Once upon a time there was a small British colony named Hong Kong. Mother Nature did not like Hong Kong. She made Hong Kong a small rocky place with few resources and let it be flooded with millions of refugees. Its climate was hot and rainy, and it was often devastated by severe storms -- tropical as well as political. Although most people had neither jobs nor shelter, and often even no food, they worked very hard and dreamed of a better life.

Hong Kong had two Asian neighbors. Their names were India and the Philippines, and they were full of promise. Mother Nature loved these two countries and gave them many natural and human resources. Both countries had democratic politicians, eloquent lawyers, well-trained civil servants, and lots of economists. India seemed to have everything going for it. The Philippines was the richest country in Southeast Asia -- so rich that in the mid-1950s, thousands of Hong Kong Chinese women flocked to Manila to work as maids. To the World Bank, it appeared that these two countries were destined to prosperity, while Hong Kong's dream would never come true.

One day, the Grand Duke of Capitalism called. The three countries were asked to try on the glass slipper called "free-market development." The thick socks of socialism made it impossible for India to put her feet into the glass slipper, and the Philippines was not interested because Mrs. Marcos already had too many pairs of shoes. Hong Kong thought it was too poor to even try, but the Grand Duke persuaded her to put her foot into the glass slipper, and it fit perfectly. So Hong Kong went to the Palace of Capitalism, and she lived there happily ever after.

Since then, the fortunes of Hong Kong and its two neighbors reversed. Forty years later, Hong Kong became one of the richest places in the world with an output of goods and services of $22,000 per capita, many times higher than the $1,280 of India and the $2,600 of the Philippines. With one-tenth the population of the Philippines, Hong Kong exported 10 times more goods in 1996 than the Philippines and five times more than India. As a result of this change in economic status, more than 100,000 Filipino maids worked in Hong Kong during the later 1990s. Some were even hired by those Chinese women who used to work in Manila.

This may sound like a fairy tale, but it is the true story of the rise of modern Hong Kong. And roughly the same rags-to-riches Cinderella story occurred in South Korea, Singapore, and Taiwan as well.