Rise of the Asian Welfare State September 22, 2012Posted by tkcollier in Economy & Business, Geopolitics, health, Lifestyle.
Tags: Asia, China, Geopolitics, Welfare
Although poorer countries still limit themselves to ad hoc welfare offerings, fitting the spending level to revenues one budget at a time, there is an increasing trend towards entitlements served by statutory institutions that will outlive the budgetary cycle. As these systems mature, welfare provision will be demand-led, not supply-driven; welfare will become integral to the state. Asia’s tigerish economies are turning marsupial, carrying their dependants along with them as they prowl.
Some of the national leaders who unleashed those tiger economies would be shocked and disturbed by the development. To them the welfare state was a Western aberration that would serve only to undermine thrift, industry and filial duty.
It seems that every country that can afford to build a welfare state will come under mounting pressure to do so. And much of Asia has hit the relevant level of prosperity (see chart 1). Indonesia is now almost as developed as America was in 1935 when it passed the landmark Social Security Act, according to figures compiled by the late Angus Maddison, an economic historian. China is already richer than Britain was in 1948, when it inaugurated the National Health Service (NHS) which, to judge by political ructions—and Olympic opening ceremonies—has become crucial to its sense of national identity.