The Asian Tigers refer to the four high-growth economies of Hong Kong, Singapore, South Korea, and Taiwan. With the booming exports and rapid industrialization, these economies have turned out to be the most productive and profitable nations in Asia itself and the world, representing examples of excellence in the economy. However, the economic status of these countries was not always this way.
Understanding the Four Asian Tigers
The rise of the Four Asian Tigers became eminent in the 1960s due to developing technology and globalization. The tigers continuously achieved double-digit economic growth from the 1960s till the 1990s. One of the main reasons for their development was their export policies, as it remained the driving factor for these economies to becoming some of the richest in the world. As many people already know, Hong Kong and Singapore come under the most prominent financial hubs globally, while South Korea and Taiwan are among the top global manufacturing hubs for automobiles, electronic components, and computers. The common characteristic features of the Four Asian tigers include an educated population, high savings rate, and a focus on exports.
The rise of Hong Kong, Singapore, South Korea, and Taiwan as Asian Tigers is known as the East Asian Miracle. These economies’ growth can be attributed to effective economic policies, such as strategic policy formulation and strict national development policies. The uniqueness of the four Asian Tigers can be cited as having extremely fair income distribution and persistence in economic development.
According to a World Bank study, two growth strategies could be evidently seen as the driving factors behind the Asian miracle; one is macroeconomic management, and another is factor accumulation.
Hong Kong is a special administrative region (SAR) located in the Republic of China’s territory. The country’s SAR status indicates that it can exercise freedom over all its activities except for its defense until 2047. In 2047 the relationship between Hong Kong and China is set to be reassessed by them collectively. However, with the recent China takeover, it appears that this has come much faster than anticipated.
Hong Kong was the first of the four Asian tigers to take off in the 1950s. During this time, Hong Kong underwent industrialization with the expansion and development of the textile industry. By the 1960s, the region’s output production volume had grown significantly, and the electronics components, garments, and plastics had been started to be included for exports. Many medium and large size organizations saw Hong Kong as the attraction point for new business opportunities and expansion.
Some of the attractive factors were the cheap labor costs and favorable tax incentives comparatively in the global market. In this occurrence, Hong Kong witnessed mass city-wide construction (skyscrapers, public housing, and railway lines) from 1970 to 1980. Inevitably, this infrastructural boost helped the country become one of the world’s richest countries, with its mark remaining even till today.
From the 1960s to the 1990s, Hong Kong experienced tremendous economic growth, with the GDP increasing 180 times. Good governance, appropriate policy measures, strict rules, market mechanisms, and a lack of public debt have contributed to making Hong Kong one of the world’s wealthiest countries. In fact, even in December 2020, Hong Kong’s city was ranked (yet again) as the most expensive city in the world for ex-pats.
After Singapore was set free in 1965 from the British’s control, it started to take major steps and initiatives for development. National economic policies were brought and adopted by the Economic Development Board, which proved to be effective in boosting Singapore’s manufacturing sector. This Asian Tiger set up a wide range of industrial estates and even put tax incentives measures in place. These helped attract Foreign Direct Investments to a great extent.
Currently, Singapore falls on the list of the world’s foremost currency exchange centers. Being strategically located in Southeast Asia, Singapore has turned out to be a top trade hub globally, and the nation has the highest GDP out of all the four Asian Tigers.
Out of this list, South Korea remains one of the most surprising ‘Asian miracles’ that has made its mark in the modern era. As far back as the 1960s, South Korea counted among the list of the world’s poorest countries. However, in the period of 1960s to 2000s, the country has undergone significant economic development.
South Korea has multiplied its economic value by integrating electronics, information technology, and robotics industries. It has also followed the export-oriented policies of other Asian tigers regarding great growth in property and economy. According to a World Bank Report, the GDP of South Korea increased by 10% every year in the period of 1962 and 1995. At present, the nation comes under one of the topmost economies of Asia.
The island of Taiwan has flourished over the past several years, along with China’s unparalleled economic development. In the early 1960s, Taiwan underwent rapid industrialization and economic growth, which was called Taiwan Miracle. In the early 1990s, Taiwan became a multi-party democracy with a semi-presidential system from a one-party military dictatorship. Taiwan’s export-oriented economy received major contributions from steel, machinery, electronics, and chemical manufacturing.
Although the country only has a land area similar to that of the Netherlands, with a population of a bit over 23 million, it plays a large role in the international high-tech industry, ranking the world’s 25th-largest economy in 2009. Taiwanese firms targeted emerging markets in Southeast Asia, the Middle East, and Latin America. During the 1960s to 70s, Taiwan targeted Southeast Asian, the Middle East, and Latin American markets for their consumer electronics exports. During this time, the revenue gained helped the companies scale to tremendous heights, which allowed many companies to invest in better, more modern production equipment.
Though Taiwan is not the wealthiest Asian Tiger of the bunch, it has undergone remarkable economic progress and is still considered a developed country.
Prime examples of how to handle crises
These four Asian economies were hit hard by Global Financial Crisis in 2008. The GDP of all the Asian Tigers went down by an average annual rate of 15%. The exports sector also faced turmoil and was down by an annual rate of 50%. The decline in domestic demand, retail revenue had impacted many of these nations.
However, despite the challenges, the Asian Tigers have taken up strong recovery measures and recovered as much as possible. The reason behind the quick rebound in these regions could be seen in the effective government policies and programs. Today, in most global economic rankings, the top positions are held by the Asian Tigers.
With the recent coronavirus pandemic, these four countries and how they’ve responded to the virus have only consolidated their strength and role in the global world. While Taiwan has come out as the winning economy among the Four Asian Tigers post-pandemic era, countries like Korea are still considered some of the top nations in terms of how they’ve responded to the virus, being revered for their ability to manage COVID-19 well.
Even Singapore and Hong Kong have done a fair job at managing the virus, with many Western countries also looking at their ability to suppress the spread. In fact, there has been plenty to learn from the Asian tigers in how to handle the coronavirus.
The Asian Tigers, while affected by the crises that overcome our world, have time-and-time again shown their resilience, rising up to the challenge instead of faltering. These four nations continue to show growth in their economy and are prime spots for investment in real estate — although quite expensive.
Nevertheless, with more countries in Southeast Asia growing by the year, these four Asian Tigers, along with China, stand at the forefront, proving ever more so why the future truly is Asia.