The Four Tigers of Asia

Between 1945 and 1990 the Tigers emerged in Southeast Asia, in the context of the Cold War. These countries namely South Korea, Hong Kong, Taiwan, and Singapore have developed so gradually in terms of quality, quantity and low price on their products reaching international markets. In the mid-1950s they pointed to the alternative technological advances and import policies, then export-oriented. Soon, the Southeast Asian countries favored foreign capital investment thus leading to the resurgence of the economy, given that these companies should promote national interests, the competitiveness, and expectations of local businesses. To realize the magnitude of this legacy is important to conduct a brief analysis of each of these four tigers. 

South Korea 

Historical Review 

Japan dominated Korea for over 35 years. South Korea emerged as an independent state in 1948 after the end of World War II, at which time there was splitting the Korean peninsula, attributing the north to the Union of Soviet Republics (USSR) and south to the US. UU. Between 1945 and 1948 South Korea was led by a US military government. In 1948 a presidential system led by Dr. Rhee was established. Between 1950 and 1953 there was a civil war in Korea. In 1961 a military coup ended the presidential system implanted a ministerial cabinet. Since 1961 South Korea lived under the military dictatorship of General Park Chung Hee (1961-1979) and General Chun Doo Hwan (1980-1988). The end of the military dictatorship was in 1987 by strong pressure from the abundant internal manifestations and major international coercion that resulted in a constitutional reform and call for presidential elections (Chia et al., 2007). The first democratically elected President Roh Tae Woo. One of the key points of Korean politics remains the possible reunification with North Korea. 

Economic Development 

Economic development of South Korea is based on the agrarian reform was carried out from 1947 to 1952. The reform began with the distribution of land by Japanese landowners by placing a limit on the size of the property (maximum 3 hectares). This reform virtually eliminated the tenants of the field, which brought the peasants were owners their land. Reaching that if 48.9% of those who tilled the land were tenants in 1945, in 1952, this percentage was between 5% and 7%. During the 50s', South Korea had relatively high rates of economic growth. This development was advocated industrialization oriented towards the domestic market that the country experienced. The identified by the intensive use of labor, with relatively little capital, such as textiles, furniture, food processing, etc., the light industry grew to meet the domestic market. The population grew from 20.18 million in 1949 to 23.33 million in 1958 to 30.13 million in 1967 to 37.43 million in 1980 to 45.5 million in 1997 and more than 48 million from 2006. After World War II, the country and its industry benefited from US financial aid he gave them, this economic aid accounted for a third of the country's budget, funding 85% of imports and 75% of fixed capital formation; In short, 8% of GNP. The industry grew, and the country's infrastructure began to recover. 

By early 1960 the country faces difficulties in its economy because its industry had already reached a limit and economic aid that the US was giving them soon end. South Korea does not have to export raw materials and should continue to pay for their food imports, inputs and capital goods for their industry continued to grow. The country and its industry face the need to earn foreign exchange and grow from the outside. Park Chung Hee and his new military government in 1961 began a new development strategy of the country. The industry is oriented to the outside, where the market is unlimited. Thus, through manufacturing exports, the country will earn foreign exchange and resources needed for your industry continue to grow. However, this requires that products exported abroad are competitive and the most competitive resource that is labor. It is decided by the export of goods of light industry and assembly industries that make intensive use of labor. For this, the government decided to take a series of measures to support the sector. This is part of the "five-year economic plans" that the government begins to establish since 1962. 

The industrial policy provides for: 

- The export financing and training the law of industrial parks for the export industry. These laws define which industries are considered export to give favorable financing through low-interest rates. It is establishing the Organization for Export Promotion (KOTRA). 

- Industrial infrastructure expands through the establishment of communication routes, port construction and hydroelectric. 

- Laws to conquer foreign investment to finance exports. 

These measures aimed to create a favorable environment for the light industry is oriented towards the external market. To be able to execute loans at low-interest rates to exporters so they could finance their production and producers receive more won for every dollar earned by their exports. 

Evidence shows that the process of development of South Korea has been based not so much on the laissez-faire but rather in the formulation and effective implementation of well-articulated government policy. Its success has been the result-oriented macroeconomic policies achieve stability and promote savings and investment, combined with specific microeconomic incentives with varying levels of selectivity based on commercial, industrial and technological policies (Paldam, 2003). South Korea imported 42.5 billion dollars in September 2012. 

Historically, from 1965 to 2012, the average South Korean imports have been of 9567.16 million reaching a record high of 45566.00 million in March 2011 and the lowest of 38.60 million in January 1966. South Korea imports mainly machinery, electronic products and electronic equipment, oil, steel, transport equipment, organic chemicals, and plastics. Its main import partners are China, Japan, the United States, European Union and Saudi Arabia. 

