East Asian success models: Meiji Restoration – Case study for Bharat.


Dharma Dispatcher
Senior Member
Nov 10, 2020
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Slightly adapted from the works of Anuradha Dr. Rakesh Muduli and Sri Devasis Mishra at HINDUPOST Networks . Special acknowledgements to RAJIV MALHOTRA Indic Studies.

The Prelude:

The expansion of Indian civilization "to those countries and islands of the Orient where Chinese civilization, with strikingly similar aspirations, seemed to arrive ahead of it," is one of the outstanding events in the history of the world, one which has determined the destiny of a good portion of mankind. "Mother of wisdom gave her mythology to her neighbors who went to teach it to the whole world. Mother of law and philosophy, she gave to three-quarters of Asia a god, a religion, a doctrine, an art. She carried her sacred language, her literature, her institutions into Indonesia, to the limits of the known world, and from there they spread back to Madagascar and perhaps to the coast of Africa, where the present flow of Indian immigrants seems to follow the faint traces of the past." Sylvain Levi, L'lnde civilisatrice: Apergu historique (Paris, 1938), p. 136

"BHARAT is culturally the Mother of Japan. For centuries it has, in her own characteristic way, been exercising her influence on the thought and culture of Japan." : Hajime Nakamura(Japanese Orientalist, Indologist, philosopher and academic of Vedic Dharmic Buddhist scriptures)

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The ongoing struggle of Bharat to launch itself onto the path of economic development has been patchy and challenging even more than 70 years after Independence. We tend to look towards foreign nations as role models for attaining our goals, but perhaps we need to look closer to home, that is, within Asia.

Soviet Union split, cold war came to a halt, western scholars celebrated it as the triumph of capitalism, democracy and the end of the history. They boasted the universalism of western model of governance, institutions and ideals. Some scholars too prophesied that capitalism and democracy are the only models to achieve all-round advancement, at par with western nations. They declared that western nations are ready to export capitalism and democracy to the rest of the world.

“Can Asians think?”, a compilation of thought provoking first rate essays, first time by an Asian, expressed dissenting voice against the conventional wisdom of western liberal intellectual orthodox scholars. Author Sri Kishore Mahbubani, a Singaporean diplomat, refuted the claim of western universalism and argued that something which is good for western nations may not be good for other nations.

As per the author, his essays are intended to stimulate Asian minds to address questions about their future. He warned the Asian nations to search their own model of governance, institutions and ideals, rooted in their own age-old civilizations. The author stressed that western nations have already contributed a large in the field of science and technology for the service of mankind and hence, it is now the time for Asian nations to contribute their share. But, the author reminded this must be done by inventing and exploring their own, not by borrowing or importing from outside Asia.

Communist ruled china realised and worked on this idea from the eras of Deng Xioping, prioritised to revive Confucianism, Taoism and Mandarin language as the base civilizational bed rock, to search their models of different institutions in their own historical past. This may the reason for China’s emergence as the most developed and influential nation.

Then we cover the spectacular story of South Korea’s journey to development from a colonized and later war-ravaged agrarian country in the 1940s and 1950s to a global economic power by 2000. In 2016, it became the eleventh largest economy in the world in terms of GDP, and is today one of the most technologically advanced nations.

Then you have this ‘Taiwan Miracle’.
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Today Japan under Shinzo Abe followed the footstep of China and are also reviving their own civilizations to search their own alternative models of various institutions in order to modernise and advance at par with western nations. Scholars are now debating and advocating the newly described term “Civilizational State” to properly define the identity of these countries in place of “Nation State”.

Bharat, the home of Hindu Dharmic Vedic civilization, is the only state which has dumped its core civilizational values exported foreign amreekunt ideals and institutions to modernise itself. This is the biggest tragedy ever met by any civilization in its own land. This may be the reason why Bharat which used to be top most level dominant rich cultural political power for well documented 5000 years before present, today, despite innumerable improvements and positives finds itself operating at a lower effectiveness and efficiency.

Why revival of Hindu Civilization?

Max Weber shows that the societies which have grounded the protestant Christianity ethics are only prone to economic growth and Asiatic societies, evolved from Hindu Dharma, Buddhism, Confucianism, Taoism, Shintoism, cannot advance economically due to their passive look to the living life and extra interest for salvation after life. To the surprise of many western protestant Christian states, Japan, an Asian Nation, defied the Weber’s hypothesis, by its rapid economic growth of double digit of 12%, hence become subject for research interest.

Paul Bairoch, a Swiss economic historian, published his researched work “Economics and World History: Myths and Paradoxes” covering economic history of 19th and 20th centuries, which revealed up to 1820, China, followed by BHARAT were the largest contributors to world Gdp which declined later with the simultaneous rise of western nations out of direct result of genocide of 4 continents Asia 2 Amreekas and Australia Africa.

The author concluded the reason of growth of western nations is due to exploitation of colonised nations. The developed nations of Organisation for Economic Co-operation and Development cannot digest this revelation and assigned Angus Maddison, noted economic historian of brits, to unravel the truth. He published his research thesis “The World Economy: Historical Statistics” in 2004, covering contribution of nations in Gdp for last two millennium.

Result Paul Bairoch’s Study of World Economy, Source: SwarajyaMag

The global contribution to world’s Gdp by major economies from year 1 to 2003 according to Angus Maddison’s estimates.

The opponents of revival of Hindu civilization must observe that Bharat was the leading contributor, with china in the 2nd position, throughout 1st millennium. China overtook Bharat, only around 1500ad. They both led the world up to 1820ad and declined after the colonial rule established by the Europeans. China again gained her momentum around the end of the twentieth century and emerged as an economic superpower.

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Though, growth of Bharat has been started in late twentieth century, but still to be honest, China is far ahead in every aspect. The sole reason of China’s economic growth can be attributed to its positive connection with civilizational heritage.

Though China ruled by a politically communist regime, still they developed strong interest and affinity to their culture and civilization. Whereas Bharatiya communists, are still filled with hatred towards Hindu civilization, which is verifiable from the coining of the term “Hindu Rate of Growth” by Prof. Raj Krishna to the poor economic growth during 1950s to 1980s.

In the last 70 years Hindus has been taught systematically in their class curriculum to hate their civilizational heritage as unscientific, unprogressive, uncivilised and irrational. Todays Hindu generations are the product of such education system, who looked down upon their own civilizational heritage.

Noted Hindu revivalist thinker Shri Rajiv Malhotra, while challenged the western universalism in his book “Being Different”, established that the essence of revival of Hindu civilization is to maintain the diversity of the world. He reminded the Abrahamic world, that it is the Hindu civilization in the lap of Bharatiya subcontinent, which has protected and preserved the minor religions like Jainism, Buddhism, Sikhism and the micro religion of Zoroastrianism.

It very well-known that Hindu Bharat had provided safeguard and freedom of flourish to the earlier persecuted Syrian Christians, Jews and Zoroastrian communities when Christianity and Islam invaded their land. When the Islamic rule was established in southern coastal region and Christian rule established in Goa those sheltered communities were again persecuted in their hand. Therefore, Hindu Civilization must be preserved and flourished to maintain religious diversity of the world.

The polytheistic civilization which is the bedrock of plurality and diversity of society, once flourished in entire Europe, Arab, and American main land has been destroyed with the advent of these monotheistic religions of Christianity and Islam. Hindu civilization is the only polytheistic society which has survived and hence need to be revived in order to maintain the composite and diversity nature of Bharatiya society.

It is well documented that ancient Bhartiyas Hindus had flourished a vibrant culture of innovation and creation, this has been clearly reflected in Sanskritic literatures, ancient crafts and sculptures. This culture had been ruptured during the colonial era. The revival of Hindu civilization will also revive the scientific temperament and skills among its generations.

The duty and responsibility of a state is to protect its indigenous civilization. Bharatiya state must realise that the Hindu civilization is intrinsic to its land and must care for its protection. Therefore, Bharatiya state must work for repealing the provisions from Article 25 to Article 30 in Bharatiya Constitution, which are systematically and gradually annihilating the Hindu civilization.The call for revival of Hindu civilization is an honest effort by a Hindu to define its own social and national identities in a way which will enhance his sense of self-esteem in a world, where his immediate ancestors had subconsciously accepted that they were lesser beings in a western universe and Abrahamic world. The opponents must not misunderstand it as a war like call of jihad or crusade in Abrahamic world.

