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Rise of the Asian Tigers in the 1980s: Causes and Effects

Paper Type: Free Essay Subject: Economics
Wordcount: 2199 words Published: 26th Jan 2018

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Examine the rise of the so-called Asian Tigers in the 1980s and its importance for regional economic development. Focus on one or two countries.

The following will thoroughly examine the rise of the so-called Asian Tigers in the 1980s, and its importance for the advancing of regional economic development within the Southeast region of Asia. The countries included within the term Asian Tiger had generally been poor and economically underdeveloped at the start of the immediate post-war period. The majority of the countries that would go on to form the so-called Asian Tigers were colonies, or had recently been colonies which had been ruled by Western powers such as Britain, or in the case of South Korea, by Japan. The so-called Asian Tigers were countries that by and large had substantial natural resources, were strategically well-placed, as well as having the potential of becoming wealthier, and eventually offering their populations higher standards of living. Although the governments of the nation states that make up the so-called Asian Tigers had originally acted independently of each other, the economic policies they pursued led to strong, even dynamic economic growth. Besides improving the economic position of each of the so-called Asian Tigers, their economic polices also arguably, had a high level of importance for regional economic development within the Southeast region taken as a whole. Although the countries that became the so-called Asian Tigers held various factors or policies in common with each other, this following examination will concentrate upon South Korea and Taiwan as the main examples to be evaluated, as well as analysed. In many respects the blueprint for the economic development of the countries that became the so-called Asian Tigers was provided by Japan, which had become one of the most prosperous and dynamic economies in the world by the 1970s.

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The term Asian Tigers itself was originally made up as a means to describe the high economic growth rates and increased degrees of economic development of countries within the Southeast and East Asia regions. When the term Asian Tigers came into widespread use it usually referred to Hong Kong, Japan, Singapore, alongside the two countries featured in this examination in more detail, South Korea, and Taiwan. Japanese development was faster than that of the other four original Asian Tigers. Britain influenced the economic policies of Hong Kong, as it remained a British colony until reverting back to Chinese control in 1997. Some studies of the Asian Tigers have also included Indonesia, Malaysia, Thailand, and although still officially a communist state, the Peoples’ Republic of China (Evans & Newnham, 1998 p. 36).

There are sound reasons as to why the governments of the countries within the Southeast and the Eastern regions of Asia decided to attempt to accelerate the rates of economic growth, as well as the depth of development within their domestic economies. Some of the reasons for striving to achieve sustainable high levels of economic growth and development, social and political motivations were also influential, even if not as paramount as economic factors. The objectives of the governments of the countries that became the so-called Asian Tigers were to modernise their national economies (Brown with Ainley, 2005 p. 157). The intention was to transform their national economies from being underdeveloped, to newly industrialised countries and eventually to become developed countries. Japan was probably the best role model for the governments of South Korea and Taiwan to copy or emulate (Bannock, Baxter and Davis, p.278). Japan had been economically, as well as physically devastated as a consequence of the Second World War, yet its post-war economic development was a remarkable example to attempt to copy (Hobsbawm, 1994, p.279). Japan, just like the countries of Western Europe had been helped to recover and develop economically courtesy of substantial funding from the United States. The Americans had been content to aid other countries to prevent the spread of Communism (Evans & Newnham, 1998, p.316). Aside from aid from foreign governments and money from private foreign investors, the governments of South Korea and Taiwan could use the Asian Development Bank, besides the International Monetary Fund and the World Bank to fund their economic development projects (Bannock, Baxter & Davis, 2003, p.10).

In some respects the governments of South Korea and Taiwan were able to take advantage of their countries respective geographic and strategic positions when they pursued economic development policies, which led to them being included amongst the so-called Asian Tigers. Perhaps the governments of South Korea and Taiwan would not have received so much foreign investment had it not been for the Civil War. South Korea in particular, was given substantial American assistance after the end of the Korean War which had caused a great deal of damage (Woodruff, 2005, p.255). The government of South Korea instigated successful strategies for economic growth and development in the aftermath of the Korean War ending. The agricultural sector was reformed, whilst the government actively promoted industrialisation, a process aided by high levels of investment, particularly from the United States and Japan (Tipton, 1998, 305). The Americans were keen for South Korea to have a strong economy to bolster the position of its regime, while Japan was the largest single investor in the country. The reason why industrialisation was successful in South Korea was the high quality of the products made there, as well as the skills of the South Korean workforce. Japanese companies also sited factories in South Korea, due to the skills and the productivity of its workers (Tipton, 1998 p. 426).

By the 1980s, South Korea had a strong economy with high growth, high productivity, advanced industries, and skilled workers. The combination of all of these factors meant that the country enjoyed dynamic economic growth, definitely entitling it to be included amongst the so-called Asian Tigers. Strong economic growth and development in South Korea arguably had an impact upon economic development in the Southeast and East Asia regions. The government of South Korea realised that unhindered and unrestricted trade, as well as investments would be in the best interests of all the countries within the Asia-Pacific area. After all South Korea was one of the so-called Asian Tigers in the 1980s that were successful due to extensive trade with the United States, Japan, and its neighbours (Tipton, 1998 p.427).

