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Economic lessons from asian tigers, japan,
- 1. ECONOMIC LESSONS FROM ASIANTIGERS, JAPAN, EUROPE AND AMERICA.
- 2. ECONOMIC LESSONS FROMASIAN TIGERS, JAPAN, EUROPE AND AMERICA.
- 4. The four AsianTigers, Asian Dragons and Asian Miracles are various terms used to refer to the highly developed economies of 1) Hong Kong 2) South Korea 3) Singapore 4) Taiwan INTRODUCTION
- 12. 1. The AsianTigers were notable for maintaining extremely high growth rates and rapid industrialization between the early 1960s and 1990s. By the 21st century all four countries developed into advanced and high-income economies. 2. Hong Kong and Singapore have become world-leading international financial centres, while South Korea and Taiwan are world leaders in manufacturing Information Technology Equipment. ECONOMIC HISTORY OF ASIAN TIGERS
- 13. 3. The ‘Tigers’enjoyed decades of super growth mainly due to state industrial policies which supported exports to rich, industrialised nations. Also, the Asian Tiger governments imposed very low interest rates for loans to specific export industries, making their economies experience high growth rates which were sustained for decades. ECONOMIC HISTORY OF ASIAN TIGERS 4. There were major government investments in education, but the political systems were non-democratic and relatively authoritarian during the early years of development.
- 14. ECONOMIC HISTORY OFASIAN TIGERS 5. The Asian Tigers invested heavily in US bonds and they (Asian Tigers) had high public and private savings rate. 6. There was however a period of liberalisation, but the first major set-back experienced by the Asian Tigers’ economies was the Asian Financial Crisis. While Singapore and Taiwan were relatively unaffected, South Korea was affected by a major stock market crash caused by high levels of non-performing loans. Whereas, Hong-Kong underwent intense speculative attack against its stock market and currency, leading to serious market interventions by the nation’s monetary authorities.
- 15. ECONOMIC HISTORY OFASIAN TIGERS 7. In spite of the financial crisis, the years after saw all the four countries recovering strongly. South Korea, the worst hit of the ‘tigers’, has managed to triple its per capita GDP in dollar terms since 1997. 8. Abundance of cheap labour.(High Population).
- 16. Classwork • Briefly narratethe economic history of the Asian Tigers.
- 19. Assignment • Give 10differences between Developed countries (ACs) and Developing countries (LDCs). Give examples to support your point.
- 20. DEVELOPMENT STRATEGIES EMPLOYED BYTHE ASIAN TIGERS The strategies adopted by the Asian Tigers to achieve growth and development are: 1. Export-oriented policies and strong development policies: To achieve economic prosperity, the Asian Tigers utilized export-oriented policies which entails the speeding up of the industrialization process of a country by exporting goods for which the country has a comparative advantage over others. They also embarked on solid macroeconomic management. 2. Investment in physical and human capital development: The Asian Tigers invested greatly in human and physical capital. In fact, in 1960, this far exceeded investment levels in other countries at similar levels of development. This consequently led to a rapid growth in per capita income levels.
- 22. DEVELOPMENT STRATEGIES EMPLOYEDBY THE ASIAN TIGERS 3. Education: Education played a major role in the Asian Miracle. It allowed for high levels of literacy and cognitive skills in those countries. South Korea in particular, had achieved a secondary education enrolment rate of 88% by 1987. 4. Creation of a stable macroeconomic environment: Sound management of the macro-economy was very key to the Asian Miracle. The Asian Tigers were able to manage, with a high level of success, their macroeconomic environment. Specifically, they managed their budget deficits( when estimated government revenue is less than proposed expenditure), external debts and exchange rates excellently to put their economies in sound states of health and prevent them from falling into recession or other destabilising conditions. Deficits were kept very low. External debt was almost non-existent as Hong-kong, Singapore and Taiwan failed to borrow from abroad. South Korea, however, borrowed heavily but it was sustained by its high export levels.
- 24. DEVELOPMENT STRATEGIES EMPLOYED BYTHE ASIAN TIGERS 5. Exchange rates: The Asian Tigers actively managed their exchange rates(it is the rate at which the domestic currency is exchanged for the foreign currency) to avoid exchange rate appreciation. This allowed their exports to be relatively cheap and in high demand ( meaning if cost of production is cheap, price of product will be cheap) . 6. The Culture of hard work and innovativeness: These were strongly imbibed by the Asian Tigers. 7. Campaign against corruption: Corruption is the bane of development. The Asian Tigers embarked on a massive campaign to stamp out corruption from their individual economies and made it successful by spelling out harsh punishments especially for corruption-related criminal offences, irrespective of the social or financial status of the offenders.
- 25. Classwork • List thefactors that account for the rapid development of the Tiger in South East Asia.
- 27. ASIAN TIGERS: LESSONSFOR THE NIGERIAN ECONOMY Many of the Asian Tiger strategies are a replica of Europe’s and America’s strategies. Nigeria has the following lessons to learn from the Asian Tigers 1. Nigeria’s export policy should focus on areas of comparative advantage or preference e.g. agriculture. Nigeria should increase its production and export of products like cocoa and groundnut to increase her foreign exchange earnings rather than depend solely on crude oil earnings. 2. The Nigerian educational system should be stabilized through policies that will end incessant school closures. It should also be reformed to focus on skill acquisition rather than mere certification.
- 29. ASIAN TIGERS: LESSONSFOR THE NIGERIAN ECONOMY 3. A financial and banking system that favours savings and encourages business growth should be pursued. Government and private savings should be encouraged to improve future investment which is necessary for development. 4. Proper and effective management of resources should be embraced. Looting of the nation’s resources must be discouraged and corruption addressed with zeal. No sacred cows should be allowed. 5. A great number of domestic manufacturing industries making use of locally sourced materials should be set up. This would reduce the rate of dependence on imported products. Imports should be generally discouraged to promote patronage of locally-made goods and rapid development of local manufacturing companies. This will improve employment and arrest balance of payment problems.
- 31. ASIAN TIGERS: LESSONSFOR THE NIGERIAN ECONOMY 6. Proper management of the macro-economic environment especially the management of variables like public debts, deficit and exchange rate.
- 32. Classwork • What arethe lessons, the Nigerian will need to learn from the Tigers economies?
- 33. ASSIGNMENT 1. What doyou understand by the term ‘‘Japanese Miracle’’? 2. Discuss how the Japanese miracle aided the growth of the economy from 1945 to 1970. 3. What are the problems facing small and medium scale enterprises (SMEs) in Nigeria.