Introduction
Stigilitz and Yusuf’s book ‘Rethinking the East Asian Miracle’, illuminates the vital facets of the East Asian economies. The book looks at the crisis that gripped the East Asian region during 1997- 1999. The catastrophe underscored the exigency for cross- sectoral reforms just as the strong revitalization of nearly all the region economies convinced, those who did doubt that, by no means, the East Asian miracle had gone through all stages, from worst to recovery.
Weaknesses in the corporate government and financial sector, trade policies and exchange rate, are discussed in the book ‘rethinking the East Asian Miracle’. The authors also informatively analyze the various aspects of the economy of East Asia. The intricate political economy of development in East Asia is looked at by the author as well as, the interaction among governments as a way of reducing the threat of the periodic disaster.
Book content
Joseph Stigultz and Shahid Yusuf edited the book ‘Rethinking of the East Asian miracle’ from the World Bank report on the East Asian miracle. The book is a co- publication of the oxford university press and the World Bank. It was published in July 2001by Oxford university press in New York, ISBN 0-19-521600-8.
The book, ‘Rethinking the East Asian miracle,’ was intended to, have a new look during the 1990s at regional experiences, extend and modify the findings of the World Bank East Asian Miracle, which had been published in 1993. Most countries in the Eat Asian region were operating on a positive note, with most of them registering improved economic growth rates. ‘Rethinking the East Asian miracle’ revisits the rapid economic growth which persisted for five years, and afterwards in 1996, it began to decline.
This slowed down exports and there emerged excessive capacity in many commercial sectors, thereby, registering a decline in earnings. The authors of ‘Rethinking the East Asian miracle,’ Joseph Stigultz and Shahid Yusuf, focus on the serious disaster or crisis that gripped the East Asian region during the year 1997 to 1999.
The book’s contributors offered varied and broad insights to the political economy of transformation, aspects of governance and vital organizations. These in-depth insights helped to offer an understanding to a deep, carefully nuanced and an analytically thorough East Asian Kaleidoscope.
The first chapter of the book is contributed by Shahid Yusuf, and focuses on the East Asian miracle by the time of the millennium. Yusuf reviews the economy of the East Asian region in the 1990s. There was a rapid economic growth from 1990 to 1995 which began to decline in 1996.
Questions and doubts began emerging about the capability of the East Asian tiger economies and, they got worse in the 1997. There were signs of stress in Thailand’s financial sectors and real estates, Korea’s several chaebol began failing, and there was constant stagnation in the Japanese economy.
A full- blown crisis was witnessed by the end of the year originating from Thailand, on to Malaysia, Korea and Indonesia. China, Singapore and Philippines were not largely affected, though there was slow growth in China and Taiwan. The book illuminates the crisis in East Asia, and how the impacts became apparent in other countries like the Russian federation and Brazil.
‘Rethinking the East Asian miracle’ looked at a panorama which was made unpopular by the impact of an unforeseen calamity and crisis, which had a chief impact on most economies. The chapters in the book look at vital factors, which determined the performance in the East Asia.
More light is shed on the experiences of the 1990s, and the changes and reaffirmation made on the mainstream overviews of the period, as expressed in the East Asian miracle. The book reviews the factors that contributed immensely to the East Asian miracle. The successive chapters in the book focus on the East Asian growth of the economy, followed by the crisis as well as on economic recovery. The changes in technology and its growth in East Asia are highlighted in the book, focusing mainly on the macro in relation to the micro perspectives.
China’s vast contribution to the East Asian miracle, through rural industrialization, is appreciated in the book although, it is pointed as having a redundant growth during the five years of the crisis. The crisis receded by millennium and the East Asian economy began recuperating in 2000. In 1998, the United States provided the momentum for the world’s economic growth.
The crisis started receding in1999, and the East Asia standard of dollar resurrected and began to stabilize. The book looks at the pegging of the exchange rate high frequency, and the interpretation that went with it. There was continuous control in the cooperate governance. The governments’ control in the transitional institutions and the firm relationship of countries contributed significantly to the recuperation of East Asia.
The book, ‘Rethinking the East Asian miracle’ has vast information from eminent scholars, who shed light on the industrial policies that were put in place by various states and how these policies were implemented. This volume supplements the missing perspective from the East Asian miracle that was published in 1993.
The Chinese experience is explained in this book, and it is put in light with other countries’ economies in the region. Import liberalization to economic growth is discussed in the book as having been brought about by export led policies. The book, ‘Rethinking the East Asian miracle,’ clarifies issues concerning the decision about the exchange rate policies adopted n East Asia.
