The Success Stories and its Limits: The Concrete Case

Studies (3 lectures)

• - Russia/Soviet Union

• - Latin America in the Era of Catching Up Industrialisation

• - East Asian Miracle: The Rise of the New Industrial Pole

The empire model of modernisation

• Goals• – maintenance of

military-political power, ability to defensive and offensive war

• Means• – modernisation of

army & the state governance, selective borrowings of the advanced technolo-gies and scientific accomplishments important for militarisation

The Rise of Dualism in Russia

Army & military industry resourcesExploitation ofcountry-side

Conservation of backwardness as the main obstacle to further modernisation

Alexander Pushkin on the internal central-peripheral structure of Russia

• “Whatever for caprice of spending• ingenious London has been sending• across the Baltic in exchange• for wood and tallow; all the range• of useful objects that the curious• Parisian taste invents for one –• for friends of languor, or of fun,• or for the modishly luxurious –• all this, at eighteen years of age• adorned the sanctum of our sage.” (Eugene

Onegin)

GDP per capita in some countries of Latin America

and Europe (including Russia), 1870-1938 Countries Absolute amount of GDP per capita,

measured by PPP (in dollars of 1990)The ratio of countries’ GDP per capita

to the world average

1870 1900 1913 1929 1938 1870 1900 1913 1929 1938

France 1 858 2 849 3 452 4 666 4 424 2.02 2.18 2.17 2.47 2.30

Germany 1 913 3 134 3 833 4 335 5 126 2.08 2.40 2.41 2.30 2.67

United Kingdom 3 263 4 593 5 032 5 255 5 983 3.55 3.52 3.16 2.79 3.11

Russia/USSR 1 023 1 218 1 488 1 386 2 150 1.11 0.93 0.93 0.74 1.12

Argentina 1 311 2 756 3 797 4 367 4 072 1.43 2.11 2.39 2.32 2.12

Brazil 740 704 839 1 106 1 291 0.80 0.54 0.53 0.59 0.67

Chile - 1 949 2 653 3 396 3 139 - 1.49 1.67 1.80 1.63

Mexico 710 1 157 1 467 1 489 1 380 0.77 0.89 0.92 0.79 0.72

Venezuela - 821 1 104 3 426 4 144 - 0.63 0.69 1.82 2.15

World in average *) 920 1 305 1 592 1 884 1 923 1.00 1.00 1.00 1.00 1.00

For comparison of Uruguay with Denmark

• Dieter Sengaas. The European Experience: A Historical Critique of Development Theory. Leamington Spa, Dover (N.H.): Berg Publishers, 1985 (1-st published in Frankfurt-am-Main, 1982, in German)

The ratio of some Latin American and European countries’ (including Russia/USSR) GDP per capita to the world

average, 1929-1970

Countries 1929 1938 1950 1960 1970

France 2. 47 2. 30 2. 33 2. 55 2. 92

Germany/FRG 2. 30 2. 67 1. 91 2. 89 3. 03

United Kingdom 2. 79 3. 11 3. 14 2. 92 2. 70

Russia/USSR 0. 74 1. 12 1. 27 1. 34 1. 40

Argentina 2. 32 2. 12 2. 23 1. 90 1. 84

Brazil 0. 59 0. 67 0. 75 0. 80 0. 77

Chile 1. 80 1. 63 1. 71 1. 47 1. 32

Mexico 0. 79 0. 72 0. 93 0. 95 0. 95

Venezuela 1. 82 2. 15 3. 32 3. 32 2. 73

World in average *)

1. 00 1. 00 1. 00 1. 00 1. 00

Limits of Import Substitution Industrialisation to itself (Latin

America)• 1) A shortage of material, financial, and

human resources;

• 2) Conservation of the internal central-peripheral structure;

• 3) Necessity to enlarge importation of capital goods and to maintain the traditional export;

• 4) Impossibility to redistribute national income in extending degree

The structure of the external trade of Brazil, 1960-1984

2,2%

41,4%

97,5%

58,5%

0,3% 0,1%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Other

Primary goods

Manufactured goods

Brazil – dynamics of GDP (1965-1980) and the public external debt (1965-1975)

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

4,0

4,5

5,0

1965 =

1,0

GDP, 1965-1980

The public externaldebt, 1965-1975

Brazil – skyrocketing growth of the external debt, 1978 – 1980 – 1985, billions US$

52,285

70,025

101,920

0,000

20,000

40,000

60,000

80,000

100,000

120,000

Two generations of ‘tigers’

• The first-tier ‘tigers’

• - Hong Kong

• - Singapore

• - Taiwan

• - South Korea

• The second-tier ‘tigers’

• - Malaysia

• - Thailand

• - Indonesia (‘semi-tiger’)

• - The Philippines (‘under-tiger’)

GDP p/c (US$ of 1990 on PPP) – 1960-1970-1980-1990

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

BrazilMexicoHong KongSingaporeTaiwanSouth KoreaGhanaCongo, DR (Zaire)

GDP p/c (US$ of 1990 on PPP) – 1960-1970-1980-1990

1960 1970 1980 1990

Brazil 2335 3057 5198 4923

Mexico 3155 4320 6289 6119

Hong Kong 3134 5695 10503 17541

Singapore 2310 4439 9058 14365

Taiwan 1492 2980 5869 9886

South Korea 1105 1954 4114 8704

Ghana 1378 1424 1157 1063

Congo, DR (Zaire) 755 782 617 525

Flying Geese Model

• K. Akamatsu. A Historical Pattern of Economic Growth in Developing Countries. – The Developing Economies, vol. 1, N 1, March – August 1962.

• P. Korhonen. The Theory of the Flying Geese Pattern of Development and Its Interpretations. –Journal of Peace Research, vol. 31, N 1, 1994.

• M. Tateishi. Southeast Asian Flying Geese? – In: Southeast Asia’s Misunderstood Miracle: Industrial Policy and Economic Development in Thailand, Malaysia and Indonesia. Ed. by K. S. Jomo. Boulder (Col.), Oxford: Westview Press, 1997.

• UNCTAD. Trade and Development Report 1996. N.Y., Geneva: UN, 1996, pp. 75-81.

The gross internal investments in fixed capital, as percentage of GDP, in East/Southeast Asian Newly

Industrialising Countries, 1970-1995

Countries Y e a r s

1970 1975 1980 1985 1990 1995

Hong Kong 18.6 19.3 33.2 21.5 26.1 30.6

Korea 24.5 25.6 32.1 28.6 37.3 36.7

Singapore 32.5 35.1 40.7 42.2 32.5 33.7

Taiwan, prov. n. a. n. a. n. a. 18.8 22.4 22.9

Indonesia 13.6 a) 20.3 a) 20.9 b) 23.1 28.3 28.4

Malaysia 16.1 25.1 31.1 36.3 32.4 43.0

Thailand 24.1 22.3 25.2 27.2 40.4 41.1

The gross internal investments in fixed capital, as percentage of GDP, in East/Southeast Asian Newly

Industrialising Countries, 1970-1975-1980-1985-1990-1995

0,0

5,0

10,0

15,0

20,0

25,0

30,0

35,0

40,0

45,0

Hong Kong Korea Singapore Taiwan

0,0

5,0

10,0

15,0

20,0

25,0

30,0

35,0

40,0

45,0

50,0

Indonesia Malaysia Thailand

The Developmental State

• The Developmental State. Ed. by Meredith Woo-Cumings. Ithaca – London: Cornell University Press, 1999

• Ha-Joon Chang. The East Asian Development Experience: The Miracle, the Crisis and the Future. London – New York: Zed Books, 2006

The colonial heritage and development