To provide an immediate boost, Bharatiya state must withdraw its control on Hindu temples. Bharatiya state must care for implementing Uniform Civil Code and introducing a subject “Religion and Philosophy” in educational curriculum to enable Bharatiya kids and youths know the fundamental doctrines and philosophies of every religion. Bharatiya judiciary system should be more cautious while admitting a pil or pronouncing a judgement or passing a remark against any Hindu civilizational institution.

Above all, Bharatiya state must understand that reconnection with civilizational heritage will definitely boom the morals of its generations which will ultimately emerged Bharat into a global power in the field of science, technology, economics, political and social sectors.

On Japan’s path to economic growth :

Knowledge shall be sought throughout the world so as to strengthen the foundations of imperial rule. -1868 Meiji Pledge

Beginning in the mid-19th century when most of the Ancient civilisation viz Chinese and Bhartiya were on decline no other, non-Christian, non-european nation met this challenge more dynamically and dramatically than Japan. Long before its recent accomplishments in automobiles and electronics and pop-culture phenomena like manga and anime, and long before its disastrous plunge into militarism and war in the 1930s and 1940s, Japan was widely recognized as the great nation-building “success story” of the non-Western world in 18th -19th ad onwards.

In the 19th and early-20th centuries, Japan alone among the major countries of Asia, Africa, and the Middle East succeeded in escaping colonial or neo-colonial domination by the amreekunts and expansionist nations of europe. Japan alone adopted an agenda of industrialization and so called “westernization” that enabled it to emerge as a global power in its own right. Indeed, when the victorious nations of World War One met at Versailles in 1919 to dictate peace terms and form the League of Nations, Japan participated as one of the “Big Five” powers, alongside the United States, England, France, and Italy.


This was an extraordinary accomplishment, particularly when one considers how backward the country had appeared to be only a few generations earlier.

For seven centuries, from the late-12th century until 1868, Japan was ruled by a warrior elite. For over two centuries, beginning in the 1630s, the feudal government based in Edo (present-day Tokyo) had enforced a strict “closed country” (sakoku) policy that prohibited Japanese from leaving and foreigners from entering.

While this Europe and the United States experienced revolutions, and adopted expansionist policies, Japan turned inward—embracing seclusion and, at least at official levels, venerating Shinto Dharmic Buddhist fuision type of tradition.

Cities grew, commerce flourished, and literacy became widespread during this long period of isolation. Peace and relative prosperity spawned the vibrant popular culture we can still visualize vividly today through traditional woodblock prints (which first appeared in the 17th century). Still, in the mid-1800s Japan was a small, introverted, resource-poor, and fundamentally agrarian society. Even within the context of Asia alone, it seemed dwarfed in China’s shadow in every way—historically, culturally, physically, and on any imaginable scale of human and natural resources.

This was the country Commodore Matthew Perry of the amreekunts encountered when his warships made two visits in 1853 and 1854 to force the feudal government to abandon the “closed country” policy.

This was a daunting challenge to Japan’s leaders, who were aware of Western imperialism and “gunboat diplomacy” elsewhere—including in China next door. In the notorious “Opium War” of 1839 to 1842, defeated China was forced to accept and legalize the opium trade of the Western countries. In the sordid “Arrow War” of 1856 to 1858, shortly after Perry’s mission to Japan, the British and French had bombarded Canton and Tientsin and forced China to make additional humiliating concessions.

No one was sure, at the time, whether Japan would sink or swim.

No one anticipated that Japan would or could throw off seven centuries of feudal rule quickly and announce—as the new government did within a matter of months—that “evil customs of the past shall be broken off” and “knowledge shall be sought throughout the world so as to strengthen the foundations of imperial rule.” That was the “Charter Oath” of 1868.
The Charter Oath of the Meiji Restoration (1868) :
  • By this oath we set up as our aim the establishment of the national weal on a broad basis and the framing of a constitution and laws.
  • Deliberative assemblies shall be widely established and all matters decided by public discussion.
  • All classes, high and low, shall unite in vigorously carrying out the administration of affairs of state.
  • The common people, no less than the civil and military officials, shall each be allowed to pursue his own calling so that there may be no discontent.
  • Evil customs of the past shall be broken off and everything based upon the just laws of Nature.
  • Knowledge shall be sought throughout the world so as to strengthen the foundations of imperial rule.

Certainly no one dreamed that in 1894 and 1895, a mere 40 years after Perry’s arrival, Japan would be capable of mobilizing a modern army and navy and bringing China to its knees—and, 10 years after that, doing much the same to Tsarist Russia.

The Land of the Rising Sun “Civilization & Enlightenment” kicks in full throttle :
As 1867 gave way to 1868, the feudal government that had opened the country was overthrown by a radical movement led largely by young samurai. The slogans on which the rebels rode to power were reactionary. They called for turning back the clock by “expelling the barbarians” (jōi), and for “revering the emperor” (sonnō) rather than venerating the warrior leaders ensconced in Edo.

Once the rebels had attained power, they honored half of this “sonnō jōi” equation. They placed the emperor—a hereditary and long powerless figure—nominally at the head of their new government. And they immediately flip-flopped and embraced the foreign barbarians.

The new leaders adopted an auspicious new name for the new era: Meiji, written with two ideographs literally meaning “Bright Government.” Because supreme authority had ostensibly been “restored” to the imperial dynasty, the occasion was referred to as the Meiji Restoration. The emperor, still in his mid-teens in 1868, became identified as the Meiji emperor. His long reign, extending to 1912, is known as the Meiji period.

Had the movement to overthrow the government in 1868 failed, its leaders would have gone down in history as reactionary and ruthless terrorists. As it turned out, victory transformed those of them who survived the years of civil disorder into pragmatists. Almost overnight, they became adroit practitioners of what we call today “nation building” and “modernization.”

Japan righteously involved building a strong state and rich industrialized nation capable of resisting Western pressure and exploitation

The coal-burning paddlewheel ships that astounded the Japanese when they appeared in Commodore Perry’s fleet in the 1850s quickly became part of Japan’s own navy and merchant marine.
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Iron bridges became listed among the “famous places in Tokyo.” Young women who had formerly been employed spinning and weaving cotton and silk in small cottage industries were quickly mobilized for larger-scale production.

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Industrialization went hand-in-hand with political and cultural Westernization. Beginning in the mid-1880s, the emperor and empress, cultivated as symbols of a deep imperial tradition, were simultaneously presented as arch-exemplars of Western-style monarchical splendor. A succession of brightly colored “brodcade picture” woodblock prints (nishikie) presented the imperial couple as fashion plates for high couture. The emperor (who almost never appeared in photographs after the first few years of his reign) was invariably depicted in western-style military dress. Starting in 1886, his consort always appeared in public—and in popular illustrations—wearing the most up-to-date gowns.
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Japan's wealth and power :

By the 1880 No matter what international law might say, “the Strong eat up the Weak.” This perception became the rationale for building a military establishment capable of overseas missions, and for simultaneously promoting a potent, emperor-centered nationalistic ideology to buttress this.

Meanwhile this china in particular appeared to be the perfect negative example of this ruthless power struggle. In 1884, for example, a Japanese official published an account of recent travels in China that captured this sentiment in the harshest imaginable terms. Chinese as Sugita Teiichi wrote, were narrow-minded and obstinate and “do not know the great trends of the world.” As a consequence, China was about to become a battleground of Western economic imperialism, with Japan relegated to being a mere spectator. The choice came down to being “meat” or “a guest at the table”—and it was obvious what Japan’s choice should be.
As early as 1881, Fukuzawa Yukichi had employed an equally vivid metaphor to introduce much the same theme. In a famous essay titled “A Critique of the Times,” Fukuzawa lavished praise on Japan’s progress in mastering Western learning. Japan, he enthused, was already standing with the West “at the center of civilization”—while China, by contrast, had manifestly failed to attain such enlightenment.
We must not wait for neighboring countries to become civilized so that we can together promote Asia’s revival. Rather we should leave their ranks and join forces with the countries of the West. We don’t have to give China and Korea any special treatment just because they are neighboring countries. We should deal with them as Western people do. Those who have bad friends cannot avoid having a bad reputation. I reject the idea that we must continue to associate with bad friends in East Asia. [quoted in Oka Yoshitake’s excellent “Prologue” to Marlene Mayo, ed.,The Emergence of Imperial Japan]

In time, the Japanese coined the word tenshoku — literally “heaven’s work” or “divine calling”—as their own code word for this expansionist vision.
In a phrase that was often repeated six decades later in second world war the precepts declared that, for the Japanese fighting man, “Duty is weightier than a mountain, while death is lighter than a feather.”

