Impact of Political Systems and Trade Embargoes Essay

Asian Tigers

After the Second World War countries in East Asia experienced dramatic economic growth. The countries were described as having experienced a form of the economic miracle and acquired the name the ‘Asian tigers’. In the period between 1965 and 1990, East Asian countries experienced remarkable economic growth with an average of 4.6% growth per annum which was the highest in the world at the time. There was increased equality in national incomes and life expectancy rose from 56 years immediately after the war to 71 years in 1990.

The exports from the region also increased to about 25.6% of total global exports. The statistics were impressive and the reasons causing accelerated growth have been the topic of numerous studies. The East Asian countries joined the group of nations referred to as the ‘newly industrializing countries’ (NICs). The East Asian countries had similar political systems at the time they began to experience economic prosperity. The countries were under authoritarian regimes and it has been theorized that this may have spurred the meteoric growth in the economies of the ‘Asian tigers’ (Ikeo 111)

The countries referred to as ‘Asian tigers’ included Taiwan, Singapore, Hong Kong, South Korea, Indonesia, and Malaysia. The governments of the countries at the time were autocratic or military. An authoritarian system of government was not the only thing that was similar in East Asian countries. The East Asian countries had other similar characteristics that qualified them as NICs, with one of them being the growth in absolute levels of industrial employment and the share of industrial employment in total employment levels.

Another characteristic is that the countries manufacturing industries experienced a rise in the share of global exports. The NICs also managed to reduce the economic gap between them and industrialized countries due to the growth in real per capita gross domestic product. These attributes contributed to the fast-paced growth in the economies of the Asian tigers (Michael, Kelly and Connors 200)

Political systems usually affect the economy, be it directly or indirectly. Liberals hold the view that politics should not interfere with economic markets and should only provide the infrastructural framework. Realists differ and propose that politics and economic markets are interrelated and should not be separated while radicals hold the view that politics is used to influence economies for the benefit of the elitist ruling class in politics.

The authoritarian governments in the Asian countries were involved in the economy and contributed to the unprecedented successes in economic growth. The states managed to increase exports by imposing protectionist laws and even distorted market prices to generate trade and investments. The growth in the economies of the NICs was also attributed to the willingness by the political class to engage in international trade and their effectiveness in implementing economic plans. (Phōtopoulos 19)

The authoritarian political systems in the Asian countries were successful as they managed to combine the West’s capitalism and Confucianism. Confucianism represented the domestic values of the countries, which allowed the authorities to exercise greater control on the direction the economy took. In Western economies, governments had limited authority in determining the direction of their country’s economies.

The authorities in the Asian countries created an environment that promoted equality and also adopted some concepts of capitalism such as allowing free enterprise and engaging in trade with other countries. The traditional value systems adopted by the populations in the countries also contributed to economic growth, they included an inclination to working hard and having minimal labor demands (Michael 4)

It would be simplistic to assume that the political system at the time was the only contributing factor to the economic growth witnessed. The social and cultural systems in Asia were responsible for the strong governments and not the authoritarian regimes. The social and cultural framework in Asian countries is based on Confucianism. Confucian societies provide an environment in which economic growth is possible but other factors such as the political system and the economic system have to be present.

Confucian countries in East Asia have proved to be economically successful even with a change in the system of government. An example is South Korea and Taiwan which adopted democratic political systems and managed to remain economically successful which proved that the authoritarian political system was not entirely responsible for the previous economic success. It then follows that the common factor which is a Confucian society must have played a major role in the economic prosperity of the Asian tigers’ (Ikeo 97).

During the era of prosperity in East Asia, the countries were under authoritarian rule. Even after the system of government changed in these countries, they remained prosperous. It is undeniable that the ‘miracle’ of economic growth was partly due to the political system but it is also clear that the social and cultural framework was mainly responsible for the economic growth witnessed. It then follows that the political system at the time of the creation of the ‘Asian tigers’ cannot be fully credited for the growth in the economies and the secret behind the success of the ‘Asian tiger’ was in the blending of capitalism and Confucianism (Ikeo 88).

Trade Embargoes

A trade embargo is a law or policy that a state initiates to prohibit or restrict the importation or exportation of goods and services. Trade embargoes are imposed for various reasons by states. The United Nations Security Council mainly imposes this kind of restrictions so that its decisions are adhered to. Other reasons are political and they are mainly imposed by rich nations and the European Union. For instance, if a country hosts terrorists and does not want to elect a democratic government then, other nations may impose trade sanctions to destabilize their economy and consequently heed to the calls of the international community.

