The Economic Development of Eastern Asia Countries and the State Intervention Introduction The economic growth and development being experienced in Eastern Asia today can be traced to the years of the 1960s (Oracle Education Organization, 1999). From a rather deprived state, Eastern Asia now houses what has come to be known as the Four Asian Giants…
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Economists attribute the success of the Eastern Asian region to a number of factors and models. Interventions put together by individual States have also had roles to play in the economic development of the region. This essay therefore reviews the economic development of Eastern Asia countries and the State Interventions. Models Accounting for Economic Development in Eastern Asia A number of economic models have been instrumental in the economic development of most countries of the world. Indeed, economic development is not achieved by coincidence or by chance. Countries all over the world, including Eastern Asia countries have had to depend on one economic model at one point in time or the other. Some of these models have been discussed below. Generally, the models are different from the state interventions in the sense that whereas the economic models refer to a collective number of economic strategies, the state interventions refer to specific plans implemented to solve specific economic problems. This is to say that models work on long term basis whereas interventions work on short term basis. Factors of Production The International Monetary Fund put labour, capital and technology together and refer to them as factors of production (Sarel, 1996). The region of Eastern Asia shifted a lot of focus on its economic growth strategy into improving the human capital base, making capital available and advancing in technology. This way, not only did it take advantage of its large population (Asia is the most populated continent in the world) but also equipped the population to have the needed skills to lead the new world of industrialization. In some circles of the economic world, debate has always raged as to which of the factors of production to give prominence to in the economic development model. But clearly, all three factors are interrelated and equally important. Empowering human resource through education is an effective way of ensuring that population growth does not become a curse but a blessing. As Asia and Eastern Asia for that matter is one of the world’s most populated regions, if efforts are not made to resource the human capital with requisite skills and knowledge to play contributing roles in the economic drive, the populace would become a liability instead of an asset. It is also when the populace are adequately skilled that they can made judicious use of the capital and technology that is pumped into the economy. Macroeconomic Stability The region adopted a model of macroeconomic stability instead of microeconomic growth. Microeconomic stability could not have been adopted as a model because it focuses more on short term economic relief than long term strategies. In their quest to achieving this, the economic climate of the region was positioned in a way that ensured that inflation was kept low, real exchange was made stable and competitive and government budgets deficit and foreign debts were kept within acceptable range. The long term impact that these policies on the macroeconomic state of the region was that it created very conducive working for investors to choose the Eastern Asian trade corridor instead of other trade corridors. As these investors established their businesses, employed citizens of Eastern Asia countries, paid taxes and undertook social intervention projects, the economic growth of the
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