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Yoshihisa Ueda, Representative of IDB Office in Japan, wrote
an article on the economic policies of Latin American countries
for the "Seminar" section of the November 16, 1996 edition of
the Asahi Shimbun. Following is an English translation
of the article.
Looking at Asia from the Perspective of Latin America
The countries of Latin America, where democracy has been rapidly taking root, are pushing forward with policies of structural reforms in all aspects of their economies.
The Latin American debt crisis of the 1980s has left large
scars in relations with Japanese businesses and their confidence
on this region has not yet fully recovered. However, the experience
of the "lost decade," when the region suffered hyper-inflation
and a drop in production under authoritarian military dictatorships,
has also left large scars in the Latin American countries themselves.
As a result, the narrow-view nationalism or the more reasonable
illusion of populism has led to disappointments and has made
the lessons learned from this decisive. Due to these harsh lessons,
countries have successively begun working to change their economic
structures. The lessons learned from populism should be considered
to be a major change in thinking comparable to the ideological
collapse in the Soviet Union and Eastern Europe.
The philosophy behind the current economic policy of this
region is the traditional neoclassical economic policy called
the Washington Consensus which limits the role of the government
to the maximum extent and focuses on suppressing inflation and
other means to stabilize the macroeconomy, taking anti-poverty
measures, and making other social policies.
As opposed to this, there is a school of thought which gives high marks to the role of the government in the market economy and believes that it is coordination between the public and private sectors in microeconomic matters such as sectoral industrial policies that drives the economic development of a country. This stands in sharp contrast to the previous thinking and is the approach that has been adopted by Japan and the rest of Asia.
There is the expression "development dictator-ship,"
which is said to have brought about the economic development
in the Asian region. At the developing stage of an economy,
the idea goes, rather than having a democratic system, an authoritarian
system is more efficient in distributing resources and more
capable of executing far-reaching policies for the achievement
of development goals. When looking at Asia, countries with democratic
political systems have for a long time had to grapple with tremendous
domestic turmoil, while other countries, to differeing degrees,
have achieved rapid development despite having authoritarian
governments. Therefore, this is thought of as one technique
which has driven the "Asian miracle" and is considered
a superior part of the Asian methodology.
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