The United States being a superpower has imposed various embargoes on several countries. The following are examples of the embargoes and the purported reasons for the imposition. Firstly, the United States imposed a trade embargo on Cuba in 1960. The Cuban embargo, “was seen as a way to discourage Soviet expansion in the Western hemisphere, as well as a way to prevent Cuba from building a successful socialist economy and to provoke internal political dissent”, (Mendelowitz 5). Strict restrictions were enacted to ban friends of America to trade with Cuba. The restrictions were tightened further to push for a democratic government and the removal of the rule of Fidel Castro.

Secondly, Mendelowitz (10) reported that Vietnam remained virtually frozen between the 1960s and 1970s. Under the Ford embargo, bilateral trade and financial transactions were prohibited. The embargo was lifted in President Bill Clintons’ era. The restriction was mainly instigated by the defeat of the American Ally South Vietnam by North Vietnam.

Thirdly, North Korea is also a victim of trade sanctions due to the following reasons, “North Korea seen as posing a threat to U.S. national security. designated by Secretary of State as a state sponsor of international terrorism. a Marxist-Leninist state, with a Communism government; and been found by the state department to have engaged in proliferation of weapons of mass destruction.”

Other nations that have been under suction or are: Iraq, Iran, Yugoslavia, Macedonia, Libya Japan, and Indonesia. These sanctions are imposed due to selfish interests, international security concerns as well as protecting the local industries. Some countries try to avoid cheap imports which may be at the expense of the exploitation of local products. A leaner way of imposing embargoes is through the use of import licenses. This discourages importation hence, reducing the imports and which promote the exploitation of locally available resources.

Are Embargoes effective?

This is a question whose answers can only be answered by the outcomes of the known embargoes that have been imposed by countries or the U.N. Malek (97) states that “Unilateral sanctions even when imposed by the largest economy in the world face far more difficult challenges, especially in an increasingly integrated international economy. Even against such small and vulnerable targets as Haiti and Panama, military force eventually was required to achieve American goals.” She further states that the cost of the sanctions is far much high than the benefits of the same.

On the other hand, Mendelowits of the United States General Accounting Office’s report stated that “Economic sanctions can raise the cost of trade and finance to the targeted nations but in most cases have not ruined their economies. (Sanctions can also hurt the sanctioning nation by ending mutually beneficial commercial transactions). The extent of actual economic damage to the target nation, however, does not often determine the success of sanctions; the threat of damage from further sanctions is often more powerful.” Embargoes barely achieve the intended robust goals. Embargoes can only be used to achieve short term goals and military action is necessary for long term goals.

It is recorded that trade embargoes have been imposed more than 70 times by the United States of America. In all these times, America has lifted the embargoes hurriedly without any proper procedures and analysis of the expected results. However, when selfishly interested nations use these embargoes, they often gain until the United Nations or other interested parties intervene to reduce the unfair business practice.

Some countries like South Africa which is a strong economy and has numerous mineral resources enable a poor candidate to head trade sanctions. Others are the oil-producing countries when embargoes are put on the oil-producing countries it causes an energy crisis hence becoming more costly than expected. Cases reported showing that most countries that have been put under embargoes end up becoming more self-sufficient. Examples could be Libya and South Africa.

In conclusion, embargoes may be a useful tool in punishing countries that do not adhere to international law, but they must be imposed carefully together with military action. Some countries have come out of sanctions strongly, while others have decided to cope with the sanctions and proceeded with their agenda. Sometimes the embargoes are due to selfish interests by rich nations hence, increasing the gap between rich nations and poor nations. It is important that the United Nations only allow sanctions that are worth the cause. Embargoes should not be imposed haphazardly lest they bring about undesired effects. Care must be taken each time they are formulated.

Works Cited

Ikeo, Aiko. Economic development in twentieth century East Asia:the international context. Routledge, 1997.

Malek, Abbas. News media and foreign relations: a multifaceted perspective. California: Greenwood Publishing Group, 1997.

Mendelowitz, Allan. ECONOMIC SANCTIONS: Effectiveness as Tools of Foreign Policy. Washington: National Security and International Affairs Division, 2010.

Michael, Kelly et al. The new global politics of the Asia Pacific. Routledge, 2004.

Phōtopoulos, Takēs. Towards an inclusive democracy:the crisis of the growth economy and the need for a new liberatory project. New Yolk: Continuum International Publishing Group, 1997.