Four Asian Tigers

Growth in per capita GDP in the tiger economies between 1960 and 2014[7]

Prior to the 1997 Asian financial crisis, the growth of the Four Asian Tiger economies (commonly referred to as "the Asian Miracle") has been attributed to export oriented policies and strong development policies. Unique to these economies were the sustained rapid growth and high levels of equal income distribution. A World Bank report suggests two development policies among others as sources for the Asian miracle: factor accumulation and macroeconomic management.[8]

The Hong Kong economy underwent industrialization with the development of a textile industry in the 1950s. By the 1960s, manufacturing in the British colony had expanded and diversified to include clothing, electronics, and plastics for export orientation.[9] Following Singapore's independence, the Economic Development Board formulated and implemented national economic strategies to promote the country's manufacturing sector.[10] Industrial estates were set up and foreign investment was attracted to the country with tax incentives. Meanwhile, Taiwan and South Korea began to industrialize in the mid-1960s with heavy government involvement including initiatives and policies. Both countries pursued export-oriented industrialization as in Hong Kong and Singapore.[11] The four countries were inspired by Japan's evident success, and they collectively pursued the same goal by investing in the same categories: infrastructure and education. They also benefited from foreign trade advantages that sets them apart from other countries, most significantly economic support from the United States; part of this is manifested in the proliferation of American electronic products in common households of the Four Tigers.

By the end of the 1960s, levels in physical and human capital in the four economies far exceeded other countries at similar levels of development. This subsequently led to a rapid growth in per capita income levels. While high investments were essential to their economic growth, the role of human capital was also important. Education in particular is cited as playing a major role in the Asian economic miracle. The levels of education enrollment in the Four Asian Tigers were higher than predicted given their level of income. By 1965, all four nations had achieved universal primary education.[8] South Korea in particular had achieved a secondary education enrollment rate of 88% by 1987.[8] There was also a notable decrease in the gap between male and female enrollments during the Asian miracle. Overall these advances in education allowed for high levels of literacy and cognitive skills.

Worlds regions by total wealth (in trillions USD), 2018

The creation of stable macroeconomic environments was the foundation upon which the Asian miracle was built. Each of the Four Asian Tiger states managed, to various degrees of success, three variables in: budget deficits, external debt and exchange rates. Each Tiger nation's budget deficits were kept within the limits of their financial limits, as to not destabilize the macro-economy. South Korea in particular had deficits lower than the OECD average in the 1980s. External debt was non-existent for Hong Kong, Singapore and Taiwan, as they did not borrow from abroad.[8] Although South Korea was the exception to this – its debt to GNP ratio was quite high during the period 1980–1985, it was sustained by the country's high level of exports. Exchange rates in the Four Asian Tiger nations had been changed from long-term fixed rate regimes to fixed-but-adjustable rate regimes with the occasional steep devaluation of managed floating rate regimes.[8] This active exchange rate management allowed the Four Tiger economies to avoid exchange rate appreciation and maintain a stable real exchange rate.

Export policies have been the de facto reason for the rise of these Four Asian Tiger economies. The approach taken has been different among the four nations. Hong Kong, and Singapore introduced trade regimes that were neoliberal in nature and encouraged free trade, while South Korea and Taiwan adopted mixed regimes that accommodated their own export industries. In Hong Kong and Singapore, due to small domestic markets, domestic prices were linked to international prices. South Korea and Taiwan introduced export incentives for the traded-goods sector. The governments of Singapore, South Korea and Taiwan also worked to promote specific exporting industries, which were termed as an export push strategy. All these policies helped these four nations to achieve a growth averaging 7.5% each year for three decades and as such they achieved developed country status.[12]

Dani Rodrik, economist at the John F. Kennedy School of Government at Harvard University, has in a number of studies argued that state intervention was important in the East Asian growth miracle.[13][5] He has argued "it is impossible to understand the East Asian growth miracle without appreciating the important role that government policy played in stimulating private investment".[5]

In 2018, the combined economy of the Four Asian Tigers constituted 3.46% of the world's economy with a total Gross domestic product (GDP) of 2,932 billion US dollars. The GDP in Hong Kong, Singapore, South Korea and Taiwan was worth 363.03 billion, 361.1 billion, 1,619.42 billion and 589.39 billion US dollars respectively in 2018, which represented 0.428%, 0.426%, 1.911% and 0.696% of the world economy. Together, their combined economy surpassed the United Kingdom's GDP of 3.34% of the world's economy some time in the mid 2010s.

• Skylines of the Four Tigers
• 
  Hong Kong
• 
  Seoul, South Korea
• 
  Singapore
• 
  Taipei, Taiwan

These four countries focused on investing heavily in their infrastructure as well as education to benefit their country through skilled workers and higher level jobs such as engineers and doctors. The policy was generally successful and helped develop the countries into more advanced and high-income industrialized developed countries. For example, all four countries have become global education centers with Singapore, Taiwan, South Korea and Hong Kong high school students scoring well on math and science exams such as the PISA exam and with Singaporean and Taiwanese students winning several medals in International Olympiads.

In relation to secondary / higher level educations, there are many prestigious colleges as in most developed countries. Notable schools include the National Taiwan University, Seoul National University, National University of Singapore, Nanyang Technological University and University of Hong Kong, Faculty of Dentistry, which as of 2017, was ranked as one of the top dental schools in the world.[16][17] All four countries have become leading financial centers and such, from multiple policies which focus on education.

The role of Confucianism has been used to explain the success of the Four Asian Tigers. This conclusion is similar to the Protestant work ethic theory in the West promoted by German sociologist Max Weber in his book The Protestant Ethic and the Spirit of Capitalism. The culture of Confucianism is said to have been compatible with industrialization because it valued stability, hard work, discipline, and loyalty and respect towards authority figures.[18] There is a significant influence of Confucianism on the corporate and political institutions of the Asian Tigers. Prime Minister of Singapore Lee Kuan Yew advocated Asian values as an alternative to the influence of Western culture in Asia.[19] This theory was not without its critics. There was a lack of mainland Chinese economic success during the same time frame as the Four Tigers, and yet China was the birthplace of Confucianism. During the May Fourth Movement of 1919, Confucianism was blamed for China's inability to compete with Western powers.[18]

In 1996, the economist Joseph Stiglitz pointed out that, ironically, "not that long ago, the Confucian heritage, with its emphasis on traditional values, was cited as an explanation for why these countries had not grown."[20]

• Ezra F. Vogel, The Four Little Dragons: The Spread of Industrialization in East Asia (Cambridge, Massachusetts: Harvard University Press, 1991).

• BBC report on the Asian Tigers in the aftermath of the 1997 Financial Crisis (includes map of the Asian Tigers)
• ASEAN tigers
• The Elephant at the Gate in China Economic Review