By the early 21st century, these economies had developed intohigh-income economies, specializing in areas of competitive advantage. Hong Kong and Singapore have become leading internationalfinancial centres, whereas South Korea and Taiwan are leaders in manufacturingelectronic components and devices; Taiwan now produces the most advanced semiconductor chips in the world; South Korea has also developed into a major global arms manufacturer. Large institutions have pushed to have them serve as role models for manydeveloping countries, especially theTiger Cub Economies of Southeast Asia.[2][3][4]
In 1993, aWorld Bank reportThe East Asian Miracle creditedneoliberal policies with the economic boom, including the maintenance ofexport-oriented policies, low taxes and minimalwelfare states. Other institutional and empirical analyses have argued that extensivestate intervention and industrial policy had a much greater influence than the World Bank suggested.[5][6][7][8]
Growth in per capita GDP in the tiger economies between 1960 and 2019[9]
Prior to the1997 Asian financial crisis, the growth of the Four Asian Tiger economies (commonly referred to as "the Asian Miracle") has been attributed to export oriented policies and strong development policies. Unique to these economies were the sustained rapid growth and high levels of equal income distribution. A World Bank report suggests two development policies among others as sources for the Asian miracle: factor accumulation and macroeconomic management.[10] A paper in theThe American Journal of Economics and Sociology attributes the Four Tigers' success to multiple factors:[5]
The Hong Kong economy was the first out of the four to undergo industrialization with the development of a textile industry in the 1950s. By the 1960s, manufacturing in the British colony had expanded and diversified to include clothing, electronics, and plastics forexport orientation.[16] Following Singapore's independence fromMalaysia, theEconomic Development Board formulated and implemented national economic strategies to promote the country's manufacturing sector.[17]Industrial estates were set up and foreign investment was attracted to the country with tax incentives. Meanwhile, Taiwan and South Korea began to industrialize in the mid-1960s with heavy government involvement including initiatives and policies. Both countries pursued export-oriented industrialization as in Hong Kong and Singapore.[18] The four countries were inspired by Japan's evident success, and they collectively pursued the same goal by investing in the same categories: infrastructure and education. They also benefited from foreign trade advantages that set them apart from other countries, most significantly economic support from the United States, including FreeDevelopment aid; part of this is manifested in the proliferation of American electronic products in common households of the Four Tigers.[19]By the end of the 1960s, levels in physical andhuman capital in the four economies far exceeded other countries at similar levels of development. This subsequently led to a rapid growth in per capita income levels. While high investments were essential to their economic growth, the role of human capital was also important. Education in particular is cited as playing a major role in the Asian economic miracle. The levels of education enrollment in the Four Asian Tigers were higher than predicted given their level of income. By 1965, all four nations had achieved universal primary education.[10] South Korea in particular had achieved a secondary education enrollment rate of 88% by 1987.[10] There was also a notable decrease in the gap between male and female enrollments during the Asian miracle. Overall these advances in education allowed for high levels of literacy and cognitive skills.
The creation of stablemacroeconomic environments was the foundation upon which the Asian miracle was built. Each of the Four Asian Tiger states managed, to various degrees of success, three variables in:budget deficits,external debt andexchange rates. Each Tiger nation's budget deficits were kept within the limits of their financial limits, as to not destabilize the macro-economy. South Korea in particular had deficits lower than theOECD average in the 1980s. External debt was non-existent for Hong Kong, Singapore and Taiwan, as they did not borrow from abroad.[10] Although South Korea was the exception to this – its debt to GNP ratio was quite high during the period 1980–1985, it was sustained by the country's high level of exports. Exchange rates in the Four Asian Tiger nations had been changed from long-term fixed rate regimes to fixed-but-adjustable rate regimes with the occasional steep devaluation of managed floating rate regimes.[10] This active exchange rate management allowed the Four Tiger economies to avoid exchange rate appreciation and maintain a stable real exchange rate.
