Asian Tigers Essay Example | Topics and Well Written Essays - 1250 words

Asian Tigers - Essay Example The growth of the ' Asian Tigers' in the 1960's In the 1960s, the Asian tigers were very poor thus labor was cheap, and in abundance. They then made educational reforms and coupled this with the cheap labor to establish productive work forces. In order to improve productivity, they focused on improving education at all levels with more emphasis on elementary education and compulsory high school education. College and university system was also improved by setting aside some money for the same. For economic development, they pursued an export driven model whereby they focused on the manufacture of goods for export to nations that are highly industrialized. They discouraged domestic consumption through government policies such as high tariffs. The economic growth of the Asian Tigers has been termed as the East Asian Miracle because of the supernatural increase of four economics. East Asia which comprises Korea, Taiwan, Singapore and Hong Kong has been the fastest growing are in the wor ld. They have been termed as the models for achievement for other rising economies. There have been several factors which led to the success of the East Asian countries. These include the macroeconomic discipline, their outward orientation, high investment and saving rates and public policies which were good. Although these may vary from region to region, the experience of east Asia, supported by recent research on growth, has convinced many observers that an on looking development strategy, particularly a dynamic export sector, is a conducive growth. The other factor that boosts their trade was greater openness which is conducive to growth and thus they embrace the policies that promote openness. They also used non-tariff and high tariff barriers to promote industrialization. Between 1965 and 1993, real gap in the East Asian economies grew at an annual average rate of nearly 9 percent more than twice as first as their Latin American counterparts. They all had common characteristics which include focusing on exporting to rich and industriali0sed nations. They also maintained a double increment for years. They were each non democratic and relative to authoritative systems for years. They had high tariff on imports and less valued currencies, and each held bond bonding of U.S. at a high level. Their savings rate was high. Current Growth The Asian Tigers are no longer growing so rapidly now. This is due to the Asian financial crisis that burst in 1997. Economies of unrestricted flow was opened which led to the erosion of their financial successes. This led to a volatile foreign investment which was dangerous. Many of the Asian Tigers were caught up in the currency depreciation game due to their focus on growth of exports. The policy decisions are being undertaken/can be taken to bring the economics out of the doldrums In order to bring the economics out of the doldrums, a model that has to guide towards a more stable, balanced, sustainable and coordinated growth has to be assumed. One major policy is that the government should chip in by introducing subsidies and large investments in the export sector though this is majorly based on the exports and not on local domestic demand. In order to touch on the domestic demand, a policy that has to be instituted is one that establishes a social security system which is a sufficient safety net so as to reduce household expenditures in order to save for their benefits on retirement.