Taiwan was another country that was included in the group of nations dubbed the Asian Tigers, due to a sustained period of dynamic economic growth and also rapid economic development. Taiwan had actually been part of China prior to the Communist take over of the Chinese mainland in 1949. The remnants of the Nationalist fled to Taiwan and went into exile. The anti-Communist stance of Taiwan’s government increased the chance of conflict with China. However, the threat of conflict with China also brought with it American military protection and financial assistance (Crystal, 2007 p. 339). Taiwan’s transition from an economically underdeveloped country towards becoming one of the so-called Asian Tigers began during the 1950s when the agricultural sector was made more efficient. Improved agricultural efficiency allowed more labour, material and financial resources to be used in a rapid industrialisation process (Tipton, 1998 p. 306). Taiwan was able to finance much of the industrialisation process through the increased exports of agricultural products and later the proceeds of selling industrial goods. The dynamic economic growth and impressive economic development was assisted by the diversity of the industries set up, which ranged from heavy industry such as steel, through to the manufacture of electronic components and consumer goods (Whitaker’s 2007 p. 1015).

The government of Taiwan, with the private sector having little influence over decision-making controlled the initial moves towards the industrialisation and also the modernisation of the economy. As with South Korea and the other so-called Asian Tigers, trade was of vital importance to the success of the industrialisation and also the modernisation of the economy, as without trade economic growth and development would have occurred slowly if at all. Exports helped to pay for new factories, new machinery, besides raising levels of economic growth. In turn new factories and new machinery meant that Taiwan increased its productivity levels, and was then able to export more goods and products abroad. Higher export revenues greatly assisted the transformation of Taiwan into being a newly industrialised country, as well as subsequent progress towards being a fully developed country (Brown with Ainley, 2005 p. 157).

The government of Taiwan changed its approach to achieving high levels of economic growth and development during the 1970s, allowing the private sector and foreign investment to have a much more pronounced influence over decision-making (Crystal, 2007 p. 339). Economic liberalisation would prove to be a precursor for both the democratization of Taiwan, and with efforts to strengthen trade links with other countries in the region (Tipton, 1998 p. 430). Economic growth rates remained impressively high throughout the 1980s, and could have been even better but for widespread corruption (Woodruff, 2005 p. 372). The maintaining of strong trading links, the improvement of other areas of trade, alongside attracting substantial foreign investments kept Taiwan’s economic growth and development as impressive as ever during the 1980s. Taiwan’s government however, along with other governments within the region regarded the expansion of trade within the region as being vital for the continuation of both economic growth and development (Tipton, 1998 p. 429). Trade with Hong Kong, Japan, Singapore, and South Korea also assisted regional economic development as a whole, and not just within each individual country. Trade between the so-called Asian Tigers stimulated all of their economies to the mutual benefit of them all. Trade with other countries such as the United States, China, Australia, and Russia was also considered to be important for the economic development of the region (Bannock, Baxter, & Davis, 2003 p. 36). In 1989, the so-called Asian Tigers were amongst the founding members of the Asia Pacific Economic Co-operation organisation, an organisation which was intended to boost trade between all of its member states and thus provide further stimulus for regional economic development (Bannock, Baxter, & Davis, 2003 p.10).

Therefore, the so-called Asian Tigers were able to achieve high rates of economic growth and development through the economic policies adopted by their respective governments. The governments of South Korea and Taiwan at first played a prominent role in promoting economic growth and development in their countries. Taiwan had been a largely agriculture island of little significance until the former Nationalist government of China fled there. The South Korean government had the task of reconstructing its country after the Korean War. Both countries reformed their agricultural sectors as a means of funding industrialisation and modernisation programmes. To a degree both countries were also helped by American aid, especially South Korea due to their strategic locations during the Cold War. Trade was a vital stimulation for the high economic growth and development experienced by South Korea and Taiwan, particularly that with the other so-called Asian Tigers and with the United States. Trade generated wealth, and it also stimulated foreign investment into all of the so-called Asian Tigers. Contact with other countries also had the unintended effect of promoting economic and political reform in South Korea and Taiwan. Both countries were keen to promote trade further, as demonstrated by joining the Asia Pacific Economic Co-operation organization. Over all the entire link between increased economic growth and development within the so-called Asian Tigers and the improvement of the regional economic development, as a whole is strong.


Brown C, with Ainley K, (2005) Understanding International Relations 3rd edition, Palgrave, Basingstoke

Crystal D, (2007) The Penguin Factfinder, Penguin, London

Evans G & Newnham J, (1998) The Penguin Dictionary of International Relations, Penguin, London

Hobsbawm, E (1994) Age of Extremes, the Short Twentieth Century 1914-1991, Michael Joseph, London

Tipton F B, (1998) The Rise of Asia, Economics, Society and Politics in Contemporary Asia, MacMillan, Basingstoke

Whitaker’s (2007) Whitaker’s Almanack – Today’s world in one volume, A & C, London

Woodruff W, (2005) A Concise History of the Modern World, Abacus, London


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