Export policies have been the de facto reason for the rise of these Four Asian Tiger economies. The approach taken has been different among the four nations. Hong Kong, and Singapore introduced trade regimes that were neoliberal in nature and encouraged free trade, while South Korea and Taiwan adopted mixed regimes that accommodated their own export industries. In Hong Kong and Singapore, due to small domestic markets, domestic prices were linked to international prices. South Korea and Taiwan introduced export incentives for the traded-goods sector. The governments of Singapore, South Korea and Taiwan also worked to promote specific exporting industries, which were termed as an export push strategy. All these policies helped these four nations to achieve a growth averaging 7.5% each year for three decades and as such they achieveddeveloped country status.[20]
Dani Rodrik, economist at the John F. Kennedy School of Government at Harvard University, has in a number of studies argued that state intervention was important in the East Asian growth miracle.[21][7] He has argued "it is impossible to understand the East Asian growth miracle without appreciating the important role that government policy played in stimulating private investment".[7]
The Tiger economies experienced a setback in the1997 Asian financial crisis. Hong Kong came under intense speculative attacks against its stock market and currency necessitating unprecedented market interventions by the stateHong Kong Monetary Authority. South Korea was hit the hardest as its foreign debt burdens swelled resulting in its currency falling between 35 and 50%.[22] By the beginning of 1997, the stock market in Hong Kong, Singapore, and South Korea also saw losses of at least 60% in dollar terms. Singapore and Taiwan were relatively unscathed. The Four Asian Tigers recovered from the 1997 crisis faster than other countries due to various economic advantages including their high savings rate (except South Korea) and their openness to trade.[22]
The export-oriented tiger economies, which benefited from American consumption, were hit hard by the2008 financial crisis. By the fourth quarter of 2008, the GDP of all four nations fell by an average annualized rate of around 15%.[20]Exports also fell by a 50% annualized rate.[20]Weak domestic demand also affected the recovery of these economies. In 2008, retail sales fell 3% in Hong Kong, 6% in Singapore and 11% in Taiwan.[20]
As the world recovered from the2008 financial crisis, the Four Asian Tiger economies have also rebounded strongly. This is due in no small part to each country's government fiscal stimulus measures. These fiscal packages accounted for more than 4% of each country's GDP in 2009.[20]Another reason for the strong bounce back is the modest corporate and household debt in these four nations.[20]
A 2011 article published inApplied Economics Letters by financial economist Mete Feridun of University of Greenwich Business School and his international colleagues investigates the causal relationship between financial development and economic growth forThailand,Indonesia,Malaysia, thePhilippines, China,India and Singapore for the period between 1979 and 2009, usingJohansen cointegration tests and vectorerror correction models. The results suggest that in the case of Indonesia, Singapore, the Philippines, China and India financial development leads to economic growth, whereas in the case of Thailand there exists a bidirectional causality between these variables. The results further suggest that in the case of Malaysia, financial development does not seem to cause economic growth.[23]
In 2018, the combined economy of the Four Asian Tigers constituted 3.46% of the world's economy with a total Gross domestic product (GDP) of 2,932 billion US dollars. The GDP in Hong Kong, Singapore, South Korea and Taiwan was worth 363.03 billion, 361.1 billion, 1,619.42 billion and 589.39 billion US dollars respectively in 2018, which represented 0.428%, 0.426%, 1.911% and 0.696% of the world economy. Together, their combined economy surpassed the United Kingdom's GDP of 3.34% of the world's economy some time in the mid-2010s. In 2021, each of the Four Asian Tigers' GDP Per capita (nominal) exceeds $30,000 according toIMF's estimate.
Maddison GDP per capita of the Four Asian Tigers Viewchart definition.
