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International Aspects of South Korea's “Developmental State”: The East Asian Perspective

Introduction

foreign policy south korean

The significance of the developmental state can be traced to the socioeconomic and political evolution of East Asian economies that experienced the economic boom and turned from the periphery of the world system into the main gates of foreign investment and platforms of political dialogues. If we look closely into the formation of political institutions that ensured the economic breakthrough, we may notice that in those economies the strong and centralized state that qualified and set the goals to achieve rapid economic growth and triggered the industrialization. Historic evolution and performance of the newly industrialized economies confirmed the efficiency of the authoritarian political institutions. Under such conditions, the Republic of Korea demonstrated the example of pursuing the development-oriented model, which contributed to its economic and political modernization and laid the foundations of the modern-day external political practices in the Republic of Korea.

South Korea, a middle-sized country at the crosspoint of Asian and Pacific directions of integrations, has more that middle ambitions as it positions itself as a balancer between the interests of global powers in the Asia-Pacific region. Such political course tends to be the completely new vision of the medium-sized power position on the global stage. In this regard, South Korean government considered the possibility of sharing the national model of the development-oriented state with the neighbor states and economies. Hence the concept of the developmental state export appeared. In this context, it is instructive to examine the given issue in the following dimensions.

On global dimension, the successful implementation of concepts of developmental state is becoming popular with the emerging economies in different continents.

On regional dimension, to carry out modernization as effective as South Korea did is a case in point for other economies of East Asia. Economic growth-oriented policies of developing countries are about to bring security and stability to the region. Moreover, the current position of South Korea on the regional scale invokes debates about its ability to remain an illustrative example of economic growth in the nearest future.

On national dimension, the examined issue appears to be of significant importance in terms of theoretical and practical grounds of external and internal policies of other countries, including Russia.

Scientific merit of the thesis is complied with the fundamental trends in international relations. Nowadays we witness the formation of the so-called “Asian age” which is centered around East Asian economies that shape complex strategies in order to promote their influence on the regional and the global scale. Their advancement in particular and the future of the Asian age in general will depend on the bilateral dimension: the willingness of donor countries and economies to share their experience with the emerging recipient countries and the possibilities of the latter to accept and implement those developmental practices.

The object matter of the study is the export of South Korean developmental state model while the subject appears to be the international aspects of the export and East Asian perspective.

Chronological framework of the research covers the period from the 1950s when Japan pioneered the implementation of the developmental state paradigm and entered a period of industrialization to the present day-policy of South Korea, which is widely recognized as a development-oriented state that is trying to project its experience on emerging states.

The aim of the study is to analyze the phenomenon of South Korean modernization as part of the developmental state paradigm and to trace its projection on the emerging states of East Asia. In order to achieve the aim, the following objectives were precised:

1. To specify the notion of the developmental state through the examination of the existing approaches and assumptions;

2. To justify the implementation of the developmental state concept toward East Asian economies;

3. To evaluate the international impact on the formation of South Korean model of the developmental state;

4. To outline the contribution of Asian values on the processes of South Korean modernization;

5. To explain the capabilities of South Korea on the regional scale to promote its soft power.

Research question of the present study may be considered as why the process of export of South Korean developmental state is being hindered in spite of the successful modernization and rich historical background.

The hypothesis of the research lies in the assumption that South Korea succeeded in ensuring its economic and political development and is a typical developmental state, however external political course pursued by the toppled president undermined the strategy of balancing and hindered the possibilities to project South Korean influence on the regional states and hence to export the development-oriented model.

Empirical research basis embrace various and diverse primary sources. Wide range of data primary sources were analyzed. Examined primary sources may be organized as follows:

1. Official documents include bilateral and multilateral agreements. The most illustrative example represent Joint Statement of the ASEAN-Republic of Korea Commemorative Summit (2009) which confirms the bilateral dialogue and emphasizes further cooperation. The mentioned source contributes to the explanation of South Korean soft power potential.

2. Socioeconomic statistics of East Asian economies, in particular, South Korean economic activities was referred to Trading Economics and the Observatory of Economic Complexity data (2017) as well as statistics conducted by Korea Creative Content Agency (KOCCA). Those indicators estimated the volumes of export and import of the two countries to show correlation between the period of economic boom and the current slowdown. The data justified that the concept of developmental state is applicable towards East Asian economies.

