South Korean's Park Chung Hee primary model for China

Park welcomed foreign investment and increased the competitiveness of Korean industry by reducing tariff barriers on raw materials and machinery despite opposition from socialist intellectuals and from business groups who insisted on being protected from this foreign competition; in a typical third world democracy like the Philippines, élite business groups have such political influence that real tariff reform has been delayed for decades. As in Taiwan and Japan, land reform had been successful in South Korea because it was imposed forcibly by political entities which did not have roots in the local landed élite as all third world democracies do. These measures created one of history's greatest economic takeoffs, catapulting South Korea from an economy worse than even the impoverished African countries to one of the half-dozen leading economies in the third world. That is what has made it a primary model for China.

Because of the enormous wage gains, distributed in an egalitarian fashion, that resulted from Korea's boom, the populace came to accept the market institutions they once opposed. And the role of the technocratic managers of the economy became entrenched and prestigious. Second, Park set about the creation of modern institutions. He created an army that was better disciplined than the American divisions present in Korea, had fewer drug problems than the Americans, and was more successful in guarding the border against infiltration than the American division that for a long time held the centre of the barrier along the demilitarized zone. He purged the ministries and the central bank of corrupt and incompetent personnel, created special think tanks to attract the most highly educated Koreans back from America, and then gradually transferred them into the top levels of the bureaucracy until he had created one of the leanest and most effective governments in the world.

In contrast, Cory Aquino was so overwhelmed by patronage pressures that her government expanded by hundreds of thousands of positions while its efficiency deteriorated notably. The brightest ministers were expelled for getting in the way of interest group pressures, and the already huge proportion of the population experiencing absolute poverty and malnutrition grew considerably. South Korean democracy seems vigorous, stable and prosperous, while Philippine democracy seems fragile and empty of enthusiasm. The social consequences of South Korea's spectacular economic growth created the prerequisites of democracy even though Park Chung Hee was not interested in democratization. Economic success created a vast middle class of government employees, businessmen, highly skilled workers and others. The education requirements of economic success created hundreds of thousands of teaching jobs and enrolled millions of students, who turned out to have strong political feelings. Trade exposed the country to foreigners, and an educated population absorbed ideals of democracy that had previously been alien to their traditional Confucian ways. Prosperity banished the fear of starvation that had pushed concepts of political dignity into the background, and it also paid for a military that could defend the country and reduce the fear of renewed warfare that had justified an anti-democratic garrison state.

By 1979 an analysis by the Korean CIA indicated that the government would have to compromise with groups demanding liberalization. When President Park responded instead with plans for assassinating the leaders of student demonstrations, the head of the KCIA assassinated him instead. It took almost another decade for democracy to triumph, but by the late 1980s the pressure for democratization were insuperable and the prerequisites of successful democracy were clearly in place. Similar trends have effected Taiwan, Singapore and Thailand.

In Latin America, only Mexico and Chile seem to be making decisive progress toward these goals. In Chile many of the economic prerequisites were forcefully installed by the military under the post-emergency leadership of president Salinas. The one Pacific Asian country which has consistently followed Latin American-style democracy interrupted by emergency rule, namely the Philippines, has had a history of instability, vast poverty and unemployment, and financial failure exactly parallel to the Latin American experience.

Africa has yet to provide a single example of the achievements of stable security, prosperity and democracy; the one Asian country that attempted democracy in and African-style way, namely Burma, has had a history of impoverishment, instability, financial insolvency and ethnic conflict exactly parallel to the typical African experience.

Economic reform precedes freedom, and freedom precedes democracy. But because the West does not understand why this model is ultimately successful at democratization, countries like South Korea experience a generation of bitter Western denunciations for not following the instant-demofratization models that fail elsewhere. Today's counterpart is the denunciation of China in the same terms that were used for South Korea in the mid-1970s, while Western columnists lavish praise on East European models that are creating widespread hunger, increasing the danger of freezing in winter, spreading ethnic conflagrations and risking a vast migration of refugees. Most of these countries are likely to prove unable to sustain their democracies because hungry, frightened people invariably repudiate their governments if they can.

The paradoxical result has been that the third world's most successful market democracies have been built by leadership that were initially dictatorial and sometimes even hostile to democracy, while some of the worst dictatorships, impoverishment and violence have occurred in countries that have sporadically been ruled by democratic leaders with good intentions.

Supporters of the Gorbachev/Aquino/Shagari model typically argue that durable economic refors must be build upon a political consensus, and that a political consensus can only be built upon democracy. This strategy does not work because economic failure destroys political consensus.

A generation or two later, the regime is forced to address the need for political dignity for different reasons.

First, social changes increase social freedom even in the face of repressive efforts. Second, economic liberalization looses the regime's most powerful lever, namely its control over people's jobs. Third, economic growth expands trade, travel and access to foreign information, and therefore exposes the population to democratic ideas. Forth, demand for some form of democratization from a population that is now educated, self confident and able to organize as a political force become overwhelming. Democracy has a chance when economic growth has given the citizenry the confidence to demand accountability, the resources to impose these demands, and the education to make appropriate choices.

