Applying rationality and intellectual muscle
There are a few broadly accepted truisms in the world today. One of them is that the world as we know it was sculpted by Western cultural reality, one tenet of which is rational thought. Rational decision-making is based on rationalism, the philosophy of using reason as the basis for one’s thoughts and actions. The evidence is overwhelming that leaders of Asian countries that overcame catastrophic economic circumstances were ruled by rationalism. They had the same colonial and or political structures that dominated their societies as African countries. However, the decisions they made when they emerged from colonial or other military-political domination to political emancipation and, in some cases, self-rule radically differ from the decisions that African leaders made under similar circumstances.
In 1863, the US Navy’s Commodore Matthew Perry, at the behest of the US government, and his two steamers and two sailing ships arrived in Tokyo Bay with an ultimatum: Japan must open its country to trade with the US or face annihilation from the ships’ cannons. Susquehanna, Mississippi, Plymouth, and Saratoga vessels were equipped with multiple cannons, including newer, more destructive Paixhans shell guns. When Perry arrived in Edo Bay (modern-day Tokyo), he had seventy-three cannons, and to demonstrate his strength, he fired blanks from them.
Japan had no navy and was defenseless against any naval threat. They called the ships the “Black Ships of evil.” It was menacing to Japanese leaders and people, and after months of negotiations and a second visit with a larger fleet comprised of eleven ships, they caved. The result is that two hundred and twenty years (beginning in the 1630s) of Japan’s isolation ended with the Treaty of Kanagawa in 1853. Japan closed its market in the first place because it perceived that Western culture and trade practices were threatening Japan’s sovereignty. Japan’s reaction to the humiliation of being forced to open its markets against its will led to the end of the Tokugawa Shogunate and the reinstating of Emperor Meiji, culminating in the period of economic and industrial reforms known as the Meiji era. Japan sought to copy Western technologies to establish industries that could compete with their Western counterparts. The growth derived from the Meiji era created a Japanese industrial and economic power that felt it could take on the US in WWII. That was Japan’s reaction to political-economic subjugation. Post WWII, they had another epiphany. In the wake of total military annihilation and the destruction of the country, culminating in the atomic bombing of Hiroshima and Nagasaki, the country faced having to rebuild the entire economic infrastructure and claw its way out of poverty.
The epiphany was realizing they could reverse the pattern of trade that the country had experienced in its interaction with Western traders. By manufacturing quality products competitively, they could sell them to Western countries. One after the other, they captured markets that had once been the preserve of domestic Western companies, from cameras, films, small electronics to televisions, cassette players, video players, and automobiles. Not only did they dominate Western markets, but subsequently the global market. Japan had help from General Douglas MacArthur during his time as viceroy of Japan post WWII. He established land reform and assisted Japanese manufacturers in improving their quality control process. One of the most helpful suggestions was making the world’s foremost total quality management practitioner available. W. Edwards Deming is best known for his profound contributions to Total Quality Management (TQM) and his role in the post-WWII economic recovery of Japan. He is considered the “father of the quality movement” and is highly regarded for his management theories, which emphasize continuous improvement and quality over short-term gains.
Like most people, the Japanese are very proud. Top management of Japanese companies, including CEOs, deliberately set aside their professional ranks and subordinated their personal feelings to listen and derive the best from Dr. Deming’s tutelage. Over time and through numerous (27 recorded) visits, Deming transformed Japan’s manufacturing and processing quality across all industries. This is rationalism at its finest. By agreeing to be taught by Deming, Japanese manufacturers and industries became the most proficient in the world within two decades.
The process was different in South Korea. The entire peninsula was colonized first by China and then by Japan. The Japanese occupation of South Korea, which lasted from 1910 to 1945, culminating in the defeat of Japan in WWII, was brutal, as was all Japanese occupation during the war. The experience is still reverberating through South Korea in this generation, eighty years after the end of Japan’s occupation. Post WWII, the peninsula became a major flashpoint of the Cold War. It started benignly with the United States and the Soviet Union (then allies) agreeing to divide the peninsula temporarily at the 38th parallel as they cleaned out Japanese forces from Korea after the war. Kim Il Sung was a Soviet client in the North, and Syngman Rhee was a US client in the South. However, the leader of the North wanted to preside over the entire peninsula and saw a chance when the United States withdrew its forces because it had determined that the region was not a defense sphere of the Western alliance. Kim Il Sung sent his army south and virtually overran the country. Prompting the return of the US forces under the banner of the United Nations, which was then a young, fledgling organization.
