Schuman accounts for success and failures of the Asian model of development by using two biographies, exploring anomalies in Asia that vary from this classic Asian model of development, and showing exceptional cases of the connection between strength of regulation and economic expansion.
First, Schuman’s biographies indicate two main traits of the Asian model of development. There is the truth among these that Asian nations tend to stress investment in export exhaustive industries, as well as take part heavily in global trade.
The second feature is the stress on investment as a main pathway to economic development. Regrettably, having both of these traits can be challenging, since an overreliance on exports not uniformly balanced with domestic use can result to a fizz economy.
Schuman explains these questions by the example of two biographies of different people, such as Li Ka-shing who is a Hong Kong market responsive supporter, and Shigeru Sahashi, a Japanese critical revisionist. He chooses Shigeru Sahashi, a public official, because he has embodied the intrusiveness of Japan’s situation in directing the economy (Schuman 7).
He executes a series of policies to change the comparative advantage of Japan from manual industries like textiles and toys into profound industries, which necessitate great technical know-how and big investments.
Through low-interest and easy access funding, duty-free importation of essential machinery, concoction of alien technology, and trade hurdles that protected preferred industries from alien rivalry, the Central Bank and the Ministry of International Trade and Industry (MITI) collaborated to accelerate and increase investment (Schuman 15). In this manner, Japan primarily formed the MITI-driven Model.
Expansion led primarily by the regime is quite symbolic for the characteristic model of Asian development. Conversely, Schuman chooses Li Ka-shing, a hugely significant and wealthy businessman, because he typifies other characteristic features of the Asian development model such as dynamic involvement in global trade (Schuman 20).
Li begins his business by making plastic toys for a home trading company and accruing immense quantities of capital by accepting substantial orders from overseas. Therefore, Asian domestic trade is expanding swiftly while the regime is stressing on exports and global trade, which may result in a largely diminished state consumption.
Secondly, Schuman explores a number of irregularities that vary from this economic model of development in Asia on top of changes that have been associated with this model. Among these irregularities, India’s attention is concentrated on the service segment.
Even when most of the other Asian states centered on manufacturing taking benefit of the inexpensive labor force, India focused on a more human capital rigorous growth mechanism. This is exciting since while the service industry stresses a high intensity of expertise and skill, developing nations have a less developed educational structure which cannot compete with developed states in the quality of personnel.
Hence, most emerging nations grow via production industries rather than service business. Even as, the subsidiary return to service is declining as the personnel enlarge, the reverse is happening for human capital since the subsidiary earnings are raising as the magnitude of human capital augments.
This feature might demonstrate the latent development power for India as it seems to be growingly predominant in international service industries.
Higher education conscription rate is a key pointer of enlightening attainments, and India has had the lowest situation amid chief emerging nations. Hence, it is even more probing how India has managed to develop through the services industry, though Schuman does not scrutinize the motives for this.
Schuman also examines a key shift that has been happening to the Asian model of economic development. In earlier times, Asian regimes were used to focusing their attention on the flows of the interior Foreign Direct Investment (FDI). Nevertheless, the procurement of IBM’s PC unit China demonstrates that a growing amount of Asian nations might soon commence ventures in industrialized states.
Therefore, there has been a change towards external FDI flow, which can take benefit of superior technologies, infrastructure and personnel in developed nations, thus benefiting economic development. Hence, Schuman shows that while there are definite characteristics that are common all over the Asian economies, they are also shifting over time with chief differences amid the states.
Third, Schuman provides exceptional cases of the connection between strength of regulation and economic expansion. A certain title of the chapter is used by the author to feature the relationship that occur between economic development and its regulation, “Why Koreans want to clone a dictator?” (Schuman 37).
Park fashioned the Economic Planning Board, which manages the whole development procedure. Furthermore, he overtly possessed Korea’s financial systems and took express power over their loan practices. Even as, the Korean economy did grow under his government, Schuman does not attempt to clarify whether this development happened despite the rule or because of it.
Schuman not only reveals the accomplishments of the economic Asian model of development, but also points out the possible problems it features. Besides, he sheds reservations on the laissez-faire ideology widespread in European nations and the United States economic growth model and stresses the positive impact of regime in Asia’s economic growth (Schuman 46).
Even though economists are habitually criticizing Asian regimes as intervening and overstretching too much in the free market, the victory of Asia’s economic development cannot be ignored. Schuman’s account of Asian economic growth leaves the following query that deals with in what circumstances a strong government-business affiliation positively pressures the economy.
It would seem that both the global situation in the 20th century and Asian culture and history impact this result even if Schuman does not openly answer the query. Even without the employment of intricate statistical models, the use of abstract concepts, or critical investigations, he vibrantly recalls the account of the hasty growth in Asian economies by describing the stories of a number of eminent persons (Schuman 43).
Schuman, accordingly, offers a sensitive appreciation of the Asian model of economic growth in his work. Through the use of striking, individual stories, Schuman adds to the existing theories on Asian economic development.
In conclusion, Schuman uses two biographies that indicate the main traits of the Asian model of development. He chooses Shigeru Sahashi, a public official, since he has embodied the intrusiveness of Japan’s situation in directing the economy.
Shigeru executed a series of policies to change the comparative advantage of Japan from manual industries like textiles and toys into profound industries, which necessitate greater technical know-how and bigger investments.
Conversely, Schuman chooses Li Ka-shing, a hugely significant and wealthy business man, because he typifies the other characteristic of the Asian development model: dynamic involvement in global trade. Li begins his business by making plastic toys for a home trading company and accruing immense quantities of capital by accepting substantial orders from overseas.
Li’s enterprise noticeably broadens by global business when a change in international production, from urbanized to emerging nations, occurred more than forty years ago. Thus, Schuman demonstrates that Asian, domestic trade is expanding swiftly while the regime is stressing exports and global trade, which can result to a largely diminished state consumption.
Besides, Schuman explores a number of irregularities that vary from this economic model of development in Asia, on top of changes that associate with this model. Among these irregularities is India’s attention on the service segment. He demonstrates that nowadays, India is a developing state that is of great importance for the global services and outsourcing businesses and industries gaining of inexpensive human capital.
Third, Schuman provides exceptional cases of the connection between strength of regulation and economic expansion. Schuman not only reveals the accomplishments of the economic Asian model of development, but as well points out the possible problems it features.
Besides, he sheds reservations on the laissez-faire ideology widespread in European nations and the United States economic growth model and stresses the positive impact of regime in Asia’s economic growth.
Even without the employment of intricate statistical models, the use of abstract concepts, or critical investigations, Schuman vibrantly recalls the account of the hasty growth in Asian economies by describing the stories of a number of eminent persons.
He shows that while there are definite characteristics that are common all over the Asian economies, they are also shifting over time with chief differences amid the states. Through the use of striking, individual stories, Schuman adds to the existing theories on Asian economic developmen
Works Cited
Schuman, Michael. The Miracle – The Epic Story of Asia’s Quest for Wealth. London: Harper Collins Publishers, 2009. Print.