It is worth recalling that Aristotele believed democracy fatally vulnerable to demagoguery; any third world politician trying to implement an economic reform would agree.

Western commentators have not learned the lesson from Taiwan and South Korea; their denunciation of China in 1992 mimic their denunciations of South Korea in 1976. The Asian model works, whereas the Philippines/Nigerian/Brazilian/Russian model fails both economically and politically.

The fallacy of western ideology is that political reform must always precede or coincide with economic reform. Conversely, the fallacy of the Asian authoritarians is that economic liberalization can proceed indefinitely without political liberalization. The Asian experience show that economic success leads inexorably to political reform.

China as a Pacific Asian take off

South Korean's Park Chung Hee, who came to power by military coup in 1961, had strong socialist inclinations. He believed in thoroughgoing government control of the economy, which he achieved through government control of the banks and tight government control over a dozen huge conglomerates. Park was persuaded by his first advisers to permit private ownership and to establish competition among the conglomerates. In both Korea and Taiwan, development begun with a variant of egalitarianism: land reform, egalitarian education and tax policy and a deliberate effort to spread ownership of industry as widely as possible. Through the early 1970s Taiwan government publicly emphasized its commitment to socialism. The government controlled the banking system through the late 1980s and used the banking system to control the economy in accordance with its developments plans.

Lee Kwan Yew's Singapore begun its rapid development after his party's electoral victory in 1959. Lee developed his party as a combined ally and competitor of the Communist party. Victourious, he suppressed the Communist Party and built a state which sought to control the economy through a combination of state ownership of the principal banks and of major industries, state financial dominance build on a social security system that controlled a large fraction of every worker's wage, and regulations that controlled business in extraordinary detail.

South Korea, Taiwan and Singapore all climbed the same basic ladder of development: shoes, textiles and garments first; toys and other light consumer gods second; then refrigerators and other consumer durables; and later some combination of cars, ships, petrochemicals, computers and modern service industries.

Economies that had started by producing rice and tee shirts by then were producing the whole range of modern industrial products, plus a considerable range of modern services. Taiwan and South Korea modified their protected economies by creating export-processing zones where the controls were relaxed so that foreign companies could use them as export platform; these were successful and very influential on the rest of the economy.

Hong Kong from the start was an export-processing zone and in the 1980s become China's principal export-processing zone.

Gradually, political and governmental controls over the major manufacturing and service industries were relaxed. It was a revolution when, for instance, South Korean Banks began in the 1980s to give loans based on creditworthiness rather than just government edicts. The banking system was partially privatized. By the 1980s the relaxation of the hands of the state had progressed sufficiently that Western referred to these reformed socialists as prime examples of the success of capitalism.

They were in fact neither socialist nor capitalist, but a new amalgam of state leadership, market forces and state efforts to facilitate market adjustments. All were run by authoritarian governments. South Korea was a modified military dictatorship, which was willing to hold elections so long as they did not interfere with the development programme and the power of Park Chung Hee, but not otherwise. Hong Kong was a British colony which had developed a range of mechanisms for consulting various sectors of the community, but kept ultimate power to make decision fully in the hands of the colonial Governor General. Singapore was a state in which Lee Kwan Yew and his People's Action Party so dominated political life that elections which yielded one or two opposition legislators were treated as a risk for the nation--and the opposition legislators were isolated and hounded in accordance with this view. Taiwan was initially a repressive authoritarian state with a structure virtually identical to that of communist Beijing.

When the economy became too complex for the chief of state to control it personally, the ensuing decentralization cost the government one of its most powerful political levers.

As trade and education brought more and more contact with foreigners, the population increasingly demanded democratic rights they heard articulated by foreigners. As fear of starvation and war diminished, governments could no longer play on those fears to justify authoritarian control, so the priority for the individual rights and the political dignity rose. By the late 1980s both Taiwan and South Korea were forced to convert from authoritarian rule to democracy, Singapore had to tolerate an organized opposition and the presence in parliament of opposition figures, and Hong Kong had an emergent but much weaker democratic movement.

The Asian economic powers have not abandoned socialist and dictatorial controls willingly. Park Chung Hee of South Korea, his successor Chun Doo Hwan, and Chiang Kai-Shek of Taiwan were no democrats. They were forced by security fears to emphasize economic growth, by the demands of economic efficiency to accept market economic practices, and by the social consequences of economic success to liberalize their politics. China began its post-revolutionary development in 1949. It ruthlessly crushed small businesses, emphasized monopolies rather than competition; it imposed autarky rather than internationalization. It gave priority to heavy industry over light and medium industry. It failed to provide mass education. It gave priority to politics over economics. China failed to recognize and correct these errors. In the Grate Leap Forward (1958-61) Mao Zedong distrupted China's development through inappropriate and unsettling economic policies, and during the Culture revolution (1966-76) he simply ripped China's social structure apart, destroying its institutions of governance, its cadre of leaders, its educational system and its intellectual élite. Taiwan and South Korea made many of the same mistakes as China, but soon, watching one another, learned which policy worked and then they imposed policies ruthlessly.

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