When, in 1884, China sent troops to Korea to quell a pro-Japanese domestic uprising, only fear that Japan was not yet militarily prepared for war persuaded the Meiji leaders to work out a negotiated solution with China. Ten years later, when renewed turmoil in Korea again raised the prospect of Chinese intervention, the Japanese were stronger and not amenable to another negotiated solution. War with China came when the Japanese poured thousands of troops into Korea—in the name, as the propagandists would have it, of protecting Korea against intrigues by China. Neither Korea nor China nor Japan nor Asia would ever be the same again .

Closing remarks :

One country whose model of economic development and progress we perhaps need to study and draw from is Japan. Though not identical, but Japan and Bharat share some religio-cultural features. As we saw that Japan was one of the first Asian, non-Christian countries to become a global power in modern times.

The Japanese have created a thoroughly modern, highly technological, capitalist civilization whose religious foundations rest upon animistic and polytheistic traditions that adherents of the biblical regions normally assume to be discredited, primitive, and idolatrous–a remnant of a far earlier stage of religious “evolution.” From the Japanese perspective, such views are, of course, utterly without substance.

Jeff Baugh emphasizes that Christian nations have a Biblical context and even communist Russia has Christian roots which is why Marxism also has a Biblical context. In the case of Japan, what makes it different is

In general, traditional societies can be understood as more or less autonomous, religiously legitimated, extended kinship groups. In such groups, far greater emphasis is accorded to collective than to individual interests. … in spite of its modernization, Japan remains such a society.

Few, if any, developments in the postwar era possess as great a significance as the rise of Japan. Normally, Japan’s rise is discussed in economic or political terms.

In the Tokugawa period between 1638 and 1867, the Japanese society was a feudal one where hereditary military commanders called shoguns ruled over their respective fiefdoms and all were answerable to a nominal head, the emperor (Mikado). The Japanese society was stratified into classes consisting of warriors (samurai), traders, artisans, and farmers, with no mobility permitted between these social classes. This appears to be similar to Bharat’s varna system, labelled as ‘caste system’ by ignoramous.

Few, if any, developments in the postwar era possess as great a significance as the rise of Japan. Normally, Japan’s rise is discussed in economic or political terms. Its religious significance, especially for a nation such as the amreekunts whose cultural inheritance is so deeply rooted in biblical religion, is seldom discussed, much less understood. Japan is the world’s most successful nation with non-Christian roots right now from 19thad onwards. Even the Soviet Union has Christian roots. Marxist atheism is grounded in the very biblical tradition that Marxism negates. Moreover, the apparent conflict between the Western proponents of a biblically grounded attitude and a secular ethic takes on the appearance of a family quarrel when seen against the horizon of Japanese Shinto Buddhist fusion religion and culture. Far from being the antithesis of biblical region, the secular spirit that pervades so much of Western life is its unintended consequence. Wherever the biblical faith in a unique, exclusive, extramundane God penetrated, it was utterly destructive of indigenous gods and traditions. Sooner or later this polemical, desacralizing faith was bound to give birth to a consciousness that would not rest until all the gods without exception were dethroned. Under the circumstances, it is hardly surprising that a civilization as determined to preserve its own integrity as that Japan should marshal all its forces to resist both the believing and the secular manifestations of biblical religion.

Japan table.JPG

Panel B: Domestic and External Sources of Aggregate Supply and Demand Growth: Manufacturing and Mining , Gross Domestic Fixed Capital Formation , and Trade.

Percentage Contribution to Growth due to:Trade Openness and Trade Growth [c]
YearsMa to Output GrowthGDFCF to Effective

Demand Growth
YearsOpennessGrowth in Trade

Japan's extraordinary achievements have a meaning, both for Japan and the world, that transcends economic success. There is, for example, the question of whether Japan will become the leading military superpower in the twenty-first century. This writer has discussed that issue elsewhere. Here, we are interested in the cultural and religious rather than the possible military consequences of the Japanese “miracle.” One consequence is already apparent. The majority of Japanese have interpreted their postwar economic and technological achievements as confirming the superiority of their civilization over that of their trading partners and competitors. If ever the Japanese were amenable to conversion to a biblical religion, that time has passed. Back in 1980's, the prime minister’s office published a translation of a dialogue between Prime Minister Yasuhiro Nakasone and Professor Takeshi Umehara, one of the country’s leading Japanologists. In the course of the dialogue, the prime minister offered the following comment on Japanese religion:
The Japanese tend toward polytheism rather than monotheism. We believe in many gods and consider ourselves part of nature’s unending cycle. There is broad and general acceptance of the idea that a man’s fate is inseparable from that of every animal, tree, and blade of grass.

Side by side with this is the Indian BHARTIYA concept that each man is the whole of nature unto himself–as is evident in Zen philosophy as well.

The Japanese combine both of these concepts, oneness with nature and the individual as the whole of nature, within their being. It is my belief, however, that our sense of oneness with nature is indigenous and goes back to our Jomon roots. Japan’s ancestor worship is thus quite different from Christianity’s contract between man and his monotheistic god. In the process of honoring our forefathers, we create the harmony which is such an integral part of our life-style.

According to Umehara, Japan’s “Jomon roots” cover a period that preceded the introduction of agriculture and lasted almost 10,000 years, coming to an end about 300 bce. The prime minister thus asserts that Japan’s religious culture goes back to her earliest roots. This is not a heritage he or any other Japanese is likely to abandon. Nor do all Japanese regard the emperor’s postwar denial of his divinity as having really changed his “divine” status. In a document prepared for the Ninth International Congress for the History of Religions (1958), the Shinto Publications Committee declared,

Since the change was merely a change in outward treatment, it is only natural that the Shinto of the imperial House and Shrine Shinto should still be considered orthodox. It is one of the noteworthy peculiarities of Shinto as a religion that, since these types of Shinto are not bound by dogmas and scriptures but preserve their life in traditional form, [insofar] as there is no great impediment in the continuation of the religious rituals, the wounds inflicted by this change are not too deep.

The divinity of the emperor was never considered comparable to that of Jesus in Christianity or God in biblical Judaism. The emperor was thought of as ikigami, “a living human kami.” The term refers to outstanding servants of the nation who might be enshrined and worshipped while still alive. Imperial princes, national heroes, Shinto priests, and the emperor can all be reverenced as ikigami. To the Japanese, the emperor remains the supreme living kami. At present, his status is somewhat ambiguous. As Japan’s power continues to grow, there is every likelihood that the ambiguity will be clarified in favor of the traditional understanding of the emperor’s divine status.

Japanese religion a fusion of Shinto folk religion with core DHARMIC Buddhism has demonstrated its power to inspire a capitalist civilization capable of competing successfully with the West in almost every significant sphere of human activity. Seldom, if ever, has the monotheistic exclusivism of biblical religion been challenged as successfully as it has by modern Japan.
Prior to the onset of the Tokugawa period, Japan had around 300,000 Christians whose rebellion in the Shimbara peninsula was crushed with a heavy hand followed by closing down the country to outside contact including to Christian missionaries. Trade with Western nations was also banned but Japan maintained a close relationship with China and Korea.

Economic growth was steady and significant in this period. Agricultural production grew and manufacturing was also strengthened which led to a wealthy merchant/trader class and this led to the growth of many Japanese cities like Edo (Tokyo), Kyoto, and Osaka that showcased urban culture. These cities catered to the merchants/traders and the samurai rather than to the nobility (shoguns) and their vassals or warlords (daimyo). The urban culture saw the growth of the Kabuki theatre and Bunraku puppet theatre and woodblock printing.

