Asian miracle was the most spectacular period that saw the Asian continent turned into a powerhouse. There were similarities in the factors that led to growth in the economies key among them being innovation, entrepreneurship and good policies adopted the governments in place in ensuring the continuity of the upward trend in economic growth. There were differences especially in strategies adopted by different countries in the region especially on matters pertaining to trade and education, which formed discontinuities in the patterns, and strategies. Changes in the continuity and discontinuity had a significant role in maintain and reducing economic growth rate of the region.
The Asian Miracle refers to the spectacular growth in many Asian economies in East Asia from 1960-96. During the period, the economies of Korea, Singapore, Taiwan and Honk Kong were the most successful besides the Japanese whose growth had started earlier. During the period, these and other economies including China, Indonesia, Thailand, Philippines and Malaysia contributes to the fastest growth in a continent. The ten economies had a superior economic growth globally during the time with Philippines being the worst performer at 2 per cent per annum, which was the average growth in the world in per capita terms at the time. The growth rate recorded by Japan, China, Indonesia, Malaysia and Thailand had an average of 3-5 percent. Hong Kong, Singapore, Taiwan and Korea were called “Four Tigers” after recording growth of over six percent and were maintained for over thirty years. There were similarities and differences in the factors that led to this growth in economy. This paper is an analysis of continuities and discontinuities in the factors that led to the Asian miracle. Analysis is also done on the impact of changes of theses continuities and discontinuities to the economy.
Continuities in Factors that Contributed to Asian Miracle
Continued policies on trade facilitated to the Asian miracle. There were liberal trade policies in Korea, Singapore and Taiwan and free trade entrôt. There was substantial lowering of trade barriers and issuing of export incentives in Taiwan and Korea over the period. Korea also issued low interest loans on export targets. A tariff rebate enabled inputs used in producing exports accessible at have international prices on the exports. Firms were therefore able to engage in exports rather than trade in domestic markets due to improved efficiency and subsidized credit. There was limited inflation in most of the Asian countries and a stable macroeconomic environment. Exchange rates were stable thereby enabling manufacturers concentrate more improving products rather than adapting to changing prices of commodities. Continued applied policies got better with years from the 60’s through the 80’s. There were increased subsidies in the 80’s compared to the 60’s. The continued improved policies in the period accounted a lot to the Asian Miracle (Stiglitz & Yusuf 2001). Learning, innovation and entrepreneurship played an important role in assimilation of technologies used by developed countries. The policy regimes in place together with these factors enable investment in physical and human capital accumulation. Technologies that Asian countries mastered in the 70 and 80’s were inexistent in the 60’s. For instance, Taiwan did not produce electronics goods in 1960, but these goods accounted for 21% of manufacturing exports in 1990 (Peng 2000). In doing this, most Asian giants developed new set of skills and organized economic activities that led to there being competent in new markets. Each year offered a new experience and challenge for the management and improvement of human capital. There were increased resources invested in Korea and Singapore towards technology in the mid 80’s in order to keep up with the competition. Good management and risks in entrepreneurship played an important role in achieving...
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