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PUBLIC: Re: When is a 'model' relevant? (Hong Kong)



     I don't know if any IP folk have seen the recently-published book by 
     Chris Patten (ex-Governor of HK), called East and West: China, Power 
     and the Future of Asia (Times Books, 1998).
     
     He points out that it was not Asian values but free trade and the 
     spread of technology that fueled the Asian boom.  He blames the 
     current economic crash on the failure of govts to modernise 
     institutions, such as banking in ways that would allow them to keep up 
     with the rapid growth of their economies.  
     
     It is interesting that he does not raise or attempt to answer the key 
     question: WHY DID THEY FAIL TO DO SO?!  (We know that it was NOT 
     because they lacked the necessary knowledge....).  Of course, the same 
     problem arises very often in companies.  IBM is a classic case of a 
     company which knew that there were problems ahead because of the PC 
     revolution, yet failed to act - and therefore went from its 
     highest-ever profit in one year (3bn$, if I recollect aright) to a 
     6bn$ loss the very next year (and the company has not really recovered 
     properly since then).
     
     In Patten's view, the future will not belong to Asia or any other 
     continent, but to societies which are open, adhere to the rule of law 
     and practice democracy.
     
     The question to us, from a policy point of view, is HOW open is "open" 
     (e.g in relation to foreign-born persons, money from abroad to Indian 
     organisations and companies, etc).
     
     Also, what are the socio-cultural factors which we need to nurture if 
     the rule of law is to be maintained and democracy practiced in a 
     meaningful sense....

Prabhu

______________________________ Reply Separator _________________________________
On Tue, 25 Aug 1998, Kush Khatri wrote:
     
> > I am not saying that we follow the HK model; but let us never rule 
> it >out without a very strong justification, particularly since that 
> model >has created huge amount of wealth for that nation.
> 
> You may see Honkong as a nation, for me it was a city-colony. And
> hence there is no comparison between a city-colony and a huge federal 
> state.
     
Some interesting facts: (approximate)
                        Hong Kong       India
     
Population              58 lakhs        9800 lakhs
        (so far you are right in dismissing this 'peanut' called HK)
     
GNP per capita          11,490          350     (in USD, 1990) 
GDP                     60 billion USD  255 billion USD
Value of manufacturing  11 billion USD   45 billion USD 
Exports                 29 billion USD   17 billion USD (1990) 
Imports                 82 billion USD   23 billion USD (1990)
     
These are all from World Development Report, 1992 (sorry, this is the one 
that I own and am usiing these statistics as illustrative; others, newer 
editions, I borrow from libraries whenver required) 
     
My point: these figures are not corrected for PPP, but even then you get 
the feeling, by now, I guess, that HK may be small in area, but in terms 
of the clout it carries in the economic world, it can stand up as a major 
nation anytime. Its merger with China is only incidental to the argument. 
When HK sneezes, the world catches a cold. When India sneezes, the world 
barely notices, since the wealth of India is so tiny for a nation its 
size, and most people are living at a subsistence level. In the real 
world, physical size DOES NOT matter. India is "huge" only in name; it is 
tiny in terms of its economic significance. 
     
Coming back: HK is not central to any argument that we are making, and 
this matter can be safely dropped w.l.o.g. (without loss of generality) if 
you like. The topic arose incidentally, and is basically irrelevant.
     
But please let us not dismiss those who are tens, even hundreds of times 
more successful than us. That is a tendency we as Indians will have to 
outgrow if we are to learn from the clearly visible and obvious 'lessons' 
lying all around us. Mancur Olson wrote a paper expressing dismay and 
surprise at the 'big bills lying on the sidewalk,' i.e., poor nations not 
willing to look around and see the lessons and gain from these lessons. 
Let us, on IP, not follow the footsteps of our ministers who are either 
dismissive of small East Asian states, or scared! (remember singapore 
airlines!). 
     
We have been truly humbled by all these tiny ants everywhere around us.
     
Let us become humble, open our eyes, and find out from these folks what is 
going on in their nation that makes them succeed. Neither should we 
belittle any person (ph.d/prof) who spends a lifetime studying these 
issues. We might learn something from these folks, you know!
     
SS


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