Japan rising.JPG

This rare woodblock print reveals the acute sensitivity of the Japanese to the threat of Western “gunboat diplomacy” in Asia. The incident depicted is an attack on China by French warships in 1884.“Story from the Sino-French War” by Utagawa Kunisada III, 1884

Over time, when agricultural production did not fare as well as the mercantile and commercial activities, followed by famines, this caused peasant uprisings which further weakened the shogun and samurai class.

When unequal treaties were imposed by stronger nations on countries of East Asia including Japan, Japan had the choice of either radically restructuring her society or suffering defeat and humiliation by the predatory foreign powers.’

What led Japan onto the path of progress was its response in this situation. ‘As we knew, the foreign threat was met speedily and successfully by perhaps the most radical restructuring of any society the world has ever known.’

The Choshu and Satsuma clans which were anti-Tokugawa, combined forces and toppled the shogunate in 1867. This was came to be called the Meiji restoration. The emperor was the head of the state but the shoguns were the functioning head of the government. Owing to this division of power, the shogunate could be overthrown while the supreme sovereign could remain without being discredited. This allowed for introducing new policies which appeared to have the sanction of the supreme sovereign, considered by the citizens as a revered source from antiquity. Without this division of power, Japan would not have been able to survive the denigration of its indigenous institutions.

In spite of the loss of an active political role, the imperial institution gained overwhelming new importance. As a direct descendant of the sun goddess Amaterasu-omi-kami, the emperor symbolized national continuity, identity, and sovereignty at a time when foreigners threatened these values more profoundly than at any other time in Japan’s history. The emperor also symbolized national unity and the harmony between the rulers and the ruled.

The Charter Oath of 1868 pledged greater equality between classes, a much needed reform. But it is important to note that classes previously on the lower rung of society were not given special privileges aka ‘reservations’ that have been granted under Bharat’s Constitution to so-called lower castes. In Bharat, those privileges have only become further entrenched and acquired perpetuity in the decades following independence, with ever-increasing number of groups, including powerful land-owning classes, clamouring for the ‘backward’ label.

The slogans used in Japan were: ‘Rich Country, Strong Army’; ‘Civilization and Enlightenment’; and ‘Encourage Industry’. The imperial institution ensured historical and civilizational continuity. Japan’s transition could be achieved in a largely bloodless fashion in contrast to transformation in the Christian West such as the 17th century English revolution and the 18th century French revolution.

Japanese leaders determinedly resisted destruction of the historic continuity of their civilization.

By utilizing a seemingly conservative doctrine, that of the emperor’s divinity, to legitimate a radical social and political revolution, the elite was able to create a strong central government, abolish all estate distinctions, eliminate warrior privileges, open military service to commoners hitherto forbidden to possess arms, establish a system of universal public education, and facilitate the entry of members of the samurai class (in general the best-educated class) into the world of business and commerce.

The peace and stability and absence of Western interference of the Tokugawa period had helped pave the way for rapid modernization during the Meiji restoration period.

So by 1871, administrative reorganization was accomplished and the domains were replaced by the prefecture system, feudal class privileges were abolished, and the national army was formed. Two years later, universal conscription was introduced to strengthen the army. Agricultural tax reforms were done as was the unification of monetary and tax systems. The country was opened up to Western trade. A European style banking system was introduced in 1872. Although a modern education system was introduced, it emphasized traditional values of social harmony and samurai loyalty.

And Around 1880, some of the reforms began to be met with resistance and uprisings, which were quashed by the army. Responding to the pressure, the government in 1881 promised to provide a new Constitution by 1890. In 1885, a cabinet system was formed and in 1886, it began to work on the Constitution.

In 1889, the Meiji Constitution came into effect under which a bicameral Parliament called the Diet was formed. This Constitution remained until 1947. The unequal treaties were revised in 1894 as Japan gained respect in the eyes of the western world. Within a mere 32 years, Japan had carved out a space for itself as an industrialized, modern power.

However, during the imperial restoration period, Japan began to emulate Western expansionist policies and in 1894, it defeated the Chinese Quing Empire and a year later gained control of Taiwan and the Liaodong Peninsula, which it had to give up after a Russian intervention. Japan consolidated militarily as a response and defeated Russia in a battle in 1905.

Japan’s expansionist policies apart, through attaining economic progress, it had managed to do what no other non-Christian nation had achieved before during 18th-19th ad.

In the following 2 posts we will see the economic models of South Korea and Thailand.
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Dharma Dispatcher
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Nov 10, 2020
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Continued from https://defenceforumindia.com/threa...eiji-restoration-case-study-for-bharat.82968/

The rise of South Korea :

We now cover the spectacular story of South Korea’s journey to development from a colonized and later war-ravaged agrarian country in the 1940s and 1950s to a global economic power by 2000. In 2016, it became the eleventh largest economy in the world in terms of GDP, and is today one of the most technologically advanced nations.

Civilizational background :
The ancient traditions of Confucianism, Buddhism and Shamanism define Korea’s way of life and consciousness, and have sustained through modern times, although close ties with amreekunts have also resulted in growth of Christianity from 8% to 29% of the population between 1950 to 2010.
Right from 676 until its partition in 1945, Korea remained unified thus being one of the oldest continuously unified country. In this entire period, only three dynasties ruled over Korea providing extraordinary historical continuity. The second and third ruling dynasties did so for over five centuries each, thus being among the longest ruling dynasties in history.
Additionally, the two dynastic changes which took place also happened without major upheavals and institutions were carried over from one rule to the next. Such a remarkable historical continuity along with Confucianism’s looking-at-the-past approach has helped create a strong historical consciousness among the Koreans and been a boon to them for achieving progress by taking pride in their heritage.
Colonization by Japan, amreekunt military rule, and war.

After winning wars against China and Russia, Japan annexed Korea in 1910. The colonization invoked a sense of patriotism among the Koreans. Resisting having to assimilate Japanese culture, the Koreans carried out a peaceful movement for independence in 1919. The movement failed but the feelings of patriotism thrived and helped the Koreans build an armed struggle in Manchuria and set up a provisional government in Shanghai.

Unified Korea attained liberation from Japan in 1945. But liberation came with the partition of the country into North and South Korea, the former being taken over by the Soviet Union while South Korea was brought under amreekunts administration. A similar partition was witnessed in post-war germany.Both opposing Korean governments considered themselves to be the government of the whole of Korean Peninsula, and both saw the division as temporary.

Just as South Korea was initiating reforms, it faced an invasion from North Korea in 1950. United Nations force intervened to defend the South and later Chinese forces intervened on behalf of North Korea. The war lasted for three years and ravaged both countries, taking lives of millions. Fighting ended in 1953, with an armistice that approximately restored the original boundaries between North and South Korea.

On to the Economic Progress :

According to the book Korea’s path of Development in Retrospect, one way of looking at its path is decade wise:
  • 1950s: Post-war reconstruction
  • 1960s: Ground work for self-supporting economy
  • 1970s: Upgrading industrial structure and rural development
  • 1980s: Liberalizing and opening up the economy
  • 1990s: Globalization and structural adjustment
Under Japanese rule, land surveys and registration had been carried out which had created a modern system of property rights but there were no measures for protecting smaller farmers which led to disparity in land holdings. For correcting this, once Korea gained independence, it brought in a Farmland reform act in 1949 and revised it in 1950. Land was purchased from landlords at pre-set rates and sold to the farmers at below market rates.

Steps to establish a market economy had already started under the amreekunt military rule. Properties annexed by Japan were sold and private ownership of property was established. All Japanese-owned properties were converted to private assets by 1958. This greatly reduced income inequalities. This brought in a perception of equal opportunity which in turn made Koreans, irrespective of economic status, focus on education. This has paid huge dividends in the form of creating a highly trained workforce that quickly propelled Korea to its goals.

In 1948, Syngman Rhee, a Christian convert, was elected President with amreekunt backing. The invasion by North Korea in June 1950 was a major setback in which millions of lives were lost and 42–44% of manufacturing facilities and 40–60% of power-generating capacity were destroyed. Post-war development efforts had to focus on rebuilding infrastructure and rehabilitation and livelihood for its citizens. The only recourse was foreign aid most of which came from the amreekunts.

