INTERNATIONAL POLITICAL ECONOMY SERIES General Editor: Timothy M. Shaw, Professor of Political Science and Inter- national Development Studies, and Director of the Centre for Foreign Policy Studies, Dalhousie University, Nova Scotia, Canada Recent titles include: Pradeep Agrawal, Subir V. Gokam, Veena Mishra, Kirit S. Parikh and Kunal Sen ECONOMIC RESTRUCTURING IN EAST ASIA AND INDIA: Perspectives on Policy Reform Solon L. Barraclough and Krishna B. Ghimire FORESTS AND LIVELIHOODS: The Social Dynamics of Deforestation in Developing Countries Kathleen Barry (editor) VIETNAM'S WOMEN IN TRANSITION Jorge Rodriguez Beruff and Humberto Garcia Muniz (editors) SECURITY PROBLEMS AND POLICIES IN THE POST-COLD WAR CARIBBEAN Ruud Buitelaar and Pitou van Dijck (editors) LATIN AMERICA'S INSERTION IN THE WORLD ECONOMY: Towards Systematic Competitiveness in Small Economies Steve Chan (editor) FOREIGN DIRECT INVESTMENT IN A CHANGING GLOBAL POLITICAL ECONOMY William D. Coleman FINANCIAL SERVICES, GLOBALIZATION AND DOMESTIC POLICY CHANGE: A Comparison of North America and the European Union Paul Cook and Frederick Nixson (editors) THE MOVE TO THE MARKET? Trade and Industry Policy Reform in Transitional Economies John Healey and William Tordoff (editors) VOTES AND BUDGETS: Comparative Studies in Accountable Governance in the South Noeleen Heyzer, James V. Riker and Antonio B. Quizon (editors) GOVERNMENT-NGO RELATIONS IN ASIA: Prospects and Challenges for People-Centred Development George Kent CHILDREN IN THE INTERNATIONAL POLITICAL ECONOMY David Kowalewski GLOBAL ESTABLISHMENT: The Political Economy of North/ Asian Networks Laura Macdonald SUPPORTING CIVIL SOCIETY: The Political Role of Non-Governmental Organizations in Central America Gary McMahon (editor) LESSONS IN ECONOMIC POLICY FOR EASTERN EUROPE FROM LATIN AMERICA David B. Moore and Gerald J. Schmitz (editors) DEBATING DEVELOPMENT DISCOURSE: Institutional and Popular Perspectives Juan Antonio Morales and Gary McMahon (editors) ECONOMIC POLICY AND THE TRANSITION TO DEMOCRACY: The Latin American Experience Paul J. Nelson THE WORLD BANK AND NON-GOVERNMENTAL ORGANIZATIONS: The Limits of Apolitical Development Archibald R. M. Ritter and John M. Kirk (editors) CUBA IN THE INTERNATIONAL SYSTEM: Normalization and Integration Ann Seidman and Robert B. Seidman STATE AND LAW IN THE DEVELOPMENT PROCESS: Problem-Solving and Institutional Change in the Third World Tor Skalnes THE POLITICS OF ECONOMIC REFORM IN ZIMBABWE: Continuity and Change in Development John Sorenson (editor) DISASTER AND DEVELOPMENT IN THE HORN OF AFRICA Larry A. Swatuk and Timothy M. Shaw (editors) THE SOUTH AT THE END OF THE TWENTIETH CENTURY: Rethinking the Political Economy of Foreign Policy in Africa Deborah Stienstra WOMEN'S MOVEMENTS AND INTERNATIONAL ORGANIZATIONS Sandra Whitworth FEMINISM AND INTERNATIONAL RELATIONS David Wurfel and Bruce Burton (editors) SOUTHEAST ASIA IN THE NEW WORLD ORDER: The Political Economy of a Dynamic Region Asian Industrialization and Africa Studies in Policy Alternatives to Structural Adjustment Edited by Howard Stein Associate Professor of Economics Roosevelt University, Chicago ~ Palgrave Macmillan ISBN 978-0-333-65727-0 ISBN 978-1-349-24473-7 (eBook) DOI 10.1007/978-1-349-24473-7 ASIAN INDUSTRIALIZATION AND AFRICA Selection, editorial matter, Chapters I and 2 © 1995 by Howard Stein Chapters 3-8 © 1995 by Macmillan Press Ltd All rights reserved. No part of this book may be used or reproduced in any manner whatsoever without written permission except in the case of brief quotations embodied in critical articles or reviews. For information, address: St. Martin's Press, Scholarly and Reference Division, 175 Fifth Avenue, New York, N.Y. 10010 First published in the United States of America in 1995 ISBN 978-0-312-12433-5 (cloth) ISBN 978-0-312-12773-2 (paper) Library of Congress Cataloging-in-Publication Data Asian industrialization and Africa : studies in policy alternatives to structural adjustment I edited by Howard Stein. p. em. Includes bibliographical references. ISBN 978-0-312-12433-5 (cloth)-ISBN 978-0-312-12773-2 (pbk.) I. Industrial promotion-Asia, Southeastern. 