3. Information covered by mass media sources is wide and diverse. Those media sources include news and magazine agencies on English (Financial Times, BBC, The Washington Post, Stars and Stripes, The Japan Times, Business Korea, The Korea Herald, East Asia Forum, The Diplomat) and Korean (Dong-A Ilbo paper, Hanguk Ilbo paper, The Korea Times) languages.

4. Blog was also used as a primary source in this research paper. It is dedicated to the peculiarities of South Korean cultural wave (“hallyu”) and contributes to the promotion of South Korean soft power.

Theoretical basis of the study is regarded from the perspective of the theory of complex interdependence. Theory of complex interdependence appeared initially as one of the directions of the neoliberalism approach, however nowadays it is considered by some scholars as an independent theory whereas other reckon it in the transnationalism school.

This theoretical paradigm was defined by Robert Keohane and Joseph Nye in 1977. Rana W. Theory of Complex Interdependence: A Comparative Analysis of Realist and Neoliberal Thoughts // International Journal of Business and Social Science. 2015. Vol. 6, № 2. P. 290. According to the scholars, complex interdependence was perceived as a certain situation in the science of international affairs followed after the expansion of trade and financial ties. Under such conditions, state, society, international corporations and other actors of international relations are closely connected and communicate with each other through numerous channels. As a result of such communication, the actors are involved in the search of mutual interests and elaborate ways of resolving the arising conflicts with the help of negotiation, i.e. soft power tools. In that system of international relations the efficiency of the military power and the forces of coercion is decreasing.

Methodological basis of the research is constituted by a variety of scientific methods. The notion of the developmental state is regarded through the prism of the synchronous method. It clarifies the phenomenon of the developmental state in the world politics and matches it with different opinions on its debatable nature. Such method is useful in terms of highlighting the differences and the similarities but it cannot provide the justification for the choice of East Asian economies to fall within the paradigm of developmental state. The genetic historical method follows the scientific discoveries of the previous method but it emphasizes the economic progress East Asian countries had been experiencing during the certain historic period. Based on this assumption, scholars outlined the contribution East Asian economies had made to the theory of developmental state. Due to this reason, the state or the economy aimed at development and economic growth located in East Asia was widely recognized. One of the possible drawbacks of genetic historical method is the lack of attention toward the differences in the structure of political institutions and in the character of reforms conducted and in the degree of ideological component in those states. The comparative historical method is a principal one to specify those features instead. It emphasized that the idea of the developmental state was born in Japan and later turned into the Japanese flying geese model which was adopted by East Asian newly industrialized economies. However, the way Japanese norms were implemented differed from economy to economy which depended on the local realities and values rooted there. Comparative historical method outlined the role of Confucian values along with the specificity of the state mechanism in South Korea and differentiated them from those implemented in other first- and second-tier newly industrialized economies. Looking at the theoretical perspective, comparative historical method neglected the practical angle of South Korean policy. That deficiency was compensated by the systematic historical method which analyzed separate events within the framework of the integral political system. Such vision facilitated the understanding of the common pattern of South Korean external policy along with domestic political line.

The degree of exploration of the conducted research is based on the wide range of academic publications of widely recognized researchers and is separated into two parts: literature that is relevant to the object matter and to the subject of the research.

