Milan Pfeiffer
ID: 2021195207
Professor Michael Kim
ISM3513.01.00
History of Globalization and Development
Involvement and Interaction: the Variety of Foreign Influence
East Asian development was by no means an anomaly, illustrated by the growth experienced
in multiple countries within the region. Rather, it was inherently facilitated by key
developments that had happened prior, such as a strong focus on education which produced a
strong base of human capital and large investments in infrastructure. These factors, in stark
difference to those situations experienced by African and Latin American nations, allowed
them to pursue their plans for economic development, such as export-oriented
industrialisation which could actively attract foreign direct investment. This paper posits that
such pre-existing factors as education or existing human capital means that African or Latin
American countries would have, from the onset, no ability to adopt the models employed by
East Asian countries. Furthermore, it will explain why these earlier factors were not present
due to both neo-colonialist policies and aggressive foreign intervention, in Africa and Latin
America respectively.
The first consideration to make is that the economic advancements and development
achieved by most of East Asia came without a natural wealth of resources, which could be
both advantageous or detrimental depending on domestic circumstances. However, they were
able to circumvent this through their distinctive style of development, that being intensive
and efficient use of human capital (Pomeranz, p. 323). This meant that the majority of
primary resources had to be imported into East Asia, impressing upon their governments a
need to industrialise in order to be able to develop further, turning towards a high degree of
manufacturing and their subsequent export for economic growth. This was further made
possible due to direct government intervention to support this growth, providing subsidies
and investments into crucial infrastructure. Lastly, foreign involvement was largely limited to
direct investment, with incentives in place to encourage these practices which led to a great
deal of technology transfer and job creation for a demographic which was already well
educated and equipped to use these boons to their advantage (Pomeranz, p. 341). Such factors
were largely absent in large swathes of Africa and Latin America, where education and health
sectors remain underdeveloped even in the status quo. This consideration would make things
such as an export oriented economy or the attractiveness of foreign direct investment
unlikely.
The reasons for this are plentiful, yet they all share a common cause, being direct foreign
intervention, either through neo-colonialist coercion or direct control through the colonial
process. For Latin America, they remained under influence of both US and European affairs
even after achieving political independence, as they were heavily dependent on them for
economic reasons (Escobar p. 28). Such dependance gave way to a desire for economic
independence and an increase in nationalism, which eventually led to Latin American
countries to transition to import substitution industrialisation, so as to achieve economic
independence. Although it would eventually see some success after the second world war, as
the destruction caused by the fighting would prove a boon for Latin-American exports of
goods such as textiles and petroleum (Bertola and Ocampo, p. 154), this quickly faded with
the reindustrialisation of Western Europe and later Japan. Over time, domestic production
would become highly unsustainable as it relied on an ability to export even with the
production of inferior products, and the growth of a domestic market, which was limited in
size and eventually stopped growing altogether.
For Africa, it was left to recover after multiple centuries of foreign occupation, which had
led to a mass exploitation of its resources and had stumped the ability of its human capital,
with extremely low literacy rates, and had stagnated its development in infrastructure. The
infrastructure that was placed on the African continent was related to transport, so as to
export as much as possible for trade, which largely profited its colonisers (Roberts, p. 83). As
such, much of Africa was covered in railways and agricultural plots, and the economic
growth that occurred in Africa was as a result of its newfound control of its agricultural
sector. However, the production of these primary goods was fairly common and soon waned
in importance, leading to economic stagnation within newly independent states due to the
lack of focus on education. They too, eventually turned to import substitution
industrialisation after achieving independence, however this process, as in Latin America,
similarly led to overpriced and low quality products that failed to make any impact overseas
(Cooper, p. 100).
Thus, the differences that make the East Asian Model of development inapplicable to
Latin America and Africa are threefold; the ability to innovate, the degree of foreign
involvement, and natural resources. East Asian countries, having already a highly educated
population, were better able to adapt to and produce industrial goods and goods that were
highly exportable, such as silk. Along with an industry heavily geared towards exports,
companies operating in East Asia had a high incentive to innovate and produce high quality
products, and they had the ability to do so. Contrarily, even though in reality there was little
innovation in Latin America and Africa due to a lack of competition, it likely would not have
been well able to achieve innovation to the degree of East Asia, as it did not have an
established labour force that was well educated. This would point to them still being
ineffective exporters, even if there would have been an attempt to innovate. Furthermore, it
would have likely led to a worse outcome, as for innovation to happen many protectionist
policies would have had to cease, giving foreign companies with better products access to the
African and Latin American markets.
Foreign involvement also occurred in vastly different ways across the three regions.
Whereas Latin America and Africa experienced direct involvement, often to the point of total
control, East Asia (for the most part) mainly engaged with the world powers of the time
through trade. This distinction is significant, as it impacts the development of the people
living in these areas in different ways. East Asia was able to learn the technology employed
by the likes of the United States or Britain through this free trade, whilst Africa and Latin
America did not experience such technology transfer. Part of this was rooted in
discriminatory assumptions that natives had no capacity for science and technology (Escobar,
p. 22), but nonetheless it invited the exploitation of these natives in Africa and Latin
America. This drastically changed the course of development in these areas when compared
to East Asia, and set them behind from the onset of their independence.
A second reason for the exploitation of Africa and Latin America by foreign powers was
the presence of natural resources, simultaneously a boon and a curse for them. Although it
might have been an extremely valuable commodity, and profitable for the people of these
countries, such resources at the same time caused an over-reliance on them (Cooper, p. 96)
and long-standing political instability within these areas. East Asia on the other hand had no
such resources to rely on, and so were pressed to diversify the products produced to become
feasible for exports. When natural resources are present then, little incentive would exist to
diversify a country's production and so even assuming that these regions would adopt the
East Asian model of development, it is already unlikely that companies would prioritise the
production of new products over existing natural commodities.
In conclusion, East Asian development, although occurring broadly in the region, was
effective primarily within East Asia due to a variety of factors that would not have allowed
for either Africa or Latin America to adopt the same model, to such an extent that their
development might have been worse had the model been used by them.