East Asian Economic Growth

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The global recession of 2008 also affected their economies, but their experiences in international trade are all worth studying because they derived much success in it. With these HPAE are subgroups such as the Four Tigers, namely Hong Kong, Singapore, South Korea, and Taiwan. Another group is the Newly Industrializing Economies (NIE) of Indonesia, Malaysia, and Thailand. China has a category all its own due to its size and communist influence. The NIE followed suit after the Four Tigers’ economies took off. Experts have analyzed how the HPAE have sustained their economic success and found that these countries were careful in maintaining stable macroeconomics. They also prioritized sharing the benefits of their economic growth with their citizens by providing them access to health care, education, and housing, so people were made to feel they were well taken care of. Such actions were successful in soliciting people’s support and confidence. In turn, the high rates of literacy produced in their people were attractive to foreign investors and multicultural firms. Another reason for their success is the promotion of their exported products while being open to imports. These countries believed that exportation provided the foreign exchange earnings they needed as well as encouraged businesses to be competitive in coming up with high-quality products to export while importation brought about new technologies and novel products to update their knowledge in skills. Income rates in these Asian countries are much higher than their Latin American counterparts. As opposed to them, the East Asian economy did not have high inequality in income and wealth at the beginning of their growth. The pattern followed what was known as “Kuznet’s curve”, which suggested equality first declines and then rises. The relative equality in these nations resulted from the characteristic sharing of wealth from economic success. Hence, the provision of basic needs as well as land reform, free public education, free basic health care and significant investments in rural infrastructure such as clean water systems, transportation and communication systems. The positive outcomes of such provision extend to the rise in business opportunities since the people have the purchasing power to support small- and medium-scale entrepreneurs which are locally based. This contributes to political stability and sustains the interest of businesses to invest in these countries on a long-term basis. The export push in the East Asian nations resulted in more than double their share in total world exports and total world manufactured exports. Such success was attributed to education policies favoring the advocacy of literacy spread in primary and secondary schooling. On top of that, HPAE nations endorsed export promotion policies that created an impetus for export businesses. For example, export financing credit and tax benefits were readily available in Japan and the Four Tigers for businesses that reach their export targets. Tariff-free access to imports of capital equipment needed in manufacturing is also provided. Such practices of export promotion connected with high rates of growth may be considered controversial in economics as well as sharing such export promotion strategies with other nations as it is likely to create trade conflicts since it may go against the rules of fair trade agreed to by the members of the World Trade Organization.