Academic publications related to the object, i.e. export of South Korean developmental state embrace such Russian and foreign scholars as A. Amsden Amsden A. Asia's Next Giant: South Korea and Late Industrialization. New York: Oxford University Press, 1989. 359 p., I. Tselichtchev & P. Debroux Tselichtchev I., Debroux P. Asia's Turning Point: An Introduction to Asia's Dynamic Economies at the Dawn of the New Century. 2009. Singapore: John Wiley & Sons. 392 p., X. Zhang Zhang X. Global Forces and Corporate Reforms in South Korea // International Political Science Review. 2011. Vol. 11. pp. 59-76., C. Rowley & J. Bae Rowley C., Bae J. Human Resources Management in South Korea // Managing Human Resources in Asia-Pasific. 2014. pp. 33-45., Y. Sohn Sohn Y. The Role of South Korea in the Making of a Regional Trade Architecture: Convening, Bridging, and designing FTA networks // East Asia Institute Middle Power Diplomacy Initiative. 2014. pp. 1-23., A. Fedorovsky Fedorovsky A. Deterioration of the Situation on the Korean Peninsula // Institute of World Economy and International Affairs Russian Academy of Science (IWEIA RAS). 2017. [Website]. URL: http://www.imemo.ru/index.php?page_id=502&id=3111&ret=640 (accessed date 17.04.2017), G. Toloraya Toloraya G. Vesna Peremen v Juzhnoy Koree. [The Spring of Change in South Korea] // Russian International Affairs Council (RIAC). 2017. [Website]. URL: http://russiancouncil.ru/analytics-and-comments/analytics/vesna-peremen-v-yuzhnoy-koree/ (accessed date 18.04.2017). Those scholars have outlined the peculiarities of South Korean model of state development. Their research emphasized the differences of South Korean case from the ones pursued by other newly industrialized economies. In their papers they indicated that it was the authoritarian state that ensured the successful modernization of the country that influenced the modern-day political stance: middle-sized country may balance the interests of the major powers in the region.

Literature that covers the international aspects of the developmental model export and East Asian perspective on that issue include the following highly regarded academics that contributed the most to the given issue. C. Johnson Johnson C. MITI and the Japanese Miracle: the Growth of Industrial Policy, 1925-1975 // Cornell, Cornell University Press. 1982. pp. 32-60., M. Woo-Cumings Woo-Cumings M. The Developmental State // Cornell, Cornell University Press. 1999. 335 p., K. Kiyoshi Kiyoshi K. “The Flying Geese” Model of Asian Economic Development: Origin, Theoretical Extensions, and Regional Policy Implications” // Journal of Asian Economics. 2000, Vol. 11, pp. 375-401., T. Mkandawire Mkandawire T. Thinking about Developmental States in Africa // Cambridge Journal of Economics. 2001. Vol. 25. pp. 289-313., J. Ravenhill Ravenhill J. The New East Asian Regionalism: a Political Domino Effect // Review of Political Economy. 2010. pp. 185-207., L. Routley Routley L. Developmental States: a Review of the Literature // Effective States and Inclusive Development: Working paper. 2012. Vol. 3. pp. 1-60., B. Yung Yung B. Road to Good Governance and Modernization in East Asia: `Asian Values' and/or Democracy? // Journal of Asian Public Policy. 2012. Vol. 11. pp. 266-276., S. Shigehisa Shigehisa K. The Asian Developmental Dtate and the Flying Geese Paradigm // United Nations Conference on Trade and Development: Discussion papers. 2013. Vol. 11. 30 p., S. Kasahara Kasahara S. The Asian Developmental State and the Flying Geese Paradigm // United Nations Conference on Trade and Development. 2013. [Website]. URL: http://repub.eur.nl/pub/51336/ (accessed date 03.05.2017), K. Asmolov Asmolov K. Aziatskie Tcennosti kak Doroga k Progressu. [Asian Values as a Way to Progress] // Russia in global affairs. 2017. Vol. 2. [Website]. URL: http://www.globalaffairs.ru/number/Aziatskie-tcennosti-kak-doroga-k-progressu-18664 (accessed date 08.05.2017). Mentioned academics managed to clarify the definition of the developmental state and correlated it with the realities of East Asian economies. Moreover, they also highlighted the external political direction of South Korean policy and evaluated the capacities of the current state to exercise soft power on the neighbor states and shape the regional economic and political agenda.

Revising the literature review, it should be mentioned that though the research question is highly debatable, it was thoroughly examined by respected academics. The issue was studied from various perspectives, from political, economic, social and cultural angles. The assumption that South Korea is a typical developmental state was confirmed by sound arguments, historical background while implications of being a developmental state were properly analyzed. However, there is a research gap which lies in outlining the strategies for modern-day South Korea to promote its development-oriented model to other countries considering the present-day political challenges and a lack of clear agenda on foreign policy which is essential for ensuring the successful international communications and hence for searching the potential adopters of South Korean model.