South Korean forces were pushed back to the South of the city of Busan, 330 miles from the Sea of Japan. They were literally about to get pushed into the sea when General MacArthur and his UN forces (mostly US forces) entered what had become the Korean War. The war intensified with the entrance of the UN, and General MacArthur engineered a recovery that led to North Korean forces getting pushed back to the Chinese border, triggering the entrance of about three hundred thousand Chinese troops into the fray. The total number of Chinese forces deployed in the Korean War was more than 1.3 million. After a stalemate in the war, the sides retreated to the dividing line of the 38th parallel, where the countries stand today. A live battle zone, manned by forces on both sides, that has the potential of devolving into a global conflagration at any time if either side makes a fatal error of judgement.
It was from this disaster that South Korea rebuilt itself. They had no heavy industries. The power plants supplying electricity to the peninsula and all major industries were in the Northern half. For good reasons, the Japanese development plan in the Korean peninsula had a decidedly Northern flavor. Raw materials were abundant in the North. Therefore, the reality of the country’s situation, which was one territory at the time, is that before the Korean War, the Korean Peninsula had a geographically based industrial disparity under Japanese colonial rule. The north, rich in resources, was developed for heavy industry, including mining, steel production, and manufacturing, while the south was primarily agricultural with some light industry. This division created an imbalance, with the North becoming the industrial hub and the South largely dependent on agriculture, as the Japanese prioritized resource exploitation and a “divide and rule” strategy.
At independence, on August 15th, 1948, Syngman Rhee was voted into office as the first president of South Korea. His time in office is very instructive for African countries and leaders because it is parallel to the experience of African countries since independence. His administration was racked by corruption and bad economic policies. Between 1946 and 1960, South Korea received financial assistance from the United States. The grants were used to support providing infrastructure for US troops stationed in South Korea, rebuilding the country after the war and to support economic initiatives.
Unfortunately for the country, Rhee’s administration was entirely corrupt and worse, it was also incompetent. The country was executing a classic Import Substitution Economic development strategy which was causing the country to lean towards insolvency because South Korea was not earning enough hard currency to support the country’s appetite for imports, including raw materials that were imported to support Import Substitution Industrialization (ISI) industries. South Korea also had the disadvantage of not having raw materials to export because it the country has very meagre natural raw material resources. Economic distress, widespread corruption, and Syngman Rhee’s harsh tactics led to massive student riots. The Masan incident triggered the fall of Rhee’s government. The succeeding government was overthrown by General Park Chung Hee a few months later in May of 1960. Annual per capita GDP of South Korea in 1958 was $80 and the total GDP was 2 billion for a population of about 20 million people. At this time, South Korea was as poor or poorer than many African countries. A condition that persisted until the advent of Park Chung Hee’s economic re-make in the early 1960s.
Park Chung Hee’s government made a strategic pivot from Import Substitution Industrialization to Export Oriented Industrialization. The economic development policies were described by the Koreans as guided capitalism. They used an industrial strategy managed by the Ministry of Trade and Industries to guide investments by businesses. The banks were nationalized to control and direct the allocation of resources for development. They created KOTRA, the Korean External Trade Organization. Perhaps the most crucial development initiatives of Park Chung Hee’s administration was Saemaul Undong (New Village Movement). It transformed the income of rural dwellers and integrated them into the flow of economic transformation of the country. The strategy worked. It laid the foundation for what is now widely known as the “Miracle on the Han River.” The process was intentional and intensive. The result is reflected in the economic progress of South Korea, which went from a per-capita income of $80.00 in 1958 to $33,121.37 in 2024 and a GDP of less than $2 billion in 1958 to $1.8 trillion in 2024. South Korea has evolved a top 20 in the world economy. It is noteworthy that South Korea borrowed a large part of its economic strategy from Japan’s experience. In building Phang Iron & Steel Company, South Korea relied on Nippon Steel for technical and management know-how and on the government of Japan for financing after every multilateral guarantee agency including the World Bank had turned down their request for financing because no one believed that South Korea would be successful in their steel development ambition. In retrospect, the South Koreans had the last laugh. Within ten years, Pohang became one of the top steel manufacturers in the world and for a few years the company was the number one steel producer in all the world. The Korean example demonstrates a transition from the experience of African countries as modelled by Syngman Rhee’s government and rationality and intellectual muscle as modelled by the government of Park Chung Hee….To Be continued in next month’s Unleash Africa Newsletter.
Reference:
- https://history.state.gov/milestones/1830-1860/opening-to-japan
- https://www.schoolperformanceinstitute.org/blog/2020/11/13/the-influence-of-w-edwards-deming-1900-1993#:~:text=Starting%20in%201950%20and%20in,power%20on%20the%20international%20stage
- https://countryeconomy.com/gdp/south-korea?year=1958
