The Economic North–South Divide
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The Economic North–South Divide

Six Decades of Unequal Development

Kunibert Raffer and H. W. Singer

The Economic North–South Divide explores the structural roots of the debt crisis and considers the impact of debt management on North–South economic relations, exposing certain double standards that tilt global markets further against the South. Encouraged by recent successful opposition to neoliberalism, the authors finally propose ideas for a world where people seem to matter.
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Chapter 9: The Asian Tigers: What do they Prove?

Kunibert Raffer and H. W. Singer

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CHAPTER 9 4/7/01 1:35 pm Page 1 9. The Asian tigers: what do they prove? East Asia, in particular South Korea and Taiwan, has a curious history. In the 1950s, its economies were considered hopeless basket cases, particularly the two largest ‘tiger’ or ‘dragon’ countries of the ‘first generation’. During the 1980s, the region became the ‘Asian miracle’, hailed as a model of successful development, and wrongly used as a vindication of neoliberal ideology. The crash of 1997 brought about a very abrupt change of mainstream opinion. Suddenly, the World Bank (1999a) asserted - in contrast to its ‘Asian Miracle’ study - that East Asia had not followed the Washington Consensus. The economic systems and the very same policies that had led to the ‘economic miracle’ were now described as deplorably inefficient and flawed, mostly by the same people who had marvelled at the Asian success story shortly before, claiming it to be the result of applying their policy advice. This new interpretation makes one wonder how and why success could be achieved in the past. One may wonder even more about the quick change of opinion happening virtually overnight. Ignoring one’s own recent views actually appears to be bliss. Our analysis of economic policies before the crash focuses on the first generation of tigers, in particular on the two main ‘old tigers’, Korea and Taiwan, because interventionist policies were most pronounced there. They were the most advanced in 1997. Also the discussion on the Asian success has mostly...

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