THE SPONSORS OF STRUCTURAL ADJUSTMENT
like to hold up the success of the “Newly Industrialized
Countries” of South Korea, Taiwan, Singapore and
Hong Kong as models for the Caribbean. But to comply with
World Bank advice to “follow the NICs,” Caribbean nations
would have to break nearly every policy prescription the
Bank, the IMF and AID have tried to impose.
In Taiwan and South Korea, the most successful Asian
NICs, five factors were essential ingredients in the growth of
industry: I) food self-sufficiency; 2) relatively equitable
distribution of land; 3) close linkages between farming and
manufacturing; 4) strong state intervention; and 5) largescale
U.S. assistance. None of these are contemplated in the
strict external market-driven development strategy advocated
for the Caribbean by the multilateral lenders and
official U.S. agencies.
Strengthening agriculture was a government priority under
Japanese colonialism during the first half of this century, and
later in the years following World War II, in both Taiwan and
South Korea. Largely in order to serve Japan’s needs for
food, fiber and manufactured goods, the Japanese promoted
increased fann productivity and a modernized infrastructure.
In the Caribbean, agriculture, especially on small farms, has
been neglected for most of the twentieth century.
The distribution of rural land and income during the
period of industrializatidn in Taiwan and South Korea was
relatively broad and equitable. No plantation system, like
those in the Caribbean or the Philippines, was introduced.
The majority of farmers in both countries, although not
wealthy, were comparatively secure. This was largely the
result of extensive land reform carried out in the early l900s
and again in 1949-1951 in Taiwan, and in the 1940s and
1950s in Korea. These programs were much more farreaching
and viable than those being recommended by the
World Bank for the Caribbean, which could hardly be called
land reform. The proposals for the Caribbean would have the
effect of evicting many peasants and leaving those who
receive land without the infrastructure, credit or marketing
support needed to make it as private farmers.
Post-war South Korea has not abandoned agriculture
geared to local consumption, as structural adjustment plans
would have Caribbean countries do. During the process of
industrialization, South Korea increased its food production
for local use. Although Korea does import corn and wheat
today, it is largely self-sufficient in its major staple food, rice,
and has become more so as industrialization has progressed.
According to World Bank figures, food constituted 15% of
South Korea’s imports in 1965 and only 6% in 1986. Caribbean
resources, in contrast, have been drained to finance a
weighty food import bill.
Because they had access to land and government help in
increasing productivity and income, the small-scale farmers
of Taiwan and South Korea constituted a large domestic
market which helped industrialization get off the ground.
Rural savings also helped finance industrial development.
Most impoverished rural families in the Caribbean could not
afford to buy the goods produced in their countries’ export
manufacturing enclaves, even if those products were sold
locally.
In addition, the governments of both Taiwan and South
Korea have played an active role in promoting farming and
agro-industry as a basis for, and a complement to, manufacturing.
Government enterprises and state-sponsored investments
in agricultural research and extension, transportation,
communications, and hydroelectric power helped to integrate
agriculture and industry. Farmers produce fibers and
other raw materials for use in export industries; factories
produce fertilizer and other inputs for agriculture. As a result,
proceeds from agriculture and manufacturing have not been
cancelled out by the high cost of imported industrial parts and
materials and farm inputs, as has happened in much of the
Caribbean.
In Taiwan, post-war industrialization was subsidized by
a huge influx of U.S. assistance, averaging some $100
million yearly for three decades. The United States financed
an estimated 26% of the value of Taiwan’s capital formation
in the post-war years, in addition to substantially reducing the
country’s trade deficif No comparable level of sustained
support for locally owned industry or agriculture has been
offered by any foreign donor to independent nations in the
Caribbean.
Furthermore, during the early decades of industrialization,
Taiwanese and Korean manufacturers were aided and
protected by government subsidies, controls over the use of
foreign exchange, and restrictions on the import of goods
which might compete with those produced locally. The citystates
of Hong Kong and Singapore, which have experienced
similar success in export-oriented industrialization, have
also relied heavily on government planning, protection and
subsidies. These import substitution policies are the converse
of the open-market, “free-trade” development strategy
endorsed by those who today tell Caribbean nations to
follow the NICs.
Finally, rapid industrialization and export competitiveness
have been accompanied in most NICs by labor repression,
environmental degradation, spreading urban blight and
homelessness, and political turmoil. This is hardly what the
Caribbean people would choose for their development. As
the chief of Dominica’s economic planning division remarked,
“The United States is asking us to carry Out policies
under a democracy that really require a dictatorship. Capitalism
and democracy it’s a terrible mix.”
Menu
