MN2165

Only available on StudyMode
  • Download(s) : 255
  • Published : January 14, 2015
Open Document
Text Preview


RHUL Student ID(s)

100788928

Year

1

Course Code

MN2165 GLOBAL ECONOMY

Course Tutor(s)

Dr Diego Vazques-Brust

Assignment No

1

Degree Title

Bachelor of Science (Hons), Management

Question No. & Title

5. Compare and contrast policies, factors influencing success and outcomes achieved by the following “Asian Miracle” countries: Taiwan, Korea, Thailand, Malaysia, Vietnam and Laos.

After the end of World War 2, East Asia experienced a rapid economic growth which lasted till 1990; before the Asian Financial Crisis. The countries that achieved substantial growth were Taiwan, South Korea, Hong Kong, Singapore and Japan. These countries were referred to as the Asian Tigers and they were known for achieving and maintaining incomparably high growth rates and rapid industrialization between 1960 and 1990 (Lall, 1996). By the 21st century, the Asian Tigers had grown into high-income and advanced economies (Page, 1994). Initially, these countries were not expected to achieve such rapid growth as compared to Western countries (Amsden,1993). The other countries which were not far behind from the five miracle economies were Malaysia, Thailand and Indonesia. These countries were known as the Second-Generation Tigers. However, less fortunate countries such as the former French Indochina (Focusing on Vietnam and Laos) remained lagged in terms of development.

Source: Summers and Heston (1991). Barro (1989). World Bank data.

Figure 1 shows the eight HPAEs; all have a positive outlier in the income-growth distribution. While Malaysia, Thailand, and Indonesia are closer to the predicted values, the other five economies, Taiwan, Korea, Japan, Singapore and Hong Kong, are significantly above the predicted Gross Domestic Product growth rates on the basis of relative income level. From this chart, it is concluded that all of the HPAEs were catching up to the more developed countries.

This essay analyses the causes that led to the difference in development between the Asian Tigers (5 miracle countries), Second-Generation Tigers (Second-tier countries) and the least developed ones. This essay will also state the multiple factors which led to the countries’ divergent paths and compare and analyse the impacts of each factor. The factors that will be expounded on are: (1) Economic Policies, (3) Factors influencing success and lastly, (4) Domestic and Regional Political outcomes.

In 1960, the companies that achieved high growth rates and rapid industrialization were addressed as High Performing Asian Economies of Northeast Asia (HPEAs) of Northeast Asia and the Second-tier were referred to as Newly Industrialising Economies (NIEs) of Southeast Asia (Fisher & Rotemberg, 1994). Key events such as colonialism, decolonisation and the cold war played a part in this phenomenon as it contributed to the building of HPEAs and NIEs economies.

Colonialism

Majority of HPEAs and NIEs countries used to be under colonial rule except for Thailand and Japan. Both Thailand and Japan used various methods to run their country; two of their main methods where their geographical location and resources available (Andressen, 2002). During the colonial era, majority of Southeast Asian countries used to have higher GDPs than Northeast Asian miracles; in the early 19th century, countries like Burma and Vietnam were wealthier than Taiwan, which GDP was $499 in 1820. During that period, both Malaysia and Indonesia’s GDP topped Taiwan and Korea until the 1940s, during the fall of colonisation.

Burma and Vietnam owed most of its achievements to colonial institutions and natural resources. Unfortunately, colonialism did everything but good for both countries’ welfare (Easterly, 1994). The aim of colonialism was to acquiring full or partial political control over both countries, occupy it with settlers and exploit it economically. The...
tracking img