Southeast Asia Economic Growth

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Southeast Asia Economic Growth

By | November 2012
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Southeast Asia: Economic Growth
Review 1:
The aim of this review is to analyze what types of dynamic processes have been fundamental in the socio-economic transformation of three different countries. Firstly, I will analyze the case of Taiwan, a Northeast Asian country that took off in the 1960s. Second will be the case of Thailand, a second-tier Southeast Asian. Thirdly, I will analyze the dynamic process of Vietnam, a third-tier Southeast Asian country. I will focus on different domestic and international factors that led to the growth of the three countries. Finally, I will try to highlight the differences and similarities between the dynamics of these countries. Taiwan:

One of the domestic factors that contributed to Taiwan’s economic growth was the agricultural transformation of 1950s-1960s which, compared to other East Asian countries, was much more egalitarian and better carried out. In fact, there is evidence that its labor input and labor productivity was higher than those of Southeast Asian countries’, such as Thailand, Indonesia and the Philippines. This development interacted with other sectors and created off-farm employment opportunities in rural areas. An evidence of this fact is the high ratio of growth in off-farm income, divided by growth in farm income (Booth, A. 2002). Actually, some authors argue that Taiwan’s high growth was due to its “early specialization in the export of labor-intensive manufactures”, made possible by the liberalization of trade. This export-led growth strategy made the country open to the global market, and the growth was boosted by some other policies carried out by the institutions, such as the pursuing of realistic exchange rates. These policies resulted in higher investment, expansion of exports and a rapid increase in the growth rate (Haggard and Kim, 1997). Thailand:

In contrast to the Taiwanese experience, Thailand’s distribution of land and income was not egalitarian. The county had a considerable poverty...

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