Comparing High Performance Asian Economies

Comparing High Performance Asian Economies

THE EAST ASIAN TIGERS

Learning Objectives

Students will be able to:

•  List five general characteristics of success in the High Performance Asian Economies.

•  Compare and contrast the political and economic structures of the countries considered Asian tigers.

•  Describe how the institutional environment supported economic growth.

•  Analyze the degree of openness in the HPAE.

•  Explain the pros and cons of the idea that industrial policies mattered to East Asian success.

•  Evaluate the impact of export promotion policies and the debate over their applicability to other world regions.

•  Define total factor productivity and explain why economists use it to understand whether growth in the HPAE is similar to growth elsewhere.

•  Determine the possibilities of similar developments in other cultural and geographical regions.

Glossary

1.  Centrally Planned Economies communist countries where state or government make all economic decisions.

2.  Cultural Development greater equality for women and better race relations in multicultural societies.

3.  Demographic Development an increase in life expectancy and an overall fall in the death rate (including the infant mortality rate) combined with falling birth rates

4.  Developed Countries the most highly developed countries with the population experiencing high living standards

5.  Developing Countries countries that are at a lower stage of development.

6.  Economic Development an increase in a country's level of wealth. This could be accompanied by a decrease in the numbers employed in agriculture and an increase in manufacturing and services.Thisusually lead to greater access toand use of natural resources, resulting in more energy being used per head of the population.

7.  Exports goods to be traded outside of a country.

8.  Export-driven model developing goods for export to highly-industrialized nations.

9.  Free trade trade that occurs without government controls.

10.  Goods any kind of product.

11.  Gross Domestic Product (GDP) it is the total value of all finished goods and services produced by a country in a year per head of population (per capita)

12.  Gross National Product (GNP). It is the total value of all finished goods and services produces by a country in a year, per head of population (per capita) plus all net income earned by that country and its population from overseas sources.

13.  Imports goods brought into a country

14.  Import substitution raising tariffs to reduce the imports of consumer goods, allowing a country's own industries to develop and stabilize

15.  Least Developed Countries(LDC) countries with very low living standards, low life expectancy, high infant mortality rate and low levels of education.

16.  Newly Industrialized Countries(NIC) countries that have begun to develop through industrialization in the last 40-50 years. Some of these countries may be referredto as developed countries depending on their GDP, GNP and HDI.

17.  Newly industrialized country (NIC) a country that is in the stage between being a relatively poor, developing nation and a relatively rich, developed nation. A NIC is progressing from labor-intensive to high- technology-intensive industries.

18.  Oil-rich Countries these have a high GNP per capita, although wealthmay be concentrated in the hands of few people. Without oil, these countries would probably fall into the developing group.

19.  Political Development freedom means that more people have a greater say in who forms the government which will influence their lives.

20.  Protectionism a general term used to describe government actions designed to limit or eliminate imports that compete with domestically produced goods.

21.  Quota a quantitative restriction on imports.

22.  Recently Industrialized Countries(RIC) countries that have only just started to develop through industrialization.

23.  Social Development a range of changes affecting the quality of life of the population. Improvements in education, literacy, sanitation, infrastructure and increases in personal freed

24.  Tariff a tax on specific imports, which creates a trade barrier by protecting domestic firms and industries from foreign competition.

25.  Trade the exchange of goods, services, and information between nations or within a single nation.

26.  Tiger economy a term used to describe a national economy that experiences a period of unanticipated and rapid growth, where the general standard of living within that country also undergoes drastic changes that allow the population to enjoy a higher living standard.

Historical Background

Atiger economyis a term used to describe a national economy that experiences a period of unanticipated and rapid growth. As a result of that increase ineconomic growth, the general standard of living within that country also undergoes drastic changes that allow the population to enjoy a higher living standard. While the term was originally coined to describe a phenomenon that took place amount several nations in the Southeast Asia, a tiger economy has since been applied to any special economic zone that undergoes rapid economic growth anywhere around the world.

When first used, the tiger economy described an economic phenomenon that was occurring in the nations of Thailand, Taiwan, Singapore, Hong Kong, South Korea, and Japan. Those nations were enjoying a dramatic upswing in economy, since they enjoyed a profitable balance of trade. With investment capital flowing into the nations and an increase in export activity, those nations were in turn able to also increase import activity, allowing consumers to enjoy goods and services not produced within those nations. The end result was an emerging market economy that was strong, vibrant, and ultimately benefited just about everyone involved in the spurt of economic growth.

Since the latter part of the 20th century, a tiger economy has come to identify any national or group of national economies that experience this type of rapid growth and subsequent increase in the standard of living for their citizens. Often, nicknames are also applied to the specific grouping of nations that undergo this type of prosperity. For example, When the Republic of Ireland experienced this type of growth during the decade of the 1990’s, the nation was referred to as theCeltic Tiger. In the case of the tiger economy that developed in Japan, Taiwan and other nations in the southeastern area of Asia, they were collectively referred to as theEast Asian Tigers.

One of the potential pitfalls of a tiger economy is that the phenomenon may not be sustainable over the long term. Many of the nations that experienced this type of economic growth during the last twenty years of the 20th century also underwent economic downturns after the rapid prosperity leveled off after seven to ten years. In many cases, countries that experience a tiger economy manage to overcome the subsequent downturn and emerge with economies that is stable, although somewhat less spectacular than during the glory years. Typically, financial experts are able to determine what events and decisions led to undermining the rapid growth and take steps to minimize those factors in the future, a measure that increases the chances of the country’s economy remaining stable during subsequent shifts in the worldwide economy.

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