Economic development

Economic development1The process of economic development in South-East Asian countries with different political, social and economic characteristics have been the subject of continuous evaluation.

The newly independent countries took a general view of socio-economic growth that apply to such varied national entities and appreciated the need to overcome identical economic problems through the creation of certain strategy and policy prerequisites for the growth of infra-regional economic cooperation.

After achieving independence, South-East Asian Tiger countries which include South Korea, Hongkong, Singapore, Taiwan, Malaysia, Thailand, Indonesia and Vietnam, directed their main efforts to gear up economic development. However, the low level of national productive forces, continuance of the operation of foreign capital in their economies and inherited colonial structure made the process difficult.

These countries. outlined series of socio-economic steps in their national economic development programmes to achieve an increased growth of production through industrialization and agrarian reforms. Along with mobilizing internal resources for the purpose, efforts were made to attract resources from outside, and in the process, their economic ties with the outside world were activated. So economic development is most essential.

The need to strengthen economic cooperation among the Tiger countries arose in the initial stages when each of them began working out strategic goals for their economic uplift, and effective ways of attaining these objectives. That stage of their national liberation was characterized by growing confidence of the newly free people in their creative capacity, and their ability to overcome the economic gap between them and the former colonial powers.

Within eight to ten years of independence, the share of infra-regional trade which is the best indicator of the level of economic interaction among the countries known as Asian Tigers was significantly large. This was about 30 per cent higher on an average.

Industrialization of the developing South-East Asian countries opened new areas of production and created possibilities of establishing mutually beneficial ties in the region which did not exist earlier. An international division and specialization of labour began to take shape and mutual economic relations underwent quantitative and qualitative changes. The structure of the regional trade was, for instance, transformed as a result of the gradual increase in the share of new industrial products.

With new branches of industry like machine building, instrument making, electronics and chemicals coming up, and the demand for raw materials and oil continuously growing in proportion to the pace of economic development in these countries, the share of mining and manufacturing industries in infra-regional exports rose to 43-45 per cent2 by the second half of the sixties from around 29-30 per cent3 in the beginning of sixties. Between 1950 and 1970 the total volume of intra-regional exports of the food stuffs and certain other consumer items rose by as much as 57 per cent. So economic development is most essential.

In 1960, the combined gross domestic product of the Asia Pacific countries was as low as 7.8 per cent of world GDP, by 1982 it had more than doubled to 16.4 per cent and since then the area’s growth rates have exceeded those of Europe and the United States by ever wider margins. It is likely to contain over 22 per cent5 of world GDP by the year 2000.

It is not surprising that the entire Pacific region which now possesses 43 per cent of the world’s GNP will enjoy a good 50 per cent of it by the year 2000. It is now evident that the center of world economic gravity is shifting rapidly towards Asia and the Pacific.

It is reasonable to expect that one of the better known global trends of today, i.e., the rise of the Asia Pacific region is likely to continue, simply because the same is so broad-based. It includes not only the economic power house of Japan, but also the immensely successful Asian newly industrializing countries like Taiwan, South

Korea, Hongkong and Singapore as well as the larger Association of Southeast Asian Nations (ASEAN) that includes Malaysia, Indonesia, Thailand and the Philippines’. Economic growth in this vast area has been stimulated by a happy combination of several factors, a spectacular rise in industrial productivity through export-oriented growth strategy based on increased foreign trade, improved shipping and financial services ; a marked move into the newer technologies as well as with a thrust for labour-intensive manufactures ; and a successful effort to increase agricultural output faster than population growth. Each success story of individual nation beneficially interacted with the others to produce a rate of economic expansion, never witnessed earlier in the region.

The South-East Asian Tiger countries’ strategy for economic development, right after achieving independence, was driven by a clear vision for the future. So economic development is most essential.

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