The academic novelty of the study embraces the comprehensive character of the research conducted. Whereas the existing publications were centered around particular questions mentioned in the research pattern, the present study compiles them in the integral picture.

First, by using the perspective of the theory of complex interdependence as an analytical research tool. All the previous researches brought descriptive characters.

Second, the contemporary of the research covered the period from 1950s to the present-day realities.

Third. A significant amount of sources for the first time introduced into scientific circulation including both primary and secondary sources.

The outlined objectives of the research justify its structure. In the first chapter the fundamental notions of “state” in general sense and of “developmental state” in particular will be precised and then the explanations of the applicability of developmental state concept toward the economies of East Asia will be specified. As far as the developmental state is a basic notion of this study, we will emphasize the perception of what the developmental state is through the positions on this contested issue made by respected academics. This paradigm was applied first to a wide variety of countries throughout the globe without any emphasis on a particular region. However, the outcomes of recent studies made by scholars indicated that through the indepth analysis of East Asian socioeconomic development it seems logical to classify East Asian economies as developmental states. In this context, examination of the key assumptions is core to the understanding of research objectives. All in all, this chapter laid the theoretical foundations of the research paper and determined further research pattern of the thesis.

In the second chapter the aspects of international dimension will be highlighted and the historic background and current economic and political development of East Asian countries will be compared. Within the comparative framework the phenomenon of the development of Japan, North Korea and China will be analyzed. More specifically, the emphasis will be made on the impact they made on the establishment of South Korean developmental state. The outcomes concerning the extent of international influence on South Korean model of modernization, the similarities and differences between East Asian and South Korean types of modernization will be outlined. The role of Asian and, in particular, Confucian values on the South Korean political tradition will be estimated. This chapter will continue the theoretical framework of the research, however the chapter itself will be focused on the particular features of South Korean developmental processes and will distinguish it from the modernization path of other East Asian economies.

Third chapter will cover the modern-day political practices of the Republic of Korea with the aim to analyze its potential as a state to figure out the capacity to export the development starategy to emerging states of East and Southeast Asia. The prospects of South Korean instruments to promote its soft power will be evaluated from the perspective of relations with China, Japan, North Korea, ASEAN states and such players in the region as the USA and Russia. At the same time, the analysis of South Korean cultural factor (hallyu) which gains more popularity on the global scale will be also examined in the context of South Korean soft power. Within this chapter South Korean mediating attempts towards regional security issues will be considered. In particular, the possibilities of resolving North Korean nuclear crisis and dealing with the THAAD agreement will be evaluated in this chapter. The focus will be made on the drawbacks of Park Geun-hye's presidentship that resulted to her impeachment and hence its consequences on modern political realities need to be specified. Further external political strategies with the goal to raise the potential of South Korean soft power will be suggested. The analysis of Southeast Asian direction of foreign policy, i.e. current state and prospects of South Korea-ASEAN relations, will be included. The possibility of exporting South Korean developmental model will be illustrated on the example of the energing economies of Vietnam and Myanmar. At the end of this chapter the overall prospects of the export of South Korean developmental model will be outlined.

1. South Korean “Developmental State”: Theoretical Perspective

1.1 Theoretical Framework of the Study: Key Categories, Approaches and Assumptions

1.2 "Developmental State": Main Analytical Discourses

The debates over the phenomenon of the developmental state have been recently invoked by a number of scholars who started to study this issue during the second half of the 20th century. Within the Western academic papers, scholars have mainly associated developmental states with the economic prosperity and growth rates. While others regarded them as institutions which are capable not only to achieve outstanding upturn but also to combine it with the legitimacy based on the increased standards of living. Routley L. Developmental States: a Review of the Literature // Effective States and Inclusive Development: Working paper. 2012. Vol. 3. P.7. Though the emphasis placed on the developmental state differed between academics, they all focused their research on three pillars: economic growth, raised living standards and legitimacy.

Nowadays the term serves to describe the economies of East and Southeast Asia that experienced fast economic growth through the interventionist policy. Previously, scholars referred this term to a bigger number of states that have not been widely recognized as developmental states and that have not come off a similar experience to East Asia. As time went by, scholars started to identify the concept of developmental state in response to the economic boom by compiling the patterns of Asian experience.