The roles played by the individual governments in the Southeastern Asia are looked at, and the effect the government policy had on the economy. Joseph Stiglitz, ends the book with his contributions about the period the miracle happened in the East Asia, followed by the crisis, and then to recovery. Stiglitz reviews the periods, and, give the reader an insight of the whole process from the miracle, to crisis and finally to recovery of the East Asian economy.
Critical Analysis
The critical analysis involves interpreting and evaluating the author’s views presented in the book. It also presents work organization, work style, effectiveness, understandability, importance, usefulness and author’s focus on his objectives in solving the problems of East Asia. The review also aims at assessing the accuracy of the information the author presents in his book. It weighs the evidence the author presents and, with how much authority.
The authors start this book by presenting the key components of East Asian economies. These components are financial sector, corporate governance, exchange rates, trade policies and regulatory capability. The authors present their views with much accuracy and thoroughness using the current situation in East Asia countries.
The analysis of each and every component of the East Asian economies, identify the causes of the problems affecting the economies, as compared to the success achieved by western countries or rather, European countries. The authors present their work from different scholars such as, Ito, Urata, McKinnon, Okasaki, and Jomo.
This shows that the authors have extensively researched on the problems affecting the East Asian countries. They also present information which they have gathered from different East Asian countries. This shows accuracy on the authors’ work because, unlike other authors of different books, they do not concentrate on a single country for their research.
The authors present the true picture of the reasons why the East Asian countries could not compete with their western and European counterparts. This presents their audience with pertinent information to be referred to for their research, and, endeavors to solve the problems of East Asia or any part of the world with similar problems.
The authors’ main arguments are true because, they present them with a lot of evidence through extensive research, and analysis with regards to East Asian countries. The authors’ analyze each problem identifying its causes and present the solutions to the problem in their book. This shows how much authority the authors have in solving the problems affecting East Asian countries.
Though the authors’ work was thorough, the evidence they present on financial crisis in East Asian countries is not enough. This will not help the stakeholders to solve such a problem currently, and in the future, if it will ever occur. They have overlooked crucial issues such as the global economic melt down.
This could affect all the countries leading to collapse of the world leading economies including those of East Asia. They also criticize the international monetary arrangement as used by the west countries; these arrangements include use of centralized and internationally recognized currencies such as dollars, Euros among others. These unified currencies make it easy to do business internationally, and increase revenue for the governments’ in the form of taxes from foreign transactions.
The authors’ emphasis on East Asia is not logical because, whatever happens in other parts of the globe, will affect the Asian policies. They also criticize and discourage use of foreign direct investment especially from Europe and western countries. This notion is not logical because no country has been successful in this world without foreign investment.
The information they present on corporate governance is not applicable in solving problems, and have successful corporate in East Asian countries. The authors’ explanation of Japan’s industrial sector and solution to extend it, are logical and applicable. The explanations can also be used even in European and African countries.
The authors’ views on corruption have identified the causes, but have not presented substantial information to solve the problem. They have not provided any new research on the matter of corruption, but have instead proposed the same solutions just as other authors.
Compared to other books, the authors have authority in solving the problems of East Asia. In regards to ‘what went wrong’ by Bernard Lewis the authors have overlooked the issue of religion. This is one of the main contributing factors to the problems of East Asia. Lewis’s approach is discriminative, and his views are that, the problems of East Asia were caused by the influence of European and other western countries.
Lewis adds the issue of military power as a solution to success, an issue which is not considered by the authors. The authors handle economic issues only, leaving out cultural and religion values. Lewis opposes civilization, because, he sees it as one of the issue affecting East Asia. The politics of globalization by Maurice Mullard, presents the principal problems, as lack of contact to the outside world, and how the East Asia countries have secluded themselves from European countries.
The authors of ‘Rethinking the East Asian miracle,’ only provide solutions to the East Asian problems, but Maurice provides the solution to the world, as a whole. Rethinking East Asia is a book which has identified problems affecting East Asia and provides solutions to solve them. The book ‘Rethinking the East Asian Miracle,’ complements other books in solving the problems encountered by East Asian countries.
Conclusion
‘Rethinking the East Asian’ is an excellent book which has presented the problems of East Asia as well as the various ways of solving them. The authors have analysed each and every problem identifying their root causes. This is helpful to the reader and any other person who will be interested in understanding and solving the problems of East Asia.
The authors offer information of key problems such as those related to the financial sector, corporate governance, trade policies, exchange rates and regulatory capabilities. The arguments presented are logical though, they have a few shortcomings which can be complemented by others.
This will be of use in arriving at the most successful ways of solving East Asian problems. The authors have taken advantage of professionals that are well versed with the issues they are handling and that could of help in giving solutions. This provides them with authority in such issues, a fact which makes their book reliable in solving East Asian problems.