The four governments focused on investing heavily in their infrastructure as well as education to benefit their country through skilled workers and higher level jobs such as engineers and doctors. The policy was generally successful and helped develop the countries into moreadvanced andhigh-income industrializeddeveloped countries. For example, all four countries have become global education centers with Singapore, Taiwan, South Korea and Hong Kong high school students scoring well on math and science exams such as thePISA exam[citation needed] and with Taiwanese students winning several medals in International Olympiads.[24]
The role ofConfucianism has been used to explain the success of the Four Asian Tigers. This conclusion is similar to theProtestant work ethic theory in the West promoted by German sociologistMax Weber in his bookThe Protestant Ethic and the Spirit of Capitalism. Theculture of Confucianism is said to have been compatible with industrialization because it valued stability, hard work, discipline, and loyalty and respect towards authority figures.[25] There is a significant influence of Confucianism on the corporate and political institutions of the Asian Tigers. Prime Minister of SingaporeLee Kuan Yew advocatedAsian values as an alternative to the influence of Western culture in Asia.[26] This theory was not without its critics. There was a lack of mainland Chinese economic success during the same time frame as the Four Tigers, and yet China was the birthplace of Confucianism. During theMay Fourth Movement of 1919, Confucianism was blamed for China's inability to compete with Western powers.[25]
In 1996, the economist Joseph Stiglitz pointed out that, ironically, "not that long ago, the Confucian heritage, with its emphasis on traditional values, was cited as an explanation for why these countries had not grown."[27]
Parts of this article (those related to Territory and region data) need to beupdated. Please help update this article to reflect recent events or newly available information.(June 2024)
^TheHDI annual report compiled by theUNDP does not include Taiwan because it is no longer a UN member state, and is neither included as part of the People's Republic of China by the UNDP when calculating data for China.[47]Taiwan's Statistical Bureau calculated its HDI for 2021 to be 0.926 based on UNDP's 2010 methodology,[48][49] which would place Taiwan at 19th globally in 2021 within the 2022 UNDP report.[50][51]
^Leea, Jinyong; LaPlacab, Peter; Rassekh, Farhad (2 September 2008). "Korean economic growth and marketing practice progress: A role model for economic growth of developing countries".Industrial Marketing Management.37 (7):753–757.doi:10.1016/j.indmarman.2008.09.002.
^abcdefAnonymous (2009)."Troubled Tigers".The Economist. Vol. 390, no. 8616. pp. 75–77.Archived from the original on 22 November 2018. Retrieved6 September 2018.
^abPam Woodall (1998). "East Asian Economies: Tigers adrift".The Economist. London; US: The Economist Intelligence Unit. pp. S3 –S5.ISSN0013-0613.ProQuest224090151.
^Mukhopadhyaya, Bidisha; Pradhana, Rudra P.; Feridun, Mete (2011). "Finance-growth nexus revisited for some Asian countries".Applied Economics Letters.18 (6):1527–1530.doi:10.1080/13504851.2010.548771.S2CID154797937.
^Some Lessons from the East Asian MiracleArchived 29 September 2018 at theWayback Machine, a 27-page paper published by the World Bank, Joseph E. Stiglitz, Aug. 1996. In addition to the Four Asian Tigers, Stiglitz also lists the economies of Japan, Indonesia, Malaysia, and Thailand as part of the East Asian Miracle.
^"人類發展指數(Human Development Index, HDI)"(PDF) (in Chinese (Taiwan)). Directorate General of Budget, Accounting and Statistics, Executive Yuan, Taiwan (ROC). 6 January 2011. Archived fromthe original(PDF) on 14 April 2021. Retrieved13 March 2021.
^"HKMA joins SEACEN" (Press release). Hong Kong Government. Hong Kong Monetary Authority. 31 October 2014.Archived from the original on 17 February 2016. Retrieved16 August 2017.
Ezra F. Vogel,The Four Little Dragons: The Spread of Industrialization in East Asia (Cambridge, Massachusetts: Harvard University Press, 1991).
Hye-Kyung Lee & Lorraine Lim,Cultural Policies in East Asia: Dynamics between the State, Arts and Creative Industries (Palgrave Macmillan, 2014).
H. Horaguchi & K. Shimokawa,Japanese Foreign Direct Investment and the East Asian Industrial System: Case Studies from the Automobile and Electronics Industries (Springer Japan, 2002).
Kim, Eun Mee (1998).The Four Asian Tigers: Economic Development and the Global Political Economy. Emerald Publishing.ISBN9780124074408.
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