Asian Tigers: South Korea, Taiwan, Hong Kong and Singapore - Case Study Example

Asian Tigers Introduction The term Asian Tigers is used to refer to four Asian nations ly South Korea, Taiwan, Hong Kong and Singapore. The four are normally referred to as the Asian Dragons or the Four Asian Tigers due to their exceedingly developed economies. They were the first newly industrialized regions which were noted for maintaining a miraculously and exceptionally rapid industrialization and high growth rates. All these happened between 1960s and 1990s such that all the four nations had graduated into high income economies and advanced economies by the 21st century. The growth of the ' Asian Tigers' in the 1960's In the 1960s, the Asian tigers were very poor thus labor was cheap, and in abundance. They then made educational reforms and coupled this with the cheap labor to establish productive work forces. In order to improve productivity, they focused on improving education at all levels with more emphasis on elementary education and compulsory high school education. College and university system was also improved by setting aside some money for the same. For economic development, they pursued an export driven model whereby they focused on the manufacture of goods for export to nations that are highly industrialized. They discouraged domestic consumption through government policies such as high tariffs. The economic growth of the Asian Tigers has been termed as the East Asian Miracle because of the supernatural increase of four economics. East Asia which comprises Korea, Taiwan, Singapore and Hong Kong has been the fastest growing are in the world. They have been termed as the models for achievement for other rising economies. There have been several factors which led to the success of the East Asian countries. These include the macroeconomic discipline, their outward orientation, high investment and saving rates and public policies which were good. Although these may vary from region to region, the experience of east Asia, supported by recent research on growth, has convinced many observers that an on looking development strategy, particularly a dynamic export sector, is a conducive growth. The other factor that boosts their trade was greater openness which is conducive to growth and thus they embrace the policies that promote openness. They also used non-tariff and high tariff barriers to promote industrialization. Between 1965 and 1993, real gap in the East Asian economies grew at an annual average rate of nearly 9 percent more than twice as first as their Latin American counterparts. They all had common characteristics which include focusing on exporting to rich and industriali0sed nations. They also maintained a double increment for years. They were each non democratic and relative to authoritative systems for years. They had high tariff on imports and less valued currencies, and each held bond bonding of U.S. at a high level. Their savings rate was high. Current Growth The Asian Tigers are no longer growing so rapidly now. This is due to the Asian financial crisis that burst in 1997. Economies of unrestricted flow was opened which led to the erosion of their financial successes. This led to a volatile foreign investment which was dangerous. Many of the Asian Tigers were caught up in the currency depreciation game due to their focus on growth of exports. The policy decisions are being undertaken/can be taken to bring the economics out of the doldrums In order to bring the economics out of the doldrums, a model that has to guide towards a more stable, balanced, sustainable and coordinated growth has to be assumed. One major policy is that the government should chip in by introducing subsidies and large investments in the export sector though this is majorly based on the exports and not on local domestic demand. In order to touch on the domestic demand, a policy that has to be instituted is one that establishes a social security system which is a sufficient safety net so as to reduce household expenditures in order to save for their benefits on retirement. To add to those consumers need to change their attitudes. Detailed analysis of one Asian Tiger nation and comparison with China and or India One similarity of the Asian tiger’s with China and India is the fact that the countries that historically were extremely poor but became rich in time. The only difference is the timeline. For the case of the Asian tigers they were extremely poor until the second half of the twentieth century. In the beginning   of the 1960s, these Asian nations including South Korea, Hong Kong, Taiwan, and Singapore, began rapidly becoming richer. This happened to the extent that their quality of life increased to the point of competing with European nations such as Britain and Germany who are known to be rich historically. The same changes begun happening in China and India in the 1980s and 1990s. The two nations carry a large percentage of the word’s population and were historically known for extreme poverty. They then experienced dramatic changes and started growing richer as well. The two nations host 2.6 billion people which are almost 40% of the population of world. These two sets of regions experienced amazing miracles. Thus, the people were no longer being predestined to terrible living conditions associated with extreme poverty. When we look at Taiwan a one of the Asian tigers, their economy based on the market principals were established when the Kuomintang pro-capitalists were forced to move back to the small island of Taiwan. After the war that lasted until 1950, communists eventually took over the Chinese mainland. Taiwan begun largely as a bankrupt nation but it has grown to become one of world's economic leaders. Their quality of life is now similar to the richer nations such as the European nations. They started out with building infrastructure such as roads and railways which had been begun by former Japanese colonists. These helped to transport rice and sugar from the farms. They also took the advantage of the irrigation scheme that the Japanese colonists had set up to grow these crops. Their food production got further increment from the US government during the cold war. In the beginning of 1960s, the tariffs were lowered by the capitalist regime that was in power then on all the imports and exports. Due to the civil war, most international corporations moved to Taiwan to build factories using cheap and abundant labour. These boosted the foreign investment of Taiwan, thus increasing the wealth of Taiwan. Taiwan then invested on improving and increasing infrastructure including the highways, power plants, airports and seaports. It also invested in education which then generated students who were familiar with high technology products. All these made the Taiwan’s exports and industrial production to increase. By investing in improved infrastructure and education made Taiwan to one of the wealthiest nation in the entire Asia. On the other hand, China increased its wealth in the 1980s by bringing in two different policies. The first policy was the increment of agricultural efficiency by changing the public farms into private farms. The second policy involved investing a lot of wealth on direct foreign investment by opening a lot of free trade regions all over China to foreign companies. These helped China to move from subsistence production to the next stage of development. Then the Chinese government used the wealth to increase their make their economy more efficient. They invested on biotechnology so as to improve on the human health. They also reduce the fees on high school and university institutions thus enabling the student who were poor and could not manage education were now able to access. This helped them to get ha high paying jobs. The China government invested in education, infrastructure, health, telecommunications and other technologies which led to the efficiency increase in China’s markets. Conclusion The Asian Tigers, who are sometimes known as Asia's Four Little Dragons, defines the economies of Hong Kong, South Korea, Taiwan and Singapore. These are the regions that were noted for for sustaining rapid industrialization and elevated growth rates between the early 1960s and 1990s. They were known historically for being poor countries. Due to the improvement of their economies, these countries miraculously transformed to become rich nations. Work cited Krugman Paul, (August 18, 1997), whatever happened to the Asian miracle? Fortune Magazine Read More