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The Asian Model: A Crisis Foretold?

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  • Singh, Ajit

Abstract

The East Asian countries achieved extraordinarily fast economic growth during the last four decades. Indeed, it would be no exaggeration to say that they represented the most successful case of rapid industrialisation and sustained economic growth in the history of mankind. An economy like South Korea’s was unequivocally industrially backward in the mid-1950s. Its per capita industrial output was at the time US$ 8 compared with US$ 7 for India and US$ 60 for Mexico. By mid 1990, the country was the fifth largest car producer in the world, the largest producer of DRAM microchips, and the home of the world’s most efficient steel industry. Its per capita income had increased from x dollars to nearly US$ 10,000 over a thirty-five year time span. The Korean story of fast industrialisation and technological catch up is by no means unique. The other three countries in the Gang of Four - Taiwan, Hong Kong and Singapore also achieved similar economic success. More recently, these four countries were followed by Malaysia, Thailand and Indonesia who also recorded sustained and rapid growth of per capita income. Significantly, these “miracle” countries not only expanded at a fast rate but they also did so without any worsening of income distribution. Their record of poverty reduction has been truly remarkable. As Professor Joseph Stiglitz, the World Bank’s Chief Economist, notes: “In 1975, six out of 10 Asians lived on less than $1 a day. In Indonesia, the absolute poverty rate was even higher. Today, two out of 10 East Asians are living in absolute poverty. Korea, Thailand and Malaysia have eliminated poverty and Indonesia is within striking distance of that goal. The USA and other western countries, which have also seen solid growth over the last 20 years but with little reduction in poverty rates, could well learn from the East Asian experience (Stiglitz, 1998).”

Suggested Citation

  • Singh, Ajit, 1998. "The Asian Model: A Crisis Foretold?," MPRA Paper 24683, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:24683
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    References listed on IDEAS

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    1. Masahiko Aoki, 2013. "Toward an Economic Model of the Japanese Firm," Chapters,in: Comparative Institutional Analysis, chapter 18, pages 315-341 Edward Elgar Publishing.
    2. Singh, Ajit, 1994. "Openness and the market friendly approach to development: Learning the right lessons from development experience," World Development, Elsevier, vol. 22(12), pages 1811-1823, December.
    3. Singh, A., 1997. "Liberalisation, the Stock Market and the Market for Corporate Control: A Bridge Too Far for the Indian Economy?," Accounting and Finance Discussion Papers 97-af35, Faculty of Economics, University of Cambridge.
    4. Ajit Singh, 1998. ""Asian Capitalism" and the Financial Crisis," SCEPA working paper series. SCEPA's main areas of research are macroeconomic policy, inequality and poverty, and globalization. 1998-15, Schwartz Center for Economic Policy Analysis (SCEPA), The New School.
    5. Amsden, Alice H. & Singh, Ajit, 1994. "The optimal degree of competition and dynamic efficiency in Japan and Korea," European Economic Review, Elsevier, vol. 38(3-4), pages 941-951, April.
    6. Steven Radelet & Jeffrey D. Sachs, 1998. "The East Asian Financial Crisis: Diagnosis, Remedies, Prospects," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 29(1), pages 1-90.
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    Citations

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    Cited by:

    1. Ajit Singh & Ann Zammit, 2006. "Corporate Governance, Crony Capitalism and Economic Crises: should the US business model replace the Asian way of "doing business"?," Corporate Governance: An International Review, Wiley Blackwell, vol. 14(4), pages 220-233, July.
    2. Ajit Singh, 2006. "Competition and Competition Policy in Emerging Markets: International and Developmental Dimensions," Chapters,in: Growth and Economic Development, chapter 12 Edward Elgar Publishing.
    3. Jack Glen & Kevin Lee & Ajit Singh, 2003. "Corporate profitability and the dynamics of competition in emerging markets: a time series analysis," Economic Journal, Royal Economic Society, vol. 113(491), pages 465-484, November.
    4. David Bailey & Helena Lenihan & Ajit Singh, 2009. "Lessons for African Economies from Irish and East Asian Industrial Policy," Journal of Industry, Competition and Trade, Springer, vol. 9(4), pages 357-382, December.
    5. Ajit Singh, 2003. "Corporate governance, corporate finance and stock markets in emerging countries," Working Papers wp258, Centre for Business Research, University of Cambridge.
    6. Singh, Ajit & Singh, Alaka & Weisse, Bruce, 2002. "Corporate Governance, Competetion, The new International Financial Architecture and Large Corporations in Emerging Markets," MPRA Paper 24305, University Library of Munich, Germany.
    7. Ajit Singh, 2003. "Competition, corporate governance and selection in emerging markets," Economic Journal, Royal Economic Society, vol. 113(491), pages 443-464, November.
    8. Korhonen, Iikka & Ledyaeva, Svetlana, 2010. "Trade linkages and macroeconomic effects of the price of oil," Energy Economics, Elsevier, vol. 32(4), pages 848-856, July.
    9. Singh, Ajit, 2003. "Corporate governance, the big business groups and the G-7 reform agenda: A critical analysis," MPRA Paper 24663, University Library of Munich, Germany.
    10. Abeysinghe, Tilak & Lu, Ding, 2003. "China as an economic powerhouse: Implications on its neighbors," China Economic Review, Elsevier, vol. 14(2), pages 164-185.

    More about this item

    Keywords

    Economic growth; Asia; Developing economies;

    JEL classification:

    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies
    • A1 - General Economics and Teaching - - General Economics

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