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Who are the Asian Tigers
South Korea
Taiwan
Hong-Kong
Singapore
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Watch the video and discuss the questions
1. Is this the perfect solution?
2. Will it work with all countries?
3. Will it work in today’s economic climate?
The Asian Tigers, however, went a different way. They used the following policies in their Development Strategy:
Emphasised the role of human capital. One of the prerequisite for any form of industrialisation is a well-educated workforce. In most East Asian countries, heavy emphasis states was laid on human capital development. For example, in Taiwan, during the crucial phase of early industrialisation, government spending on education rose from 8% of the total budget in 1952 to 18% in 1972.
Increased spending on health and housing. States played a key role in subsidising and expanding access to basic health care and housing. Singapore – in the 1980s it housed 80% of the population in subsidised owner occupied units built by the state housing development board. Health care access was universal and also heavily subsidised. Between 1972 and 1980 real per capita spending on health care rose by 90%.
Infrastructure was central in the development of industry. In Korea, nearly 25% of domestic investment in infrastructure between the years of 1963-1979 came from the public sector. Singapore, the state not only vastly expanded traditional infrastructure, it also provided low cost fully serviced factories available for the rapid establishment of new industrial ventures. In Hong Kong, government through its leasing arrangements made land available for industrial estates at a fraction of their market value.
Access to credit facilities – Selective credit and finance schemes were put in place. For instance, in Korea, interest rates were subsidised by as much as 75% on loans to exporters. In Taiwan, banks extended 75% of all loans to industries targeted by government planners.
Trade policy – At early stages of industrialisation ISI policies were instituted but, critically, these industries were threatened with the removal of protection if they did not begin exporting after a period of time. The Governments moved to under-value their currencies in order to support this.
