Learning from the Gang: Are There Lessons for Latin America from East Asia?

Abstract

The East Asian Gang of Four', Hong Kong, Singapore, South Korea and Taiwan, have in recent years been held up as a model of development for Latin America. Attempts have been made to draw lessons for the Latin American countries. In view of the superior economic performance of the East Asian countries, particularly in the 1980s, in terms of growth of GDP, industrial output and manufactured exports, employment, income distribution, inflation and debt servicing problems, it is not surprising that attempts have been made to draw such lessons. The argument of this paper is that many of the lessons which have been drawn are false lessons, because they have been based on a number of myths concerning the East Asian NICs. In the next section, the main policies which have been recommended in Latin America in order to emulate the East Asian NICs are briefly discussed. In section 3 some arguments which suggest that the experience of the East Asian NICs is irrelevant for Latin America are considered. In the main part of the paper (section 4), the policies identified in section 2 are subject to critical scrutiny to show that they do not correspond to the reality of the East Asian experience. Finally, the concluding section considers whether there are any alternative lessons to be drawn for Latin America.