EAST AND SOUTHEAST ASIAN

NIEs: 1

Achievements of these economies

World Bank, 1993.The East Asian

Miracle

GDP GROWTH RATES, 1960-90

1960-70 1970-80 1980-90

Asian NICsHong Kong 10.0 9.2 7.1Singapore 8.8 8.3 6.4South Korea 8.6 9.6 9.7Taiwan 8.8 9.8 7.7

Third World RegionsEast Asia and Pacific 5.9 6.7 7.6Latin American and Carib. 5.3 5.4 1.7Middle East and N. Africa n.a. 4.6 0.2South Asia 3.9 3.5 5.6Sub-Saharan Africa 4.2 3.6 1.7

1. Rapid Economic Growth

Country 1994 Per Cap GNP (PPP) % U.S.1995 GDP growth rate

Singapore $21,900 85% 8.9%Hong Kong

Korea $10,300 40% 9.0%Taiwan

Malaysia $8,440 33% 9.4%Thailand $6,970 27% 8.7%

Indonesia $3,600 14% 8.1%Philippines $2,740 11% 4.8%China $2,510 10% 10.7%

But variability of levels of economic well-being

2. Dynamic Agricultural Sectors

0

0.5

1

1.5

2

2.5

Average annual growth rate

East Asia

South Asia

Sub-Saharan Africa

Latin America

(1980-1990)

3. Rapid Export GrowthGROWTH RATE OF EXPORTS, 1965-1990

Average annual growth rate of exports1965-80 1980-90

Asian NICsHong Kong 9.1 6.2Singapore 4.7 8.6South Korea 27.2 12.8Taiwan 18.9 12.1

Third World RegionsEast Asia and Pacific 8.5 9.8Latin America and Carib. -1.0 3.0Middle East and N. Africa 5.7 -1.1South Asia 1.8 6.8Sub-Saharan Africa 6.1 0.2

01020304050607080

1965 1980 1990 1965 1980 1990

Asian NICs

New SE Asian NICs

Total Asian NICs

Share in world

exports

Share in 3rd world

exports

Role of Asian NICs as merchandise exporters, 1965-90

0

2

4

6

8

10

12

14

16

18

1973 1980 1990 1997

Germany

United States

Japan

France

U.K.

Asian NICs (4areas)

Leading merchandise exporters,

1973-97 (share of the world)

4. Reduced income

inequality and

povertyGDP

growth per

capita

Income inequality

5. Rapid Demographic Transitions

Development

Rates

Basis concepts

deaths births growth

-60

-50-40

-30

-20

-100

10

Change in CBR 1965-80 (percent)

Av. annual pop.growth 1980-90

Hong Kong

Indonesia

Korea

Malaysia

Singapore

Thailand -40

-30

-20

-10

0

10

Change in CBR 1965-80 (percent)

Av. annual pop.growth 1980-90

Brazil

Mexico

Peru

Venezuela

-15

-10

-5

0

5

Change in CBR1965-80 (percent)

Av. annual pop.growth 1980-90

Ghana

Kenya

Sierra Leone

Tanzania

-35

-30-25

-20-15

-10-5

05

Change in CBR1965-80 (percent)

Av. annual pop.growth 1980-90

Bangladesh

India

Nepal

Pakistan

6. High Investment and Savings Rates

Private vs. public

investment as shares of

GDP

7. High rates of investment in human capital

The productivity growth issue

• Sources of productivity growth– accumulations of physical and human

capital– total factor productivity growth

attributable to:• better technology• organization• gains from specialization etc.

• World Bank position

Paul Krugman’s position• Growth is primarily due to accumulations

of physical and human capital• e.g. Singapore 1966-1990

– employed share of population rises from 27% to 51%

– 1966--more than 50% of workers have no formal education; by 1990 2/3 have completed secondary education

– investment as share of output goes from 11% to more than 40%

Alternative perspectives on the East Asian Miracle ( I recommend: John Brohman. 1996. Postwar development in

the Asian NICs: Does the neoliberal model fit reality?)

The Neoliberal Interpretation• Market regulation thesis

– eliminated restrictions on international trade

– deregulated financial sector– privatized state enterprises– created unregulated labor market

• export-oriented industrialization– based comparative advantage of low cost

labor

Criticisms of the Neoliberal Interpretation• Except for Hong Kong, substantial state

intervention– Taiwan: state ownership– Singapore: public monopolies and

parastatals– Korea: encouragement of chaebol

• guided market economies (like Japan)• substantial initial protection of strategic

industrial sectors

Ignores key historical factors•Role of Japan in early 20th C• role of U.S. in mid 20th C

– much assistance– tolerated early import

substitution policy

• role of Japanese corporations in 1970s