2. Industrial policy-Asia, Southeastern. 3. Industrial promotion-East Asia. 4. Industrial policy-East Asia. 5. Industrial policy-Africa. 6. Africa-Economic policy. 7. Africa-Economic conditions-1960- 1. Stein, Howard, 1952- HC44l.Z91533 1995 338.95--dc20 94-31707 CIP To Alisa and Joshua Contents List of Tables and Figures ix Notes on the Contributors xt Acknowledgements xm Abbreviations xiv Maps of East and Southeast Asia and Sub-Saharan Africa xvi Policy Alternatives to Structural Adjustment in Africa: An Introduction Howard Stein 2 The World Bank, Neo-Classical Economics and the Application of Asian Industrial Policy to Africa 31 Howard Stein 3 Japan's Industrial Development, 1868-1939: Lessons for Sub-Saharan Africa 53 E. Wayne Nafziger 4 The Korean Miracle (1962-80) Revisited: Myths and Realities in Strategies and Development 87 Kwan S. Kim 5 The State as Agent: Industrial Development in Taiwan, 1952-1972 145 Deborah Brautigam 6 Colonialism and Entrepreneurship in Africa and Hong Kong: A Comparative Perspective 183 S. Gordon Redding and Simon Tam 7 Foreign Investment, the State and Industrial Policy in Singapore 205 Linda Lim vii viii Contents 8 East Asia and Industrial Policy in Malaysia: Lessons for Africa? 239 Chris Edwards Bibliography 257 Index 279 List of Tables and Figures Tables 4.1 The Industrial Composition of South Korean Public Sector Investment 93 4.2 Comparison of South Korean Bank Interest Rates in Export vs. Commercial Loans 98 4.3 Effective Exchange Rates for South Korean Exports 101 4.4 Nominal and Effective Rates of Protection by Industry, South Korea (1968 and 1978) 105 4.5 Sources of Foreign Direct Investment in South Korea (1962-82) 110 4.6 Contribution to Value Added by Conglomerates in South Korea 113 4.7 South Korean Growth Rates in Manufacturing Output and Employment by Size of the Firm (1967-1979) 114 4.8 Real Wages and Labor Productivity in Manufacturing, South Korea (1967-1977) 116 4.9 Wage Earnings in Relation to Gross Output and Value Added in Manufacturing, South Korea (1958-1976) 118 4.10 Per Worker Man-Hours in Selected East Asian Countries 118 4.11 Comparisons of Planned Targets and Performance, South Korea (1962-1981) 129 7.1 Singapore's Economic Performance (1960-1990) 206 7.2 Foreign Direct Investment Stock in Manufacturing, Singapore (1970-89) 217 7.3 Foreign Direct Investment Stock in Manufacturing by Industrial Sector, Singapore (1980 and 1989) 218 7.4 Foreign Direct Investment Stock in Manufacturing by Country of Origin, Singapore (1980 and 1989) 218 7.5 Principal Statistics of Manufacturing by Major Source of Capital, Singapore 1990 220 7.6 Selected Ratios of Manufacturing Statistics by Capital Ownership, Singapore 1990 221 ix X List of Tables and Figures 8.1 Phases of Industrial Development in Malaysia 243 8.2 The Import Content of Manufactured Goods - Malaysia (1987) and South Korea (1975) 244 8.3 SSA, Malaysia and South Korea: A Comparison 247 Figures 4.1 Korea's Neomercantalist Model 90 4.2 Nominal and Effective Exchange Rates for Korean Exports 100 4.3 Real Wages and Labor Productivity in Manufacturing, South Korea (1967-1978) 117 6.1 A Framework for Exploring the Contextual Structure of Chinese Business 186 6.2 The Link between Social and Entrepreneurial Dynamics 198 8.1 Industrialization and GOP 249