Rhee ruled for over a decade and tried to consolidate power through increased authoritarianism. This led to protests and he was ousted in 1960 after a student-led uprising. The Constitution was amended to bring in a bicameral system of Parliament. Rhee’s successor was a unstable coalition government led by Chang Myon, another Christian, that people soon lost trust in.
The fragile government was brought down in 1961 by a military coup led by Major General Park Chung-Hee, a Korean Buddhist, who was elected President in 1963. Park was trained by the Japanese Imperial Army and often expressed his admiration for Japan’s rapid modernization after the Meiji Restoration of 1867. When he took over, South Korea was not in good state.
In the 1960s, the government intervention in the banking and monetary sectors involved taking control of commercial banks as well as the central bank and sharing investment risk with private companies through provision of low-cost credit. Supply of ‘growth funds’ was prioritized over controlling prices and inflation. After 1965, interest rates were increased and tax reforms carried out. This encouraged savings and revenues. These were supplemented by funds from abroad. Foreign capital inflows came from many countries including West Germany.

Park, who was criticized by some as a ‘ruthless military dictator’ in the later years of his rule, put into action the first Five-Year Plan in 1962. The focus was industrialization. During the first and second Five-Year Plans, the government invested in new industries: chemicals, petrochemicals, steel, cement, fertilizers, ship building, and oil refineries.

It promoted exports but restricted imports to cut down on fiscal deficits. The export incentive mechanism put in place included exchange-rate adjustment, subsidizing exports, providing export credits and easing tariffs on interim inputs of products to be exported. The approach helped attain a steady and progressive growth in exports.

A lot of ideas were borrowed from Japan’s developmental model such as copying Japan’s Ministry of International Trade and Industry and the ‘keiretsu’ (set of companies with interlocking business relationships and shareholdings). Government-corporate cooperation on expanding South Korean exports helped lead to the growth of some South Korean companies into today’s giant Korean conglomerates, the ‘chaebols’.

Despite the interim nosedive due to paucity of funds, the success in the manufacturing sector helped guide growth. In 1970, steel mills were set up which began to produce steel in 1973 and South Korea soon became the fourth largest steel producing country. It witnessed unprecedented economic growth in the 1970s. At this time, it also faced two oil shocks. After the second oil shock of the 1979s, it responded by restructuring its economy.

Meanwhile, villages were given free cement and steel to build their own infrastructure. Villages that used these effectively were given more. This novel method propelled many villages to develop. Steel was also used for developing many steel-based industries like automobiles, ship-building, construction, and electronics.

In 1995, South Korea became a member of the world trade organisation. Hit by the foreign exchange crisis in 1997, it had to borrow from the international monetary fund. It then focused on restructuring its industrial policies and corporate management systems.
In 2001, its foreign reserves surged remarkably. It chose to pay off its imf loans before the deadline.
By now, South Korea had become a global power.
It had become a global leader in the semi-conductor industry. Through a revolution in its IT industry, it had also become an IT power. It also became an important entity in the cultural revolution through bringing Korean sensibilities into the world of music and drama.
Even today, South Korea spends a much higher proportion of its Gdp on R&d when compared with both the amreekunts and Japan.

After development, democratization :

Park who had taken over in 1961 was assassinated in 1979. General Choon Du-hwan usurped power through a coup. He declared military rule in May 1980. He was elected President in an indirect election in September 1980.
A new Constitution was brought in. This was the fifth one since 1948 and the country became the Fifth Republic. This Constitution maintained the Presidential system but allowed each President just one 7-year term. But the indirect election system remained.
On June 29, 1987, the government’s presidential nominee Roh Tae-woo gave in to the demands and announced the June 29 Declaration, which called for the holding of direct presidential elections and restoration of civil rights. In October 1987, a revised Constitution was approved by a national referendum and direct elections for a new president were held in December, bringing the Fifth Republic to a close.
Currently, South Korea is in its Sixth Republic phase. After Roh Tae-woo, Kim Young-Sam became the President in 1993 and remained until 1998, followed by Kim Dae-jung until 2003. The next two Presidents include Lee Myung-bak till 2013 and Park Geun-hye till 2017. Since 2017, President Moon jae-in has been in power.

In terms of economic development, South Korea achieved the impossible within a short span of 26 years (1961 to 1987), even though a few problems remain to this day such as the rural-urban divide, income inequalities, and pollution. But the overall picture is spectacular.

The authors of the book Korea’s path of Development in Retrospect state,

‘Korea is considered a unique case of an aid recipient having successfully turned into an advanced country in terms of full-scale economic transformation and democratization in the latter half of the 20th century. Korea’s rapid development has been dubbed ‘the Miracle on the Han River’.
Korea’s story is yet another example that there are multiple pathways to prosperity and modernisation, not just liberal, Western-style democracy. Often, what seems like authoritarianism to the outside world delivers the focus and stability required for rapid progress. The one indispensable ingredient is civilizationally-rooted, fiercely nationalist and pragmatic leaders. Equally noteworthy in South Korea’s case is that while contributing their all for national economic goals, citizens continued their struggle against autocratic excesses and full democratization became a reality after 1987.




Dharma Dispatcher
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East Asian Success Models: Thailand.

Researchers date the beginning of Indo-Thai cultural relations to 350 bce , i.e., more than 2000 years ago. BHARATA’s trade relations with East Asian countries including Cambodia, Laos, Vietnam, Thailand, Malaysia, and Indonesia had spread Hindu Dharma and Buddhism to this region. Thailand was influenced by Hindu and Buddhist influence of neighbouring Cambodia, Srivijaya, and Dwaravati. Buddhism is said to have entered the region during the rule of Ashoka Maurya.

The Thai concepts of divine kingship, royal ceremonies, and the idea that the king is a reincarnation of Bhagwan Vishnu are drawn from Hindu Dharma. Thailand’s national emblem, the Garuda is inspired by Hindu Dharma wherein Garuda is the vehicle of Bhagwan Vishnu. The Thai language is influenced by Pali and Sanskrit languages.

Thailand’s nation statehood began around 1300 when its first kingdom Sukhothai was formed. Sukhothai ‘s border city Chakangrao was conquered by the king of the Ayutthaya kingdom, King Borommaracha I in 1378, making this kingdom the dominant power in the region. In 1767, the kingdom fell to a 14-month Burmese siege but was taken back in 1782 under the leadership of General Phraya Taskin. The city of Thonburi was made the capital.

Ancestors to the current monarchs began to rule since 1782. Drawing from Hindu nomenclature, any king of this dynasty was called ‘Rama’ in keeping with the belief that a king is an incarnation of Vishnu. The first king of this dynasty, Rama I made Bangkok its capital and ruled until 1809. The Temple of the Emerald Buddha and the Grand Palace were built in his reign. The dynasty has continued ruling into the 21st century.

Thailand became a Constitutional monarchy in 1932. Since 1932, Thailand has experienced 19 military coups so far. In 1933, students and workers demonstrated on streets demanding a more democratic Constitution which led to the overthrowing of the existing military government albeit after shoot outs in which at least 100 people were killed.

A new interim Constitution was adopted in 1972 under Field Marshall Thanom Kittikachorn whereby the legislative assembly would be only through appointment and two thirds of its members would be from the military and the police.

There were coups in 1976 and 1977 after which General Kriengsak Chamanand became the Prime Minister (PM). A new Constitution was again adopted in 1978. In 1980, the increase in prices of oil and gas and electricity provoked demonstrations by workers and students and the PM resigned to be replaced by General Prem Tinsulanonda.

There was another coup in 1991 which led to the formation of the military government under General Suchinda Kraprayoon. National elections took place in 2000 wherein Thaksin Shinawatra was elected as the leader of the Thai Rak Thai party.

Another period of turbulence began in 2006. This culminated in a coup in 2014 and led to Prayut Chan-ocha, the current PM, coming to power. Elections held in 2019 strengthened the power of his Phalang Pracharat party. At the same time, the death of King Bhumibol Adulyadej led to the crowning of his son King Maha Vijiralongkorn. The monarchy has however been facing pro-democracy protests since February 2020.

