bank report (February 1990), p. 9, Table 3.

  11. 11

    W. L. M. Adriaansen and J. G. Waardensburg, editors, A Dual World Economy (Groningen: Wolters-Noordhoff, 1989).

  12. 12

    P. Drysdale, “The Pacific Basin and Its Economic Vitality,” in J. W. Morley, editor, The Pacific Basin: New Challenges for the United States (Academy of Political Science with the East Asian Institute and the Center on Japanese Economy and Business, 1986), p. 11.

  13. 13

    While Korea has a population of around 43 million and Taiwan about 20 million, Hong Kong possesses 5.7 million and Singapore only 2.7 million.

  14. 14

    See especially, “Taiwan and Korea: Two Paths to Prosperity,” The Economist, July 14, 1990, pp. 19–21; also “South Korea” (survey), The Economist, August 18, 1990. There is a useful comparative survey in L. A. Veit, “Time of the New Asian Tigers,” Challenge, July–August 1987, pp. 49–55.

  • Email
  • Single Page
  • Print