Later however, academics emphasized the East Asian Economic “miracle” and linked the breakthrough in economic and political development of East Asian economies, which was happening during the same second half of the previous century, to the developmental state concept. After that, several studies were dedicated to reconsideration of conditions that ensured the success of East Asian economies that turned them into developmental states. In general sense, the developmental state refers to the synthesis of very particular aspects of each East Asian case into an ideal type of governmental structure together with the local realities and cultural values concerned. Ibid

However, more specifically, the question of the developmental state was contributed by Chalmers Johnson and his analysis of 1982 dedicated to Japan's postwar enrichment. The scholar emphasized that Japanese remarkable industrial development was reached thanks to the role of its state's leadership in the modernization process. Shigehisa K. The Asian Developmental State and the Flying Geese Paradigm // United Nations Conference on Trade and Development: Discussion papers. 2013. Vol. 11. P.4. One of the most debatable issues in the developmental state concept focused on the role that state should play in country's development. Johnson though argued that the state was not solely responsible for Japan's economic achievements and it did not perform the duties of state in command economies. Johnson C. MITI and the Japanese Miracle: the Growth of Industrial Policy, 1925-1975 // Cornell, Cornell University Press. 1982. P.34. He faced severe criticism from the adherents of Anglo-American theory that presumed only two options of the state prosperity. According to them, Japanese government either followed the ideal pricing policy thus attracting more money to the state budget or implied socialist allocation of resources. The opponents did not presume the combination of the two components, strong state and market economy, in one policy.

Such a model of an authoritarian government pursuing market reforms was transferred to first- and second-tier NIEs, which adopted Japanese mistakes. Overinvestment that advanced domestic economies turned into a speculative bubble, which collapsed the economic structure. It was the Asian crisis that undermined the phenomenon of the developmental state in NIEs and hindered the achievements of East Asian “miracle”. However, NIEs had not halted their economic growth, the outcomes of the financial crisis they turned into the benefits and improved the mechanism of the developmental state that best suited their realities.

First-tier NIEs, South Korea, Taiwan, Singapore and Hong Kong, vary in their implementation of the canonic developmental state. While in South Korea the state was rather interventionist and limited its involvement into economy only after the crisis, in Taiwan relations between the state and the private business remained distant as political and military structures were brought from the mainland China while business elites were raised on the island. Apart from the countries mentioned, Singapore maintained economic openness and welcomed foreign direct investment (FDI). Amicable relations with the transnational corporations (TNCs) facilitated the economic progress and excluded Chinese business community, the rivals of Singapore companies on domestic market.

As far as the second-tier NIEs are concerned, they embrace Southeast Asian countries, Indonesia, Malaysia and Thailand, all of which faced another sort of problems when adapting the developmental state model. Those countries favorised the reliance on the extraction and production of resources. In comparison with the first-tier NIEs and Japan, the role of state was more modest. Shigehisa K. The Asian Developmental State and the Flying Geese Paradigm // United Nations Conference on Trade and Development: Discussion papers. 2013. Vol. 11. P. 6.

When we were analyzing the implementation of the developmental state concept, we noticed that local realities in each of the NIEs differ from each other though they are rooted in Confucian culture. Successful East Asian modernization occurred not only because of the technological changes but also due to adherence to the Confucian tradition.

Confucianism is a complex set of values, norms and rules that prescribe the everyday way of life. According to Confucianism, an ideal system is a vertically-aligned structure based on five types of relations in the society: director-subordinate, sovereign-nation, father-son, husband-wife, elder brother-younger brother and friends. Asmolov K. Aziatskie Tcennosti kak Doroga k Progressu. [Asian Values as a Way to Progress] // Russia in global affairs. 2017. Vol. 2. [Website]. URL: http://www.globalaffairs.ru/number/Aziatskie-tcennosti-kak-doroga-k-progressu-18664 (accessed date 08.05.2017) In all those relation patterns, we observe vertical structure. It is authoritarian way of organization that is able to bring harmony and order to the society. An equality in the society perceived as a chaos and anarchy that could bring disbalance to the system. That is why, government, which is responsible for the maintenance of stability and harmony, should be strong and centralized. Confucian society emphasizes consensus whereas opposition criticizes drawbacks of the system but it cannot change the whole system. The primary responsibility of the opposition is to observe and to reveal problems in the activities of governmental institutions so that the government may correct them and improve its political line. From the waves of East Asian modernization, we observe that such an approach turned out to be efficient as it helped the political elites to focus on internal problem-solving.