Religion and Ethnic groups.

The predominant faith in Thailand is Theravada Buddhism and it is the official religion as well. There are around 93% Buddhists, 5% moosalme, and 1% Christians and a marginal percentage of Hindus, Sikhs, and other faiths. Ethnicity of the region is nearly 98% Thai people and 1.3% Burmese people.

Thailand’s path to progress :

Thailand is a resource-scarce country but its coastal ports were early economic centres that saw trade from Bharat, Persia, Arab countries, and China. The rise of the Ayutthaya kingdom was linked to commercial activities with China. With Bangkok becoming the capital in the 19th century, foreign trade especially with China became important.

Thailand was saved from becoming a European colony since the British and French agreed upon keeping it a neutral territory. It did face some pressures from western imperialism though which led to Rama IV in 1855 signing the Bowring Treaty with Britain that opened up several trade restrictions. British subjects were allowed to trade in all Thai ports and also granted extraterritoriality. Import duties were lowered to just 3%.

During the rule of Rama V–King Chulalongkorn from 1868 to 1910, infrastructure development initiatives were undertaken. Post and telegraph services were modernized and the railway network was constructed along with efforts at outward looking policies. A centralized and bureaucratic political structure was set up.

Rama VI contributed to enhancing the educational system. The first Thai university, the Chulalongkorn University was set up in 1917. In 1921, Rama VI issued a law that made primary education compulsory.

Globalization began in the 20th century. Rama VI was succeeded by his brother Rama VII who worked at improving foreign relations and international networking. Thailand began to export agricultural produce especially rice.

In 1942, the country’s central bank was established. Thailand became a member of the UN in 1946 and of the World Bank in 1949. The two factors that led to growth was investment in education in the 1930s and 1950s and policies that supported liberalization.

Under the reign of King Bhumibol Adulyadej, who was crowned n 1950, social projects were undertaken for poverty alleviation. Luang Phibulsongkram who was PM from 1948 to 1944 and 1948 to 1957 sought help from the amreekunts which provided economic assistance from 1955 t9 1959.

When Field Marshall Sarit Thanarat became the premier in 1957, he undertook policies for economic development and national security and formulated the first national economic development plan. In 1959, Thailand’s Board of Investment was created to promote investment in the private sector using local and foreign capital. The automobile industry was set up in 1962 as a part of the import substitution policy of the government.

Thailand’s primary initiative led to the establishment of the Association of South-East Asian Nations (ASEAN) in 1967. Thailand’s Stock Exchange came into being in 1974 under the supervision of the Ministry of Finance and the Bank of Thailand.

There were periods of setbacks too. From the 1970s to 1984, Thailand suffered many economic problems: fall in US investment, deficits, oil-price hikes, and inflation. Between 1981 and 1984, the Thai baht was devalued thrice under pressure from the IMF as a part of the government’s austerity measures.

Fiscal constraints affected the public sector but the private sector grew and the country transitioned from import substitution to export oriented industrialization. By 1987, the manufacturing sector overtook the agricultural sector starting the period of industry-led development. This improved foreign trade and this along with foreign direct investment mainly from Japan created an economic boom period from 1987 to 1996.

The International monetary fund World Economic Outlook database estimated the Thai Gdp average annual growth rate to be 9.5% for this period, peaking at 13.3% in 1988. In 1989, Thailand became the founding member of the Asia Pacific Economic Cooperation (APEC). In 1992, the Office of the Securities and Exchange Commission was established to monitor and supervise the operations of Thailand’s stock exchange. In 1995, Thailand joined the World Trade Organization as one of its founding members.

However, there was a current account deficit from 1987 to 1996 and this along with a shortage of capital led to a burgeoning foreign debt. The economic bubble caused a loss of confidence in the country’s financial institutions and 56 financial institutions had to be shut down in 1997. Once again, the Thai Baht had to be devalued which led to the 1997 East Asian crisis. This caused the Thai economy to nosedive with GDP growth falling to -0.14% from the previous year’s 5.52%. By 1999, the country had managed to recover and register a positive trade balance which was a result of foreign direct investment.

Under Thaksin Sinawatra who won the election in 2001, growth rates improved and the country was able to repay IMF’s debt in 2003. The economy performed well until 2006, but once again political instability caused by the military coup made GDP growth rates to slow down. This continued till 2010 which saw an improvement in growth rate, but these dipped again in the following years.

Thailand’s free-market economy benefits from relatively well-developed infrastructure. Exports of electronics, agricultural commodities, automobiles and parts, processed foods, and other goods account for about two-thirds of GDP. Gems and jewellery are the third most important exports after electric and electronic goods and automotives (including motorcycles and automotive parts). The service sector including tourism, banking, and finance also contributes to exports.

Thailand is considered a success story in social development. In 2015, its per capita Gross National Income was US$ 6610 and its Hdi ranking was 83. However, the Office of the National Economic and Social Development Council found that the percentage of people below the national poverty line had decreased from 65.26% in 1988 to 8.61% in 2016. It is also one of the countries with the lowest unemployment rates in the world.

Enabling factors.

With Buddhism as the state religion, the country has managed to curtail the onslaught of Abrahamic faiths so that focused nationalism has been able to prevail without dilution by opposing forces.
Along with civilizationally rooted DHARMIC monarchs, governance has been undertaken by politicians with military backgrounds. This has harboured a system where discipline and nationalism are emphasized. Western concepts of democracy have not been entertained.

At the same time, policies that aid development have been promoted. Factors that have enabled steady progress include efficient enforcement of laws to protect property and contractual rights. The judiciary is effective overall though courts are politicized and not completely corruption free. Cronyism, nepotism, and bribery are other problems.

The financial system was restructured and the stock exchange is open to foreign investors. Measures to bring in foreign investment are being undertaken. This includes abolishing regulations on minimum capital for foreign firms although foreign investment is capped for certain sectors.

However, the government size is large with the top individual tax rate of 35% and top Corporate tax rate of 20%. Property and value-added taxes are also imposed. The government spending averages at about 20% of Gdp.
Lessons for Bharat.

Thailand has a state religion which is Theravada Buddhism which has helped in keeping out anti-national forces and influences. Conversely, Bharat’s refusal to become a Hindu Rashtra after partition has led to a dilution of focus on national interest and civilizational identity.

Despite intermittent political instability, other than a few setbacks, the country has managed to maintain a steady growth rate. Drawing from Thailand’s success in social development, Bharat may also need to draw a few lessons regarding how poverty alleviation was achieved.


See - http://magazines.odisha.gov.in/Orissareview/2017/April/engpdf/Kalinga_and_Siam.pdf

See - https://www.heritage.org/index/country/thailand

See - https://www.nationsencyclopedia.com...Y-AND-ECONOMIC-DEVELOPMENT.html#ixzz6zjfldrwM


Dharma Dispatcher
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East Asian Success Models: The miraculous transformation of Hong Kong.

Similar to Singapore, Hong Kong too is mainly known for its entrepot activities. It is composed of 263 islands. The largest three islands are Hong Kong, Lamma and Chek Lap Kok. It has an area of 1095 sq km.
The location of Hong Kong made it an ideal port for Southeast China. Under the treaty of Nanking in 1842, China was forced to cede it to the British. Two further treaties, the Treaty of Kowloon in 1868 and the Treaty of New Territories in 1898, cemented this cession to the British. However, despite ceding Hong Kong to the British, the Chinese community in the island increased from 7500 in 1841 to 85,000 in 1859.
Like South Korea, Singapore, and Taiwan, Hong Kong too faced Japanese occupation during World War 2 which ended in 1945–the same year for all the four countries. It remained a British colony until 1997, after which it returned to China under a “one country, two systems” formula and is now officially called Hong Kong Special Administrative Region or Hong Kong.

Government Structure.

Since 1997, the Chief Executive is the head of Hong Kong SAR and assisted by the Executive Council which aids the Chief Executive in policy making and also plays an advisory role. The Executive Council has 16 principal officials and principal non-official members. All Executive Council members serve as long as the Chief Executive serves. The Chief Executive is elected from a pool of candidates approved by the Chinese government.

