Japan and Korea\'s Political Economy Background

Political Economy Background: Japan and Korea

In the period after the World War II, a large part of the world was restructured, especially the Pacific Asia (Borthwick, 1992). One of the most dramatic changes that took place in Asia was that several countries that had been colonized or semi-colonized emerged in the years following the War as independent, self-governing states, freed from colonial rule. In Southeast Asia, for example, between 1949 and 1959, Indonesia, Cambodia, Laos, Vietnam and Malaysia attained independence. Singapore gained the right to self-governance in 1949. However in this region, two countries managed not only self-governance but also diplomatic international relations. These two countries were Korea and Japan.

Though Japan had not only been physically destroyed by its enemies, but mentally and spiritually defeated by its surrender in the wake of the War, it managed to overcome this sense of defeat and started to build its way up. In the initial years after the war that is from 145 to 1952, it was subjected to the humiliating conditions of Occupation by the Allied Forces. For the first three years of Occupation, General MacArthur, as highest commander of the Occupation Forces had shut down all state financial institutions and corporations, with the exception of the Bank of Japan in order to make sure that all production of military material had ended. Factories were stripped of equipment to provide for reparations to the countries that had been victims of Japanese aggression. It were the bitter memories of the period of Occupation, led by the U.S., that the Japanese later found hard to forget. Though Japan became a U.S. ally later on during the Cold War, it cannot be stated without doubt that Japan faced a favorable, international environment in the postwar period and that this favorable external context was the key reason that it was able to industrialize so quickly and successfully. This is because, especially in the first few years after the War, Japan was rolling in the ashes of defeat, which was worsened by MacArthur's rule. It was only when the Occupation ended and U.S. began to provide economic help, that Japan could step out of a strategically disadvantaged position. In fact, as with China, Japan-Southeast Asian relations had been marked by bitter memories of the war and by continued suspicion of an assertive Japan. It was only later in the late 50s and then 60s that Japan was viewed as a source of trade, investment and aid to the region. Once this happened, Japan started to improve its relations in the realm of international politics. In the 1950s and 1960s, Japan's policy in Southeast Asia revolved around economic diplomacy, where relations were low-key and focused more on economics than politics. From the late 1970s, however, with the Americans withdrawing from Vietnam, the Japanese stepped into the limelight. In the wake of the Cold War, Japan was brought into a kind of strategic balance of power between China and the United States. It was only after this period that Japan actually gained a strategic advantage in international politics. Emerging from the ashes of defeat, Japan had by this time reconstructed itself into an economic power, making use of the favourable external environment that was now available through American support and assistance, and pre-war industrial knowledge and experience.