East Asian Tigers
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Krista Bruns
SSC 141a
Assignment 3
British English
Can one tame a tiger?
– The extensive growth of South East Asian Economies –
Introduction
A tiger economy is a name given to a region or country which undergoes a heavy and fast economic growth. This usually also leads to rising living standards. This term was first applied to South Korea, Singapore, Hong Kong and Taiwan. Since the 1960s, these four countries are known as the East Asian Tigers. Later on more Tiger Economies emerged, but this essay will focus mainly on the first four. Even though the countries do not share their borders, together they can be considered as an economic region, for they share a lot of characteristic and they have gone to similar developments at the same time.
All tigers were relatively poor during the 1960s. Due to this factor, they had the comparative advantage of cheap labour. In this essay the competitiveness of the East Asian Tigers today will be elaborated on. This will be done by analyzing the positive and negative production assets, the economic sectors, the economic model and the basic market characteristics. The main question that will be tried to answered is whether the Tigers will maintain their reputation as really fast growing economies.
This figure shows the extensive growth of Korea and Taiwans GNP (gross national product) per working-age person and their TFP (total factor productivity).
Positive/negative assets
Climate
The whole of South East Asia has a very uniform temperature regime. Except for in some highlands and some regions all up in the North, South East Asian temperatures seldom fall below 26oC. The most determining factor of the climate in South East Asia is, however, the rainfall. This rainfall is influenced by two air masses moving across South East Asia, and where these two Air Masses meet, a zone roughly along the Equator, which is commonly called the Intertropical Convergence Zone is formed. In this zone there is an upward air movement, producing convective rainfall, mainly in the two rain seasons per year. This makes the climate of the East Asian Tigers, compared to other countries close to the Equator, relatively good for agricultural production. (CIA World Fact book 2006) (Dwyer, 1990)
Resources
South East Asia is a mineral-rich region. The East Asian Tigers, however, do not focus on source exploitation as much as their neighbour countries such as Malaysia (which has long been the worlds leading tin producer), Burma, Indonesia and the Philippines. Some of the main resources are fish, coal, lead, zinc, graphite, magnesite, iron ore, copper, gold, pyrites, salt, and hydropower. (CIA World Fact book) (Dwyer 1990, 82)
Soils
Contrary to the climate, the East Asians soils are anything but uniform. As Dwyer argues, “The soils of any locality is a function of a complex of factors: parent rock, climate, relief, aspect, vegetation, drainage, human and animal activity and the time span over which deposits have developed.” (1990, 86) There are however some generalities that can be posed on this region. The soils have the tendency to erode easily. The presence of impermeable deposits beneath the upper layer often causes this, hindering drainage and causing the ground above to become waterlogged. This is why South East Asian soils need special attention and agricultural is often on terrace-plants.
Water and forests resources
Even though these sources are renewable, the Tigers region is dealing with great pollution problems in air and water, due to the rapid urbanization and industrialization. Furthermore deforestation is one of the regions main environmental problems. South East Asia has in fact the highest deforestation rate in the world and this rate is assumed only to increase over the next years. (ASB)
Advanced production assets
The infrastructure is a very important factor for economic growth, and has therefore been one of the main focuses of the Tiger economies ever since the early 1960s. Because of the high population density in these countries, stock space is really small and therefore Just-in-Time delivery has risen to become very important over the past few years. In order to accomplish this, infrastructure must be of a real high value and traffic problems must be minimalized. In Singapore, for example, the authorities have implemented restricted car used. To enter the restricted central zone, drivers have to buy a license, which they can only make use of during certain hours on certain days. Singapore being a country with one of the highest vehicle densities in the world, this is necessary to avoid huge traffic jams.
The second aspect that East Asian governments have been focusing
on is education. While their unskilled labour forces were getting more expensive and they thus had to outsource these activities to lower-waged countries, the population had to do something in order to maintain their high living standards. Due to these investments in especially higher technical education the Tiger economies now have a highly skilled labour force and they will continue to invest more into this.
The East Asian Tigers have a great labour force, formed by men as well as women, and because of the high growing rates there is also a low and decreasing unemployment rate. The tigers used to expel because of their cheap labour force, but due to the rising living standards, most low skilled work is now being done somewhere else.
Economic sectors, networks
Contrary to other former Third World countries, the Asian Tigers mainly focus on services and distribution. These activities take place in what is called the tertiary and quaternary economic sectors. Singapore and Hong Kong, for example, are gateways between the demanding Europe and the producing Third World countries. Furthermore, the Tiger economies produce high technological goods. An example of