Administrative and executive functions are carried out by 13 policy bureaus and 56 departments. The Legislative Council is the law-making body. Half its members are directly elected through geographical constituencies and the other half are indirectly elected through interest-group based functional constituencies. In 2014, a massive occupy protest called the ‘Umbrella Revolution’ demanding universal suffrage broke out, but eventually failed. In 2019, a proposed law that would allow extraditions to China sparked violent protests. In March 2021, China announced an overhaul of Hong Kong’s electoral system whereby an election committee would vet candidates for the LC, thereby strengthening mainland control.
There are 18 District Councils with 458 members who serve four-year terms. There is a Judiciary which is independent from the executive and legislature, but all judges and judicial officers are appointed by the Chief Executive after recommendations by a Commission. The current Chief Executive since 2017 is Carrie Lam.

With over 7 million inhabitants, Hong Kong too has a high density of population like Singapore. Population density is 6300 people per sq km. Ethnic Chinese constitute 92% of its population. Most of these are Han Chinese. Filipino and Indonesian are around 2.5% and 2% of the population.

Chinese folk religion called Shenism, Confucianism, Taoism, Buddhism, and Christianity are major faiths in the country.

Followers of Buddhism or Taoism constitute around 28% of the total, Protestant Christians are close to 7% and Roman Catholics are over 5%. Muslims are over 4% of the total and Hindus are close to 1.5%. Many follow Confucianism irrespective of the religion or even if they have no religious preference.

The trajectory to economic prosperity.
Hong Kong’s success story is miraculous. Merely a decade after its four-year occupation until 1945, it had become one of the most prosperous regions of the Far East.

Like Singapore, Hong Kong had to follow a policy of export-oriented industrialization that led to its rapid growth. The two Asian tigers share the aspect of not having natural resources or potential for agriculture.
Mainland China was in the throes of instability after overthrowing the Manchu-led Qing imperial dynasty in 1911. China also faced a disruption in its trade due to the Great Depression in the West. These events in China, along with the Sino-Japanese war of 1937 and warring between the Chinese Nationalist Party (Kuomingtang) and the Chinese Communist Party also affected Hong Kong’s entrepot activities, as did the Korean war of 1951.

In need of revenue, China exported food and water at cheap rates to Hong Kong. This helped Hong Kong during its endeavour to expand its labour-intensive manufacturing industries.
Instability in mainland China also led to diverting of business towards Hong Kong along with movement of entrepreneurs with capital and know-how from the mainland. These entrepreneurs were beneficial for Hong Kong as they set up small and medium enterprises (SMEs), mostly textiles, garment, plastics, and electronic goods. These Sme performed exceedingly well and exports increased from 54% of Gdp in the 1960s to 64% in the 1970s.

Investment in the manufacturing sector was carried out in the 1950s and 1960s while investment in the tertiary sector comprising financial services, began in the next decade. By 1970, the country was known for its low-cost manufacturing of toys, clothes, and plastic goods among other items.
In the 1970s it also became known for its banking sector in the form of the Hongkong and Shanghai Bank, Citibank, and the Standard Chartered Bank, although it had yet to grow into an international banking centre which happened between 1970 and 1997.
By the 1980s, the contribution of the tertiary sector to GDP was higher than the manufacturing sector. By 1997, Hong Kong had transformed itself into a premier financial, business, and trade centre. As suggested in this Imf report, by 1996 it had integrated into the global service economy to become:
  • the world’s seventh largest trading entity and seventh largest stock market
  • the world’s fifth largest banking centre in terms of external financial transactions and fifth largest foreign exchange market in terms of average daily turnover
  • the world’s fourth leading source of foreign direct investment
  • the world’s busiest container port, and
  • one of the world’s most prosperous economies, with per capita Gdp of usd 24500 comparable to all but the wealthiest industrial countries.
Contributing factors
  1. A non-interventionist economic policy framework: The government provides legal and administrative back up and physical infrastructure while resource allocation is based on market signals and decided by the private sector. This enabled private firms to adapt to comparative advantage and maintain competitiveness.
The lesson is that allowing free market forces to function can overcome disadvantages relating to resource endowment. Another lesson is that embracing globalization leads to economic progress if accompanied by the right policies. The world economy continues to be integrated through trade, finance, technology, and information flows. Between 1961 and 1971, the Financial Secretary was Sir John Coppertwaite who supported free trade and carried out a policy of non-interference.
  1. Enabling environment with the help of appropriate macroeconomic policies: An enabling environment to manufacturing and the tertiary sectors was available through the public sector which catered to institutional factors such as an independent judiciary and impartial courts thus giving a sound legal system, property rights being protected, efficient administration, and free information flow. At the same time the regulatory framework was firm and provided for a rules based environment. The monetary, fiscal, and exchange polices in place ensured that contribution of the public sector to GDP did not exceed 20% so as to ensure that factor markets and goods markets remain flexible.
Hong Kong’s fiscal policies ensure a simple taxation system with low tax rates just enough to generate sufficient revenue for funding infrastructure. Fiscal policies favouring one industry over another were consciously avoided so as to not interfere with market-driven resource allocation. Monetary and exchange policies focus on maintaining a stable exchange rate between Hong Kong’s currency and US dollars. With no controls on capital flows, this implies that Hong Kong’s interest rates are determined by US monetary conditions. Despite the monetary authority having the ability to influence interbank liquidity and affect interest rates, these tools have sparingly been used. The primary focus has been to maintain the exchange rate. Hong Kong did face a banking crisis in the 1980s after which it carried out an overhaul of its financial regulatory framework with better disclosure requirements by banks and better auditing measures so as to ensure that internal risk management systems of banks work better.
The financial sector developed with the state playing a hands-off role by providing a proper regulatory framework while the private sector was allowed to determine which financial products to develop. The state created the Mortgage Corporation to bring interbank clearing under the monetary authority. The hands-off approach helped the smooth flow of the factors of production across sectors based on market conditions.
These policies helped strengthen the banking system which became profitable and highly capitalized.
  1. Competitiveness nurtured through the state’s policies: The study done by imf found that especially the tradable goods sector and the services sector had become highly competitive as a result of the macroeconomic policies. These sectors included wholesale and import/export trade, finance and business services, transport, and communications and showed a high level of efficiency of channelling resources to the most productive and efficient uses. As a result, they grew at close to double digit annual rates from the 1980s. Labour and other resources guided by market forces moved from manufacturing to these services sectors.
Non-tradable services (restaurants and hotels, domestic transport, real estate, retail trade) performed relatively less well, with the manufacturing and tradable services growing on average twice as fast as non-tradable services. Productivity growth in the tradable industries also rose much faster than in the case of non-tradable services. To combat this, the state attempted progressive deregulation for the non-traded goods sector to increase competition.

Currently, Hong Kong has a per capita GDP of close to usd 60,000 vis-a-vis Bharat’s per capita Gdp of nearly usd 12,000. Its ranking in ease of doing business is third only after New Zealand and Singapore. Although Bharat has risen 14 points in this ranking recently, it still ranks only at 63 in this index. Just like Singapore, a proper regulatory framework enforced properly, impartial courts, and a policy of free trade all contributed to its success. The Judiciary is independent but has no jurisdiction to interfere either in law making or in executive functions. Bharat must ensure a similar separation for providing a good enabling environment for progress.

See - https://www.gov.hk/en/about/govdirectory/govstructure.htm
See - https://www.indexmundi.com/hong_kong/demographics_profile.html
See - https://eh.net/encyclopedia/economic-history-of-hong-kong/
See - https://www.imf.org/external/pubs/nft/op152/chap1.htm
See - https://www.iedm.org/files/note1113_en.pdf


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East Asian success models: The ‘Taiwan Miracle’.

In the period between the 1630s and 1640s, the dutch launched several campaigns to gain control of Taiwan. They controlled Taiwan until 1661 when a Chinese-Japanese sea lord called Koxinga drove them off. Under Koxinga’s rule and that of his heirs until 1683, Chinese settlements continued to spread in Taiwan. His heirs were defeated by the Manchu Quing dynasty in 1683 and Taiwan remained a part of the Chinese empire until 1895 when it was ceded to Japan.

The Chinese Nationalist Party or Kuomintang took control of Taiwan in 1945. Current day Taiwan is composed of 95% of Han Chinese while aborigines or original inhabitants of Taiwan have dwindled, per one estimate, to just 400,000.