Such forced interaction within the group shapes a particular set of values, which prescribes people's behavior for all occasions. In that system, the role of group is extremely important, in other words, collectivism dominates over individualism. Moreover, apart from European democracies, Confucian political culture eliminates such elements of liberalism as individual human rights, individual freedoms, political pluralism and local autonomy. Such phenomenon exists not because Asian political systems are all tyrannies and Asian governors' rule is based on violence. Norms that prevail in the society replaced the Western notion of “equality” with the typical Asian “harmony”. It explains the specificity of authoritarian way of modernization. In other words, East Asian society cannot ensure its well-functioning otherwise than through strict regulation of all spheres of society.

One of the main principles of Confucian political culture remains meritocracy, which is based on the assumption that high governmental posts may be occupied by intelligent and educated men rather than nobles. Education played significant role in the Confucian society and became a way to climb the career ladder. Besides career promotion prospects, education was aimed at shaping the human conscience in order to set the individual on the right path through a lens of certain political doctrine. Ibid We can add to that statement that political will was controlled and the political thought itself was formed in accordance with the mentality patterns. As we look back to history, we notice that a typical scientist in Confucian times interpreted and analyzed ancient texts rather than created a new vision as Europeans did. From those times, the notion “to think right” appeared as it was tied to the Confucian tradition, which did not tolerate any deviation. Since then, the state functioning was based on the will of governors, men of merit, whose style was regarded as the truthful one any deviation attempts were punished by the means of repressions. It is logical to assume that there are no any correlation with the European system of “equality of all before the law”.

However, there is an example of a discrepancy between the tradition and the actual state of things. Despite the fact that in Confucian culture moral convictions dominated over financial ones in theory, emphasis on career prospects and cases of corruption were the exception from that postulate. While in Western countries, it was condemned, in East Asia it was flourishing. Though there were severe punishments for officials caught in bribes, a tradition existed that prescribed some bonuses in order to influence the actions of an official. It seems logical to conclude that corruption is rooted in Confucian culture that is why, fighting with it in European way does not lead to its complete elimination.

All in all, Confucian values tend to be one of the main reasons of East Asian rapid progress from the periphery of the global economy to the centers of the world trade and investment. Those values that embrace authoritarian power, hierarchical structure, dominance of group over individual, adherence to tradition, emphasis on moral qualities rather than on tangible assets and political abstention of population contributed to East Asian specificity of modernization which varied from one economy to another. Thus, typical Asian values compiled together with the speed of technological innovations presented the phenomenon of developmental state that played a key role modernization process in East Asia.

All in all, those norms that generate the paradigm of developmental state were shaped around the political will of elites added to the cultural norms special institutions supported by the ideology of a strong state that is capable to cope with the arising difficulties in order to achieve the developmental goals and outperform itself. When analyzing the issue of East Asian developmental state, we considered various perceptions of this notion understood by scholars adherent to different schools. It is crucially important to identify the concept of developmental state and its historical variations in order to use it correctly in further research. We established that this term may be applied when describing the achievements of East Asian economies that combined the transition to the market economy with the growth of private business sector and reforms of political institutions. It is possible to conclude by saying that each East Asian economy present a unique case of the implementation of the developmental model framework mixed with Confucian tradition, local norms and geographical conditions.

2. South Korean developmental model: the international dimension

2.1 International factors behind South Korean developmental paradigm

Japanese factor

Some Asian economies headed the ranks of the producers in most spheres of manufacturing along with South Korea or even decades earlier. When South Korea achieved high growth rates in the late 1980s and during 1990s, Japan had already experienced its “economic miracle” which lasted 18 years. It was 1955 when Japan entered a period of rapid growth which was marked by heavy industrialization and development of industries that became Japanese frontrunners. Such sectors comprise a wide range of industries including steel, shipbuilding, machinery, chemical and petrochemical and automotive, electronics and precision machinery sectors later in 1960. Tselichtchev I., Debroux P. Asia's Turning Point: An Introduction to Asia's Dynamic Economies at the Dawn of the New Century. 2009. Singapore: John Wiley & Sons. P. 329.

