Asian Little Dragons: in the ‘Midlife Crisis’? Challenges to societal policies after the neoliberal ‘miracle’

The success of industrialization in the so-called Four Little Dragons of East Asia (i.e. Hong Kong, Singapore, South Korea and Taiwan) was the model for the economic development of a large number of late-developed countries. In the good old days, the labour force in these societies was sufficient, young and cheap. People seemed to be united in pursuit of the common goal of survival and material well-being. After facilitating the industrial takeoff, governments shouldered relatively light pressures for social welfare and other societal demands. After three to four decades in the miracle age, the economic performance of these societies remains among those in the relatively high tier of the world. Meanwhile, the fluctuations in the world and regional economies create, uncover or sharpen long-hidden social contradictions. The composition and stratification of these societies are more complicated than before. Hence, more social concerns have to be addressed. In addition, the people’s expectation from their governments, especially in regard to sophisticated methods of promoting quality of life, has become significantly higher. The rising economic inequities and the related social problems have recently become important concerns for both advanced and developing countries. Nevertheless, the political and business elites around the world very seldom question the neoliberal agenda despite the economic crises that occur every so often. In different shapes, the Asian Little Dragons are categorized as neoliberal economies, just as highly open economies are also severely hurt by the crises. In every economic fluctuation, all people suffer, but the lower classes suffer most. This phenomenon raises the serious question about whether the current social and societal policies adequately protect the people against an increasingly risky global economic environment and an undermined quality of life. Long-term strategies and commitments by governments must be explored, developed and debated upon through more serious approaches. Concerned students of Asian public policy may be especially interested in two major themes in policy discourses, namely, maintaining the economic competitiveness of society amidst globalization and helping those negatively affected by such globalization (Lee and Cheng 2009). These two themes echo the recent academic debates on whether globalization diminishes the role of the state in providing social protection. According to the neoliberal view, which can be summarized as the ‘efficiency hypothesis’, the welfare state is regarded as uncompetitive because of the increasing competition in international goods (including services) markets and the ability of the capital holders to move money and production around the world in quest of higher rates of return (Garrett and Mitchell 2001, pp. 149–151). However, the competing ‘compensation hypothesis’ also argues that globalization would increase demands on governments to cushion market-generated inequality and insecurity by welfare state expansion, so as to maintain support for globalization