Belief System.

With a majority of Chinese Han people, the major belief system of Taiwan includes Confucianism, Buddhism, and Taoism.

One book describes religion in Taiwan as ‘Taiwanese religious experience begins with ancestor homage, is cultivated by Confucianism, coloured by Taoism, and modified by Buddhism. That is to say, religion in Taiwan is complex and multi-layered.’

Christians are estimated to be less than 3.9% of the total population. Some of its Presidents have been nominal Christians and include Sun-Yat Sen, Chiang kai-Shek (1943 to 1948), Chiang Ching-kuo (1972 to 1978), and Lee Teng-Hui (1984 to 1988). Ma Ying-jeou who was President from 2008 to 2016 had received Catholic baptism but did not identify with any religion.

Similarities with Japan and South Korea

While Japan was the first of the Asian countries to become a global power in the 19th century, Taiwan, like South Korea is another East Asian country that rapidly transformed in a span of five or six decades in the 20th century from a less developed country to a developed one, although there have been some road blocks in recent years.

Early land reform appears to be a common foundational factor that contributed to development in all three countries as does the emphasis on education.

Like South Korea, Taiwan too faced colonization by Japan under which an reasonable infrastructure had been created. Just like South Korea, multiple factors seem to have contributed to achieving success and making Taiwan one of the four Asian tigers along with Hong Kong, Singapore, and South Korea. Some of these include industrial planning by the government and bringing in a free market economy.

Factors contributing to Taiwan’s rapid development

Land Reforms:
Like South Korea, Taiwan’s government too carried out land reforms. For transferring land to the actual tillers, the landlords were given stocks in state-owned enterprises. Agricultural productivity increased and labour gradually freed from agriculture could be used for industrialization.

Education: Taiwan started off with free and compulsory education as early as 1950. Thus all children received minimum basic school education for at least six years. Subsequently, the free and compulsory education was extended to a nine-year duration for all children in 1968 despite uncertainty about affordability of the same. High enrolment rates even among girls at the very start in the 1950s indicate that this was one important factor in Taiwan’s rapid rise.

Infrastructure: Due to Japanese colonization, the infrastructure in the form of ports, roads, railroads, bridges, dams, electrification, public health, education and banking that Taiwan inherited was far superior to that of many other (Least Developed Countries). While Taiwanese resent Japan’s attempts at forced assimilation and their military occupation, they credit the occupiers for adopting a ‘flexible policy’ and for development of Taiwan’s economy. Albeit this was done to create Taiwan as a profitable base for Japan and with Japanese aspirations to incorporate Taiwan permanently into the Japanese empire, a shared Asian cultural heritage did make it easier for one to “accept” another. This stands in stark contrast to the brutal, exploitative colonial rule of European powers like Britain and France in Asian countries like Bharat, Vietnam etc.

After independence from Japan, Taiwan’s own government, in the 1950s and 1960s, worked to supplement and strengthen existing infrastructure using voluntary services of its soldiers by building roads and highways. In later years, telecom and logistics related infrastructure was emphasized.

Planned industrialization by the government: Starting out with import substitution, the government then began to promote exports in the 1960s and 1970s. During the import substitution phase, exchange rate manipulation and tariffs were used to protect domestic manufacturers. Export promotion involved setting up special zones for export oriented industries and providing special incentives to them.

High Savings and Investment: Rooted in the culture of Taiwanese is the high saving rate. This is said to have been one factor that helped in its development. Even at the beginning of its independent rule in the 1950s and 60s, savings were said to be high at around 30% to 40%.

The Economic Growth Process.
All the above factors contributed to Taiwan’s growth trajectory. In 1945, due to many disadvantages like an unfavourable land-to-population ratio, poor natural resources and lack of capital, Taiwan was not expected to do well but it defied the low expectations and attained miracle growth.

When the Chinese Nationalist Party set up the Republic of China with Taipei as the capital in 1945, Taiwan’s GDP was comparable to that of Congo and hyperinflation was another problem. Cnp had brought in some gold reserves and human capital. Reform policies initially focused on stabilizing Taiwan’s currency and controlling hyperinflation.

Land reforms were next and helped increase agricultural output. Enhancing education and bringing in industrialization was the next move. Import substitution quickly gave way for export promotion policies. Aid from the US was used to subsidize industries leading to export growth.

Taiwan started out with labour intensive industries in the 1960s and was a major exporter of shoes, toys, and umbrellas. From 1966, special Export Promotion Zones were established. In the 1970s, Taiwan improved infrastructure, increased electricity production, and began to also nurture heavy industries such as petrochemicals and steel. In 1980, the Hsinchu Science Park was set up to promote high-tech industries. The 1980s also witnessed institutional reforms in the form of trade liberalization and financial deregulation.

The government policy to move to capital-intensive and knowledge-based industries paid off and by the mid 1980s Taiwan became one of the largest producers of computers and computer peripherals. Unlike Japan and South Korea, Taiwan’s economy relies on small and medium sized companies hence information and communication technology products have primary importance in its economy rather than ship building and steel industries.

With the opening up of special economic zones in the 1980s by China, companies began to relocate supply chains to China and elsewhere, thus causing GDP growth of Taiwan to drop. ‘Taiwan’s focus on family-sized businesses and inability to produce global brands, such as South Korea’s chaebol Samsung and LG Electronics, stunted its competitiveness.’

Exclusion from many free-trade agreements decreased exports further. Thus, despite an educated work force, wage rates remained stagnant. Taiwan has been seeing periods of slowdown such as in the 1990s and been affected by the 1997 Asian financial crisis. It faced a recession in 2001 and also suffered the impact of the 2008 global recession after which recovery was slow.

Martial Law and Democracy.

The December 1948 declaration of martial law by Cnp prohibited new political parties and controlled social gatherings, free speech, and publications.

By the 1970s, an assertive middle class had come up in the country owing to economic progress and this class demanded more freedoms. The enforcement of martial law was slowly relaxed after the death of Chiang Kai-shek in 1975.

In 1986, the Democratic Progressive Party, the first major opposition party was formed and a year later, President Chiang Ching-Kuo proclaimed the lifting of the martial law. After his death in 1988, Lee Teng-hui became the President.

Taiwan gradually transitioned from one party rule, allowing ‘opposition political parties, a free press, free speech and universal suffrage.’

In 1996, Lee Teng-hui became the first directly elected president of Taiwan with 54% of the vote, beating three other candidates in a poll in which 95% of eligible voters took part.

Lee’s election was regarded by many as the beginning of a democratic Taiwan. Since then, it has held six elections and elected presidents from both the Nationalist party, or Kuomintang (KMT), and the Democratic Progressive Party.’

Taiwan’s first female President Tsai-Ing Wen was elected in 2016.


Although the pace of development has fallen after 2000, Taiwan’s story can still be considered remarkable. From the 1940s, when its Gdp was comparable to that of Congo, to a Gdp growth rate that often surpassed 10% for many years until the 1990s, Taiwan managed to achieve the ‘Taiwan Miracle’. In the decade of the 1990s, it had an average Gdp growth rate of 6.6%.

Also, similar to how the Korean and Japanese growth stories unfolded, Taiwan started out with an authoritarian regime and lived under military rule for decades, but transitioned to a full democracy after an increasingly prosperous middle-class asserted its demands for freedom.

See- https://eh.net/encyclopedia/the-economic-history-of-taiwan/
See- https://www.culturalsurvival.org/pu...Rd1W2POZg0REnoA3S2NCV3O46FvGMDgiS2W3OZa3KkBX0
See- https://books.google.co.in/books?id...+to+say,+religion+in+Taiwan+is+complex+and+mu
See- https://en.wikipedia.org/wiki/Christianity_in_Taiwan
See- https://rpds.princeton.edu/sites/rpds/files/media/clark_hsieh_school_labormarket.pdf
See- https://taiwantoday.tw/news.php?unit=12,29,33,45&post=21911
See- http://theunbrokenwindow.com/Development/Taiwan Case Study.pdf
See- https://econreview.berkeley.edu/analysis-of-taiwanese-economic-history-and-policies/

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