Japan pioneered the implementation of the “development state” model features by delegating the key role to a special institution which was called the Ministry of Trade and Industry. This body decided on the industrial and macroeconomic policy and provided funding for crucial industries in the country. It was organized through the established from the early 1950s Financial Loans and Investment Program filled with the budget money. Through Trust Fund Bureau the Program promoted financing to the activity of public sector companies, small and medium enterprises, to the development of infrastructure and natural resources base. Strict government regulation was the most effective tool that contributed to Japanese post-war recovery in the second half of 1940s and later after the oil shocks in 1970s. In the second half of the 1980s, Japan rocketed again and showed increased productivity and quality rates. Japanese yen was appreciated in 1985 and it boosted the export of domestic firms as there were favorable conditions to create their own niche on the world market. Trade deficit with the US, whose economy was suffering from stagnated economic development, reached 46 billion US dollars in 1985 and, at the same time, the reduced cost of goods and services on the global market pushed Japanese businessmen to find more opportunities to occupy the significant market share. Ibid. P. 331.It reflected the behavior of Japanese people towards their neighbors, emerging Asian countries, which shaped into managing the processes of regionalism. The leading role of Japan in the region outlined the importance of Flying Geese Model which was first described by Kaname Akamatsu during 1930s and by Kiyoshi Kajima in the 1970s.

Kaname Akamatsu initially observed the relations between Western countries, which were industrially developed, and Japan, which was a developing Asian country. His area of interest was examination of how emerging countries like Japan could catch up with the advanced ones through enhancing their cooperation. Kasahara S. The Asian Developmental State and the Flying Geese Paradigm // United Nations Conference on Trade and Development. 2013. [Website]. URL: http://repub.eur.nl/pub/51336/ (accessed date 03.05.2017) It should be said that Akamatsu first mentioned term “flying geese” in 1935. It appeared from a representation of three activities of a particular industrial sector: import, domestic production and export. Ibid. They may go up and down by increasing the volume of production and reducing it thus making a V-shape or a skein. The three curves represent the level of competitiveness of a sector in one country with that in another one. In order to be competitive, all three directions should present. If there is a situation when a country produces nothing, imported goods and services fill the market and its competitive advantage tends to zero level. Kiyoshi Kajima developed its theory later than Akamatsu from the perspective of the transnational corporations. He assumed that companies rather prefer to locate their production overseas in industrialized or developing countries, which eventually may lead to import from those countries. Kiyoshi K. “The Flying Geese” Model of Asian Economic Development: Origin, Theoretical Extensions, and Regional Policy Implications” // Journal of Asian Economics. 2000, Vol. 11, P. 380. This scheme is based on the interdependence between the “leader” state and its followers at different sides of the skein. If Japan is on the top, then it is considered to be the primary exporter to less industrialized and emerging countries in Asia-Pacific. At 1980s, economies like South Korea, Taiwan, Hong Kong and Singapore had just entered the period of economic growth and they were looking for the most innovative technologies to adopt to make it more productive. There is no doubt, that they had a clear example of “Japan as number one” which intended to transfer not only its production but also its technology and business practices to less industrialized countries. “Learn from Japan” was not just a slogan but a way to ensure economic progress and to raise living standards. Japanese model proved its efficiency as it contributed to Japan's political and economic sustainability due to the right implementation of mechanisms and resources and became an alternative to Western way of development. Historically, Japan outperformed Korea in both economic and political indicators at the moment of their metropole-colony relations. However, after Japan was defeated in the Second World War, the situation had changed dramatically. Korea became independent when Japan was under the control of the Allied Forces and, especially, the United States. Under such conditions, Japanese government through several reforms managed to guarantee its postwar reconstruction. War-torn Korea was a source of profit for Japan again by being a market for Japanese goods and services delivered through the United Nations forces. Once again, Korea experienced a Japanese influence on the main sectors of its society.