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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
______________________________ 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
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
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!
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