The Miracle: The Epic Story of Asia's Quest for Wealth

The Miracle takes a different approach to most literature on asian growth. It looks at the individuals involved and tries to describe their backgrounds, motivations and perspectives and motivates the growth as a function of those uniquie perspectives. This is not an academic work in its intent but it serves a very important role of exploring the "original conditions" of the people who helped start asias miraculous growth and the book draws the reader into the characters perspectives on what was required and the solutions to the problems that were pondered.The book explores most south east asian nations across the region. It starts with post world war japan and the start of Sony and the trajectory of the company from nothing to being a pioneer, it describes national MITI policy and the help and hinderance it could be. It goes into Korea and the story and vision of Park Chung Hee. The story of Singapore is discussed with the focus on Lee Kuan Yew. Hong Kong and its position is then discussed, discussing the rise or Li Ka-Shing and the eventual transfer of Hutchison. Taiwan is then discussed discussing Shih from Acer as well as some taiwanese historical background. China is explored and the journey of Deng Xiaoping is the center, the journey of liberalization within the party is focused on and the pragmatism of its leaders as well as the dogmatism of some of the older order. Indonesia is then moved onto with Suharto as the center, it is fairly flattering with focus on his use of the Berkeley team rather than the emergence of cronyism. The book then jumps back to Japan and Honda with his energy and vision and is used an example of how entrepreneurial Japan could be. India is then discussed, a little late to the party, Mannmohan Singh was the man who worked on fixing the situation along with Prime Minister Rao. Malaysia is described next with Mahathir's story being told. He is credited with avoiding the troughs of the asian crisis experience by pegging of the ringgit when presented with IMF bailout or his approach. We return to Korea over the asian crisis, with the most international precense at that time and the dismantlingh of Daewoo and the change in political sympathy and focus. We return to China through the eyes of the businessman and focus on Lenovo and its ascent. To conclude the author explores the story of one of india's largest IT sevices company, Wipro.Usually when one reads a book on asia and its growth of recent decades, the focus is on trying to decompose the factors that were at work for success. Economists tend to look for the principal components of growth to make both better predictions and perscriptions for other similar situations. The author takes the view that economies are at heart built from individuals and it is their story in which insight can be gleaned and thus focuses on the narrative rather than aggregate statistics. The result is very entertaining and a very interesting read. Often some characters who could be portrayed in a very poor light are contextualised so as to describe the good rather than bad that they helped foster, but this is only natural given the goal of the book- to describe asia through the eyes of the people making the growth happen. I recommend reading this as it describes the uniqueness of each asian country and how they saw themselves relative to others both locally as well as globally. Too often do people consider asian growth a singular phenomenon born of the same factors, this book helps dispel this, doing it entertainingly as well as insightfully.

Michael Schuman, we learn from the biographical note, has been a business journalist in Asia for more than ten years. What drove him to Asia was not, as other generations would surmise, the unfathomable mysteries of the East, the lure of antique civilizations or the attractiveness of exotic cultures. More prosaically, the author confesses that he "had read quite a bit about economic development as a university student, and [he] wanted to experience the process in real life and real time."So you would expect this book to have a grounding in development economics, and to offer an articulate explanation of Asia's rise to riches. Unfortunately it doesn't. The author remembers from his university years that there has been an active debate about the role of the state in economic development, and he uses this debate as a thread to his narrative. Is the secret of the "Asian model" to be found in the mixing of governmental action and market forces, as the experience of Japan and South Korea would suggest, or does a country reach its growth potential when the state gets out of the way, as allegedly happened in China and India?As the author acknowledges, this debate on the superiority of bureaucratic-led economic growth has been settled in the 1990s: in the words of the Wall Street Journal commenting on Japan's lost decade, "the bureaucrats lost". Or as Paul Krugman wrote at the outset of the Asian crisis, "When Asian economies delivered nothing but good news, it was possible to convince yourself that the alleged planners of those economies knew what they were doing. Now the truth is revealed: they don't have a clue."Michael Schuman, however, is not ready to endorse this conclusion to its full extent: his whole book rests on the testimonies of the alleged movers and shakers of miraculous Asia. However trivial their observations, like the platitudes enunciated by former autocrats or the commonsense observations of successful businessmen, they are taken as revealed truth, as if they offer privileged access to understanding the fate of Asian economies. It doesn't occur to our journalist that, as the philosopher said, the secrets of Egypt were also secrets for the Egyptians themselves. Or as the poet had it, "Since these mysteries are beyond us, let's pretend that we arranged them all the time."So Schuman offers a milder version of the answer to the bureaucrats vs. markets conundrum: "What worked just fine when Asia was poor no longer had the same positive impact once its economies advanced. Then the state's meddling with markets hindered, not helped, development." This is the argument put forward by Ezra Vogel in his sequel to Japan As Number One: "When the Japanese were catching up, those virtues and the structures they created served them well. But, now they have caught up and must adapt to a new stage of globalization, these structures have needed revision, which the Japanese have been slow in making."But it doesn't take much effort to realize the inconsistencies of this argument. Whether it applies to Japan or South Korea is a matter of debate (Schuman shows that the fortunes of Sony or Honda owes nothing to MITI's bureaucrats). However most Asian countries, beginning with China and India, are still in catch up mode. They haven't reached the stage where closeness to the technological frontier allows the state to take a backseat, and yet they have been remarkably efficient in adapting to the challenges of globalization.So in the end, Michael Schuman can only offer banalities as explanations to the miracle: "The story told in the preceding pages provides irrefutable proof that free trade, foreign investment, and free enterprise produce wealth and alleviate poverty on a scale that cannot be matched by any other mix of policies." The author's belief in his newfound mantra is so strong that he concludes: "If destitute Bangladesh or Ethiopia or Haiti set in place a similar policy framework as Taiwan or South Korea, it is almost certain that they, too, could spark their own Miracles." If only things were that simple...

