The Asian newly industrialized economies (NIE’s), namely Hong Kong, South Korea, Singapore and Taiwan are attracting world-wide attention for five layers of reasons:
1. There is quasi-unanimity in recognizing them as success stories in industrial development and economic growth.
2. They constitute an implicit, if not yet fully articulated challenge to less performing countries and regions, such as the Soviet Union and Latin America. They are recognized by some, but by no means all members of the academic community, as part of a new Pacific power center with Japan as its center and in potential competition with the North American, Soviet and Western European power centers in an increasingly multipolar world.
Inevitably, the question arises what precisely these “four tigers” have in common to explain such an outstanding performance. Just to put their performance in perspective, let look at the following figures:
· The Asian NIEs averaged yearly growth rates of 10 % from 1965 to 1973, just above Japan’s rate and more than double that of all other OECD countries.
· The average for the following fourteen years from 1973 to 1987 during which growth rates everywhere declined drastically, still reached 7,7 %, two times that of Japan and three times that of the OECD as a whole.
· In 1987 the Four achieved a combined current account surplus of US $ 30 billion contrasting starkly with the US $ 5 billion deficit of the EC without Germany’s US $ 45 billion surplus.
· Their share of world trade in manufactured goods increased from 4 % in 1975 to 11 % in 1987, just short of the share of each of the three leaders in world exports, the US, West Germany and Japan.
The political culture in question is no doubt distinguished by three features:
1. A comparative strength of the traditional family;
2. A basically unquestioned vitality of the social function of religion, be it Buddhism, Confucianism or Christianity; dynamic fusions of corporatism, bureaucracy and capitalism casting doubt on Max Weber’s sociology of religion and suggesting the religious and ideological pluralism of the capitalist world.
3. Active government involvement in economic goal setting and a non-ideological acceptance of that role by private enterprises. On the scale of comparative intensity of government involvement, South Korea ranks without any doubt highest among the Four. 
The instruments vary
· From tariffs, non-tariff barriers and preferential access to credit and foreign exchange in Taiwan and Korea,
· to the establishment of state-owned enterprises in Singapore and Taiwan,
· and to technological support programs in Korea, Taiwan, and most recently, Hong Kong.
· There has been currency undervaluation and thus export promotion in all four countries over prolonged periods. The Asian NIEs have indeed protected their infant industries against imports from industrialised countries, but at the same time they have engaged wholeheartedly in exports of manufactured goods, even export-led macroeconomic growth on a massive scale. Their success is thus largely derived from participation in the world economy rather than from decoupling.
· Dynamic free market economy: theories of forced savings (securing from credit-creating banks or from the state the funds necessary to raid the circular flow of goods and services), investment, innovation and business cycle (active participation in the so-called “second industrial revolution” provoked by the application of microelectronics to commercial products marketed on a global scale) have all been put to practice in the Asian NIEs as in Japan by generalist businessmen, bankers and industrial policy- makers.
· Although the political regimes in power in the four countries just as in Japan are unmistakably conservative, they have developed a remarkable ability to prevent or diffuse the potential of social conflict inherent, according to almost any historical record, to processes of rapid industrialization. At the same time, the majority of them have manteined in the geopolitical sphere of the capitalist block during the Cold War, benefitting from the treaties and security of this alliance.
· Starting after World War II with few natural resources, abundance of cheap unskilled labour and little foreign currency in an environment determined by the East-West conflict and the Chinese and Korean partition, these four countries have resolutely engaged in a policy of export-led growth, as explained, in step with the expanding international trade. Since the late 1960s, they shifted their investments whenever international demand shifted. There was massive government targeting, and government demand, even in Hong Kong which next to Japan was one of the economic beneficiaries of the Korean and Vietnam wars. But such government guidance both led and followed the changes in the international division of labour under way on a global scale.
· The four Asian NIEs stand out for their adaptive achievements since the war. As the structure of international trade changed, so did the structure of NIEs’ exports: from transhipping activities to light manufacturing in textiles, toys, footwear and then electronics, in the case of Singapore and Hong Kong; from agrarian economy to heavy industry like steel, petrochemicals, shipbuilding, auto-making, mining, and up the ladder of added-value to ever more high tech components of the electronics industry in Korea and Taiwan. Exporters of all four countries have consistently endeavoured to invest in sectors with the highest growth potential globally.


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