The Asian Tigers' Economic Growth

Asian Tigers are four fast-developing countries in East Asia, namely Singapore, Taiwan, South Korea and Hong Kong. Their high growth rate started in the 1960s as a result of foreign investments. Taiwan and South Korea economy growth were primarily as a result of increased manufacturing investments by Japanese transnational corporations (TNCs) that were looking for a low cost of production through cheap labour and other things.

Just like the South Korea economy and Taiwan economy, the foreign investments triggered the emergence of local firms that turned these economies from agrarian societies to industrialised nations that rely on the export of finished products such as electronics, cars, computers and many more. Below is a breakdown of each of the four tigers economies.

South Korea

In the 1960s, South Korea would be compared to some of the poorest nations that depend solely on agriculture, but that changed when the government came up with policies to attract large TNCs. The government also hiked import taxes to create a market for locally produced products and promoted innovation research. These efforts led to the growth of high-tech products manufacturers who eyed the large market of the neighbouring South East Asian Countries like China.

Singapore

Singapore’s beginnings after independence were not promising as they faced challenges of high levels of unemployment and high illiteracy rates. The government made the first steps of improving the country’s economic position by coming up with strategies to attract foreign direct investments. Singapore economy growth is mainly attributed to its idea position in South East Asia, which attracted foreign direct investments. The country’s deep-water harbours also positioned Singapore as a trade centre that linked different trade routes. Currently, Singapore is one of the world’s major money exchange centres and has the highest GDP among the tigers.

Hong Kong

Hong Kong’s economic growth started earlier compared to the other tiger’s, but the growth strategy was similar. The country encouraged foreign investments through tax incentives and cheap labour that made it the most attractive business environment in East Asia. A huge number of FDI’s set up their firms in Hong Kong, making it the world’s third-largest recipient of FDI’s. These FDI’s were a source of employment for its population. The country also embarked into major construction projects in the 1970s and ’80s which provided the infrastructure needed for further growth. Hong Kong is, however, under transition due to the Hong Kong Security law that proposes more control from mainland China.

Taiwan

Taiwan economy growth in the 1960s was as a result of land reforms that generated a market for the agriculture sector. The increase of foreign investment, mainly TNCs due to its proximity to the Chinese market also led to the country’s industrialisation. Most of the companies in Taiwan in the 1960s and 1970s produced light manufactures like footwear, textile and small appliances, but they later moved to the manufacturing of electronics such as television sets, radios and computers. By mid-1980s Taiwan was one of the World’s leading computer and peripherals manufacturers. The policy of import substitution also contributed to the growth by providing a market for its budding industries.

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