There are numerous histories of South East Asia and countless biographies of their post-war strongmen. None of them explains the miracle as accessibly as this book. Written in the same fine spirit of journalism as Enron; The Smartest Guys in the Room or anything by Michael Lewis, it provides a fascinating and reliable foundation for understanding a big lump of recent economic history.
China and India are fast becoming economic engines of the world. Japanese brands are global household names while South Korea and Taiwan are known for electronic innovations. Asian economies are by and large seen as drivers of growth. However, what triggered it and where did it all begin? This book by Michael Schuman examines Asia's economic history post World War II in some detail.
Essentially the author looks at leaders of change, their thought processes, ideas and the changing regulatory and financial landscape in the continent. Industry heads and politicians were equal engines of regional change though not necessarily in all cases in that order, writes the author.
In noting achievements of leaders, Schuman also describes in detail the difference in their approaches. That had to be the case, for the group includes dictators, democrats, generals, technocrats, economists and engineers to name a few. Kim Dae Jung (South Korea), Manmohan Singh (India), Lee Kuan Yew (Singapore) all had different approaches to opening-up and furthering their respective countries' economic growth.
What I like about this book is that it provides economic insight, historical narrative, stories of participants and regional examples of micromanagement in one volume. This makes up for interesting reading as readers get a glimpse of household Asian names and learn more about some they have not heard of.
The author correctly notes that in India and China economic prosperity was triggered by relaxation of restrictive regulations and emerging from under the shadows of state regulators and planners. Schuman also points out that reaping the benefits of free trade does not equate to practising it wholeheartedly.
China, India, Japan, South Korea, Indonesia and Malaysia all at some point in their economic history indulged in domestic protectionist policies while allowing importation of critical technology. Some of them still do. Role of local state sponsored finance is also not exaggerated as domestic companies benefited from competing in international trade markets while receiving loans on favourable terms.
Role of the American consumer and bilateral trade between Asian nations and US is highly significant here too. The author notes that products from Japan, South Korea and Taiwan were accepted by the US in exchange for little or no reciprocity. Looking ahead, he writes that was acceptable few years back, but will not be tolerated when current trade imbalances are this high. Competition between Asian powerhouses for a slice of the American pie as well as the need and quest for reliable sources of energy would also intensify.
Overall, the pipe-dream of eradicating regional poverty is still there and the Asian economic miracle is very much among us. Schuman is the Asia business correspondent of Time magazine and his first-hand feel of the region reflects in his work. This cliché-less look at the progression of Asian economies is well worth reading.
If I were a betting man placing a wager in 1960 on which of the two countries--Sierra Leone or Singapore--would achieve economic development, I would have chosen Sierra Leone. Afterall, in 1960, Sierra Leone was richer than Singapore: Sierra Leone was blessed with natural resources (diamonds), whereas Singapore had no natural resources to speak of. Forty years on, I would have lost and done so terribly. While Singapore has moved from Third World to First World in the space of two generations, Sierra Leone has consistently earned the dubious honour of being the worst place on earth to live (yes, worse than Afghanistan). What accounts for this vast difference in fortunes?
Michael Schuman's book, The Miracle, provides an oft-overlooked part of the puzzle: leadership. He provides an account of East Asia's struggle for economic development through the eyes of the principal players in the region. They include Singapore's Lee Kuan Yew, South Korea's military dictator, park Chung Hee and Indonesia's Suharto. Using decades of reporting, analysis and (unprecedented) access to the leaders--and their heirs--Michael Schuman tells a very human story about how these leaders saw economic development as the only way to legitimise their often dictatorial regimes.
The author dedicates a chapter to every individual Tiger country (Japan, South Korea, Taiwan, Singapore, Malaysia, Indonesia, and India). The story does not stop with political leaders. We hear about the power that Japan's Ministry of Trade and Industry had (under Shigeru Shahashi) had in promoting `chosen' industrial champions and financing them as they developed world-class products, and of Liu Chuanzhi, the founder of Lenovo, who struggled to build a thriving enterprise in a hostile post-Mao China.
What became clear as I read the story of development in Asia was that there is no single `Asian' model of development: while Japan and South Korea favoured government intervention and promotion of local champions; Taiwan and India favoured private entrepreneurship; and Singapore favoured foreign investment. Also, contrary to prevailing development theory in the late 1960s, all the successful Asian economies adopted some form of market-friendly policies in order to achieve development.
The Miracle is not an in-depth treatise on development economics; instead, it is a well-written story of flawed men and women--politicians, bureaucrats and entrepreneurs--who were passionate about putting their countries on the path to economic prosperity. Fortunately, for the world, they, by and large, succeeded in relieving the misery of their people. Many reasons have been adduced for the disparity of economic performance between post-Colonial East Asia and Africa. Some of the reasons have been self-serving (`Asian values'), while others have been laughable (there's something `wrong' with Africans). Michael Schuman's The Miracle posits another plausible reason for the disparity: good leadership. It is a message that's delivered with empathy and poignancy and one that I, as a Nigerian, take to heart; The Miracle deserves four stars.
This is a sweep through the Asian developmental states from the human interest angle - mainly stories and anecdotes. This approach makes it much more memorable than a theoretical analysis of the concept of a developmental state, focussing on dominant and mobile elites, strong bureaucracies, relative state autonomy, economic and political nationalism, the lack of entrenched economic interests at the beginning and weak civil society and human rights. However most of these areas are covered in the book. The standard journalistic technique of building a history around personalities (and using them to illustrate the analysis) is used.
My only quibble would be that I found it a bit disorganised. For example I wanted to read the chapter about Indonesia first, but it is not arranged by country - there are chunks about Indonesia in various parts of the book but you have to do a bit of detective work with the index to find them. Part of the story is told, then you're off to Korea or Japan again, before returning 40 pages later. So for a second edition I would include a page summarising the locations of each country chunk, that would make it easier for those interested in a particular country.