The Importance of Leadership for Asia's Development

ASIA'S  DEVELOPMENT has been so successful that it has been labelled a “miracle.” However, if this is true for economic growth, the picture looks far less impressive if you look at other dimensions of economic development. That is why a return of leadership is needed.

Looking at Asia’s phenomenal economic growth figures since the second half of the 20th century, it becomes easy to understand why international observers have used the word “miracle.” OECD economist Kichiro Fukasaku rightly wrote on the emergence of East Asia as the third growth pole of the world economy. From 1975 to 2000, East Asia grew faster than any other region in the world, attaining average per capita growth rates of 6 percent a year. One example gives the picture of the so-called miracle: South Korea, only as rich as Ghana in 1960, is now a OECD member posting a GDP per capita at purchasing power parity higher than Italy.

Which factors contributed to the Asian miracle? Of course, there were many the drivers behind it, such as higher level education, huge saving rates and the crucial role played by the United States as regional security provider and a huge market for exporting goods. Nonetheless, what really distinguished the Asian economic path from the rest of developing countries was leadership. Bright-minded entrepreneurs and forward-looking politicians worked not only to seek personal profit, rather they were committed to create an economic renaissance for their nations. From Sony’s Akio Morita to Wipro’s Azim Premji, from Singapore’s Lee Kuan Yew to Korea’s Park Chung-hee, inspiring leaders were the backbone of the early stages of each Asian economy.

Think about it. Why did Indonesian PhD scholars educated in the U.S., the so-called “Berkeley Mafia,” who understood and got to know Western democratic values, decide to work under Suharto and accepted his authoritarian stance? Why did Albert Winsemius, a Dutch economist and U.N. official, join Lee Kuan Yew despite having such a different background and understanding of personal freedom and democracy? For there was a genuine, contagious dynamism born out of a common vision: increasing the nation’s general level of prosperity.

Now, a strong economy is not sufficient for national development. John West, Asian Century Institute Executive Director puts it clearly: “We need the government to provide us with infrastructure like water, sanitation, roads, bridges and so on. We also need the government to provide at least basic health and education services”.

Asia is at a crossroads, for it eventually reached a “miracle of riches,” not yet a “miracle of life,” as Charles Kenny described it in his book Getting Better. Overall Asia’s development experience has been one of success and an example for other parts of the world. However aspects of development other than economic growth, from income inequality to social inclusion to rapid urbanization, have not achieved comparable results. So far only one Asian country, namely Singapore, has been ranked among the top ten on the UN Human Development Index. In terms of improving quality of life, the Middle East and North Africa did relatively much better than East Asia in the last 50 years. Publications by the Asia Development Bank have shown that inequality has been on the rise throughout East Asia during the 1990s-2000s. Even Japan, a country where a relatively equal income distribution was a trademark of postwar economic development, has seen rising income inequality among working age people.

As Justin Lin puts it, economic development is a “dynamic process” that “requires industrial upgrading and corresponding improvements in ‘hard’ and ‘soft’ infrastructure at each level.” Along this process ― Lin argues ― governments should put in place policies aimed at “facilitating industrial upgrading and infrastructure improvements,” which means matching ongoing economic growth with the other dimensions of development.

At the beginning of the miracle, leaders across the region well understood the paramount importance of rapid growth to get away from extreme poverty conditions and climb the technology ladder. At present, Asian political and economic actors should equally realize that for sound economic growth to be maintained in the long run, the other dimensions of economic development must be taken into consideration and addressed.

2015 is the year set by the UN to reach the Millennium Development Goals (MDGs). Asia achieved perhaps the most pressing goal, the halving of poverty, with eight of the 37 countries in the region moving from low to middle income status between 2000 and 2011. The whole region needs to continue working to achieve the MDGs, from the reduction of child mortality to the promotion of social inclusion. Leadership is needed again.

References 

Overview: Miracle, Crisis and Beyond OECD 2004
Asia’s Economy – No Miracle! Asian Century Institute 2014

New Structural Economics: A Framework for Rethinking Development The World Bank 2010

Getting globalization right: the East Asian Tigers