The Rise of Pacific Rim Economies

Japan• Occupied after WWII• General MacArthur was in charge of reforming and

rebuilding• Took 3 major steps• 1. Demilitarize Japan• Ex. Tried leaders as war criminals, shut down military

industries & armed forces• 2. Built a democratic gov’t• Ex. Created a new constitution that gave more power

to the people, and expanded Japanese civil rights, gave women the right to vote

• 3. Rebuilt Japanese economy• Ex. Broke up the zaibatsu industries and passed land

reform to give farmers land

Results of these Reforms• Stunning economic success!• Built its economy around foreign trade and producing

consumer goods to be exported• In the 1970s it focused on electronics and computer

technology • By 1968 it had the world’s 2nd largest economy (today it’s

3rd)• Factors that account for its success:• 1. High amount of savings which helped investment• 2. Emphasis on education provided human capital• 3. Cheap labor & strong work ethic• 4. Gov’t was supportive of business• 5. Good relations between management and labor• 6. Japan didn’t have to pay for defense—done by the US

Pacific Rim• Countries that border the Pacific Ocean and tried

to build their economies and supported the growth of democracies after World War II

• Can be divided into 2 groups:• Asian Tigers and Tiger Cub Economies

Asian Tigers• Hong Kong and Singapore—World-leading financial centers• Taiwan and South Korea—Leaders in manufacturing and

information technology• All 4• 1. followed Japanese economic model• 2. Provided ample education and training to create skilled workforce• 3. got aid from the US during the Cold War• 4. Have low labor costs • 5. Have access to Pacific shipping• 6. Focused on exports of consumer goods

• **All began the 1960s as poor & underdeveloped but today have developed into advanced and high-income economies

Tiger Cubs• Indonesia, Malaysia, Philippines, &Thailand• The four dominant countries of Southeast Asia.• They are all following the same export-driven

economic model as the Asian Tigers, but are growing more slowly than the Tigers did.

How does this image illustrate the success of the Asian Tigers?

Asian Financial Crisis• Bad recession from speculation and unregulated

growth that struck Asia in 1997 and reversed many years of economic progress. However, those Asian countries hurt by it have recovered.

The Asian Century• Experts predict that the 2000s will be an Asian

Century because Asia is going to become the dominant economic region of the world.

North Korea—The Exception• Communist dictatorship created after WWII with the

division of the country• First ruler-Kim Il Sung-followed the Soviet economic

model—command economy that emphasized heavy industry and military• As long as foreign aid was plentiful, the country was OK, but as aid

declined, poverty increased

• His son, Kim Jong Il, continued his father’s policies• Expanded military programs• 2006 tested a nuclear weapon

• His son, Kim Jong Un has continued the policies of his predecessors• Recently executed a number of officials and family members• Threatens US and its Neighbors with Nukes

Kim Il SungKim Jong Il Kim Jong

Un

What is the message of this political cartoon?