Free «Asian Tigers» UK Essay Sample
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Economic growth is a major issue area within countries’ economies. It is illustrated clearly by the efforts that governments make in a bid to enhance economic growth. Lin (12) defines economic growth as an increase in the production level of an economy. During the 1960s, the rapid economic growth witnessed in the Asian Tigers proved to be spectacular and amazing. In the process, the economic expansion attracted widespread attention from various quotas including the academic fraternity in an attempt to explain the phenomenon. In a bid to understand the expansion, various factors were presented as being behind the development. The most successful economies in the region were South Korea, Singapore, Hong Kong, and Taiwan (Krugman). The existence of many works explaining the progress in the Asian Tigers is healthy although it complicates matters for those interested in tracing the factors that accounted for the rapid growth. Exploring the topic is worthwhile since the Asian Tigers have failed to match the rapid progress realized during the time.
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It is noted that since the 1960s, Asia has progressed and become richer compared to any other region in the world. Despite the overall growth, it is erroneous to assume that the development has taken place universally within the region. In particular, the western area of Asia experienced growth rates similar to those in other parts of the world. However, the eastern part (China, Hong Kong, Japan, Korea, Indonesia, Malaysia, Singapore, Taiwan, the Philippines and Thailand) registered trademark development rarely matched by other countries of the world (Krugman). The most impressive growth rates were experienced in Hong Kong, Singapore, Korea and Taiwan, famously referred to as the ‘Four Tigers’. The four countries had an average growth rate of about six percent each year. Sustaining such rates of growth for roughly thirty years is in itself a major achievement.
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According to DuBois (227–228), the rapid growth within the Asian economies remains is still a subject of debate. The author states that some observers base their positions on theoretical standpoints in assessing the economic progress. In accounting for the economic growth, three factors are presented as the primary contributors. They include technology, capital and labor. Collectively, labor and capital account as factors of production. When discussing labor, contextualizing the labor force of the countries involved is particularly important. On the other hand, when referring to capital, the central issue is the machinery or equipment such as vehicles, machines or buildings applied in the production process. The labor force employs capital in the process of producing goods and delivering services. Regarding technology, reference is made to the methods used by the labor force in applying capital in the process of production. Technology depends on developing and acquiring practical skills which are critical for the completion of various tasks in an efficient and effective manner in the production process. For an economy to register significant growth as in the case of the Asian Tigers, the above elements must be present. However, it remains debatable how technology bears on the other factors in the growth process. It is believed sometimes that an increase in the use of labor with capital may explain the growth, although other observers hold that efficient use of technology is the most critical factor in the growth process.
Lin (107) observed that, for an economy to sustain growth for longer spells, technological progress must be present. The main argument is that the participation of labor in the production process contributes to economic progress but cannot be sustained for long. It is also held that when growth in capital outweighs growth in labor, the possibility of realizing diminishing returns on capital increases leading to a decline in output. Hence, a continuous increase in capital does not guarantee sustained economic development. On that basis, achieving continuous growth requires constant improvement in technology since such guarantees intensive progress.
Comparison between Brazil and Singapore
The case of Brazil is often compared and contrased with that of Singapore. Brazil falls into the BRIC axis, which registered significant growth in the recent times. The country’s economy was driven by presence of minerals and what economic analysts cited as robust economic policies (Furtado 34-45). However, the country has slumped in its economic performance. The decline in the economic performance has coincided with a fall in public services, an increase in corruption, mixed with excessive government spending on the upcoming World Cup preparations. Other observers cite the overdependence on the Chinese market as a major contributing factor to the decline of the Brazilian economy.
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When the Chinese demand for soy, which accounts for forty percent of Brazil’s exports, fell, the economy shrank markedly (Bellos 64). The decline is also attributable to a poor state of infrastructural development, increasing consumer debt and a slump in investor confidence. On the contrary, the case of Singapore offers some different highlights. After attaining independence in 1963, Singapore’s economy registered rapid economic growth (Bercuson 5). Thus, it is not surprising that the country’s GDP ranks highly globally. The Singaporean economy is deeply submerged in foreign trade encompassing port activities and export of refined oil and electronic products. The country’s free and competitive environment makes it one of the biggest beneficiaries of foreign direct investment across the world. Besides, Singapore is a global financial hub. Concisely, the growth of the Singaporean economy can be arguably said to have been premised on embracing globalization, which opened it for education and easy capital flow (Siddiqui 6-7). The country also adopted pragmatic policies which enhanced its economic performance.
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Facing a high degree of unemployment after the end of European colonialism, Singapore embarked on a comprehensive industrialization program (Long and Tan 104-126). The project focused on labor-intensive approaches. Being ill prepared for industrial activities, the country was forced to look beyond its borders for industrial progress. In a bid to attract foreign investors, Singapore offered safe, low taxation and corruption-free environment. The open-door policy adopted by Singapore facilitated rapid growth and economic expansion leading to the registration of high-level development.