I just finished reading 'The Miracle - The Epic Story of Asia's Quest for Wealth' by Michael Schuman.The book traces the rapid economic development of Asia's economies since the 1950s. It is rich on anecdotal stories of key protagonists ranging from presidents, dictators, bureaucrats and entrepreneurs covering Japan, Taiwan, Hong Kong, Korea, Singapore, Malaysia, Indonesia, China and India. It is a good comparative study of history, but I missed a more in depth analysis of the economics that drove Asia's success.All of Asia started their development process with similar degrees of poverty and a lack of substantial natural resources. Some used heavy government intervention such as in Korea and Indonesia, others let the free market rule such as Singapore and Hong Kong. While the approaches differed, what all had in common was the realization that to succeed, they had to develop industries that could survive and excel in the global market. Whether that meant nurturing domestic companies like in Japan and Korea or attracting foreign companies like in Singapore and Taiwan. The key was exposure to global competition and the pragmatic adoption of best practices. Governments who strayed from that formula suffered slower growth and often greater political instability as in the case of Indonesia and Malaysia.In fact, even though many Asian economies started their development under autocratic regimes, they understood the connection between economic and political stability. This is exactly what's driving China's economic policies today.In the end it's a book about the great success of globalization and free markets that has lifted hundreds of millions of people in Asia out of poverty within just one generation.

If I were a betting man placing a wager in 1960 on which of the two countries--Sierra Leone or Singapore--would achieve economic development, I would have chosen Sierra Leone. Afterall, in 1960, Sierra Leone was richer than Singapore: Sierra Leone was blessed with natural resources (diamonds), whereas Singapore had no natural resources to speak of. Forty years on, I would have lost and done so terribly. While Singapore has moved from Third World to First World in the space of two generations, Sierra Leone has consistently earned the dubious honour of being the worst place on earth to live (yes, worse than Afghanistan). What accounts for this vast difference in fortunes?Michael Schuman's book, The Miracle, provides an oft-overlooked part of the puzzle: leadership. He provides an account of East Asia's struggle for economic development through the eyes of the principal players in the region. They include Singapore's Lee Kuan Yew, South Korea's military dictator, park Chung Hee and Indonesia's Suharto. Using decades of reporting, analysis and (unprecedented) access to the leaders--and their heirs--Michael Schuman tells a very human story about how these leaders saw economic development as the only way to legitimise their often dictatorial regimes.The author dedicates a chapter to every individual Tiger country (Japan, South Korea, Taiwan, Singapore, Malaysia, Indonesia, and India). The story does not stop with political leaders. We hear about the power that Japan's Ministry of Trade and Industry had (under Shigeru Shahashi) had in promoting `chosen' industrial champions and financing them as they developed world-class products, and of Liu Chuanzhi, the founder of Lenovo, who struggled to build a thriving enterprise in a hostile post-Mao China.What became clear as I read the story of development in Asia was that there is no single `Asian' model of development: while Japan and South Korea favoured government intervention and promotion of local champions; Taiwan and India favoured private entrepreneurship; and Singapore favoured foreign investment. Also, contrary to prevailing development theory in the late 1960s, all the successful Asian economies adopted some form of market-friendly policies in order to achieve development.The Miracle is not an in-depth treatise on development economics; instead, it is a well-written story of flawed men and women--politicians, bureaucrats and entrepreneurs--who were passionate about putting their countries on the path to economic prosperity. Fortunately, for the world, they, by and large, succeeded in relieving the misery of their people.Many reasons have been adduced for the disparity of economic performance between post-Colonial East Asia and Africa. Some of the reasons have been self-serving (`Asian values'), while others have been laughable (there's something `wrong' with Africans). Michael Schuman's The Miracle posits another plausible reason for the disparity: good leadership. It is a message that's delivered with empathy and poignancy and one that I, as a Nigerian, take to heart; The Miracle deserves four stars.

This is a sweep through the Asian developmental states from the human interest angle - mainly stories and anecdotes. This approach makes it much more memorable than a theoretical analysis of the concept of a developmental state, focussing on dominant and mobile elites, strong bureaucracies, relative state autonomy, economic and political nationalism, the lack of entrenched economic interests at the beginning and weak civil society and human rights. However most of these areas are covered in the book. The standard journalistic technique of building a history around personalities (and using them to illustrate the analysis) is used.My only quibble would be that I found it a bit disorganised. For example I wanted to read the chapter about Indonesia first, but it is not arranged by country - there are chunks about Indonesia in various parts of the book but you have to do a bit of detective work with the index to find them. Part of the story is told, then you're off to Korea or Japan again, before returning 40 pages later. So for a second edition I would include a page summarising the locations of each country chunk, that would make it easier for those interested in a particular country.

There are numerous histories of South East Asia and countless biographies of their post-war strongmen. None of them explains the miracle as accessibly as this book. Written in the same fine spirit of journalism as Enron; The Smartest Guys in the Room or anything by Michael Lewis, it provides a fascinating and reliable foundation for understanding a big lump of recent economic history.