Well written book on the economic policies of East Asia. Can be read as a helpful handbook on what goverments need to do in order to transform a poor country into a highly developed one. The book follows 4 success stories of Asian development: Japan, Taiwan, South Korea and China. It also goes into details why some states have failed in their development efforts, most notably: Phillipines, Malaysia, Thailand and Indonesia. Interestingly, in the 1950 Phillipines was more developed than Taiwan, South Korea and China.
The author advices the following steps for successfull development in this order:
- Distribution of the land to the people, so the agriculture can thrive. Research shows that small cultivated land produces more higher yields than large blocks of land
- Export oriented manifacturing. Export is the key word here, since that is the measure of success that a goverment can use to weed out the badly performant subsidized private companies
- Economic laws that protect and nurture the young and developing industries
Only after the country has developed some of it's industries to compete on a global level should it open it's economy up to the world market.
I found particularly interesting the case study of Malaysia and Philipines that were heavily investing in real estate, since no investment was being made in developing native industries that are focused on exports. This resembled Serbia to me, with it's sky high real estate prices and the feeling that every person that has some money invests it in real estate. The only quality export that Serbia currently has is IT, which might be good enough but it has no quality goverment support.