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Economic Progress in East Asia and Australia to 1988

In East Asia a few relatively poor nations in the 1960s began their journey to highly developed economies. Singapore's prime minister from 1959 to 1990, Lee Kuan Yew, rose to political power in an alliance with the Communists because, he was to say, that was where the people were before 1963. Lee's government faced problems of education, housing and unemployment. Lee was a pragmatist who used a combination of free entrepreneurship and government programs. Singapore ranked 35th in per capita GDP in 1960 with 13.7 percent of the per capita GDP of the world leader, the United States. By 1988, Singapore's per capita GDP was 43 percent of the per capita GDP of United States.

South Korea was also developing rapidly – not long after a devastating war. By the end of 1957, the economy had regained its pre-war level, largely as a result of rapid growth in the production of cotton cloth and of wheat flour and sugar. In 1960, South Korea had a per capita GDP that was 5.4 percent of that of the United States. By 1988 its economy had risen to 25 percent that of the per capita wealth of Untied States, and it did so with considerable government intervention in the economy under authoritarian governments. The Korean government put a lot of importance on educational development. The Koreans pulled themselves up by long hours of hard work and low wages. Rather than working for wealth to spend on frivolous pleasures and consumption, a good portion of their work went into building up the economy, including a manufacturing base for participation in world trade – not unlike the sacrifice that workers under Stalin made to build Russia's industrial base. At a rapid pace, Korea's industrialists introduced modern technologies, and they plowed their profits back into further industrial expansion. South Korea had begun exporting color televisions, radios, videocassette recorders, microwave ovens, watches, personal computers and videotapes. South Korea became a leading producer of ships, including oil supertankers. It built oil-drilling platforms. South Korea's automobile production increased. South Korea became the world's tenth largest producer of steel, and it contributed to arms production, the chemical Industry and construction abroad.

Taiwan was also developing as an exporting power. As an anti-Communist bastion it was benefiting from US aid. US aid made up more than 30 percent of Taiwan's domestic investment from 1951 to 1962. Taiwan moved from cheap, labor-intensive manufactures, such as textiles and toys, into an expansion of heavy industry and infrastructure in the 1970s, and then to advanced electronics in the 1980s. Taiwan's industries had an average annual growth rate of around 14 percent.

Another economic power in the East was Australia. It traded extensively with the West and between 1949 and 1972 it was led politically by the conservative Liberal Party. In 1955 it benefited as an exporter of coal to Japan's burgeoning economy. In 1960 if ranked 7th in per capita  GDP, ahead of Switzerland. By 1988, following a return of the Labor government, like the US it had fallen behind Switzerland and Japan. It had 63 percent of the US per capita GDP in 1960. In 1984 it climbed to 79.2 percent of US per capita GDP, and during the last four years of the Reagan administration, with the Labor Party in power under Prime Minister Bob Hawke, it gained further to 83.8 percent of the US per capita GDP.

Copyright © 1998-2018 by Frank E. Smitha. All rights reserved.