HONG KONG 

Historical Review 

Hong Kong was acquired from China by Britain in three stages: the island of Hong Kong, by the Treaty of Nanking of 1842 (Treaty imposed on China after England won the "Opium War" of 1839-1842); Kowloon Peninsula, the 1860 Beijing Convention (Treaty signed after the Chinese capital was attacked by foreign forces, including England and legalizing the opium trade in China); New Territories and in an area adjacent to the Chinese mainland Kowloon and 235 other small islands adjacent by rent for 99 years under a Second Convention of Beijing 1898. Just the term of this rental was 99 years fulfilled in 1997; resulting in the return to Chinese administration on the part of its territory until then occupied by England. The specific date of the 1st. July 1997 was agreed in a joint statement that China and England made in December 1984 and was ratified in May 1985. Hong Kong when being occupied by England was only a piece of land with some fishing villages. Its geographical position in the center of the British Empire in East Asia and gateway to China made it a strategic place for England who developed it as a bastion to penetrate the vast Chinese market. 

Hong Kong's population was affected in its economic development during the years of the Japanese occupation from 1941 to 1945. During this time dropped from 1.94 million in 1941 to 0.65 million in 1945. With the civil war in China, intensified from 1945 to 1949, the population of Hong Kong increased again, especially after the 1949 communist victory in China. More than a million refugees left China and settled in Hong Kong at the end of the civil war and the victory of Mao Zedong in China. In 1949 the population of the island reached 1.86 million people. In 1950 the Korean War occurs and as a result of support from China to North Korea invaded South Korea, the United Nations imposed an economic embargo on China. This severely affected Hong Kong, whose economy was largely dependent on trade with China. For example, early in 1951 36.2% of Hong Kong's exports went to China, later this year the figure was reduced to 1%. 

Economic Development 

The economic embargo of the United Nations to cut China Hong Kong's participation as an intermediary of trade between China and the West and also because this country adopts a policy of economic self-sufficiency and diverts trade with the West toward the Soviet Union. Thus Hong Kong is forced to take the path of industrialization. To industrialize the country had several factors in its favor: 

- the abundant labor result of the mass immigration of refugees from China after the triumph of communism cheap labor willing to work for any wage, and without the assistance of a union. 

- capital and knowledge acquired by the textile industry in Shanghai, until 1949 center of the largest textile industry in Asia after Japan, moved to Hong Kong from China after the triumph of communism in that country (especially mills cotton mills ). 

- the existing bank capital in Hong Kong also invested in creating a manufacturing industry. 

The development of light industry intensive labor, the most abundant resource on the island was the beginning of industrialization. Thus, in the 1950s it develops and expands the textile and starts exporting since, for it were competitive (since the time of Shanghai) plus the domestic market in Hong Kong was small. In the 60s exports are toys, shoes, plastic products. It is just as simple, labor-intensive and with little capital as plastic products, some of the richest men in Hong Kong started their business products. For example, Li Ka-shing, the richest of them, one of whose companies, Hutchison Whampoa Ltd., had sales of 4'531 million in 1995 and the combined companies sold twice that amount in the same year, In the '70s in Hong Kong watches, fine clothing, electrical and electronic products it manufactures. Hong Kong's industrialization progresses rapidly, adding increasing value added to the products it exports. So, it is going to export capital-intensive products in the 80s exports machinery and equipment. 

In addition to exporting own products manufactured in the country, Hong Kong re-exports imported products, which only adds some value added. It is currently estimated that 80% of the total exports of Hong Kong, are re-exports and 57.6% of re-exports are products from China. Hong Kong embraces the new economy, Tess White. In less than a year, the economy of Hong Kong has shifted its focus from business calls "bricks and mortar" that have dominated the Hang Seng stock index, the new technologies, and point for many years to come. Before the Asian financial crisis made prices fall real estate more than 50%, investors speculating in the local property market (Steven et al., 2001). Until very recently, Hong Kong people were investors satisfied doing the same with the new initiatives on the Internet. 

TAIWAN 

Historical Review 

When he was defeated on the mainland the Kuomintang nationalist party in 1949, this took refuge on the island since Taiwan had lived under an authoritarian one-party rule, which lasted until 1987, when martial law was lifted. In 1949 first thing they did was to undertake a nationalist agrarian reform program, which lasted until 1952. The program promoted social and political stability and increased agricultural production. Most agricultural production provided product to export and earn foreign exchange for the importation of machinery, equipment, and industrial inputs. This in turn served to enable rapid development after export-led. 

In 1968, China began some political opening; this was stopped when Taiwan was expelled from the UN in 1971, along with the severance of diplomatic relations with the US and Japan, which recognized the People's Republic of China. 

Upon arrival on the nationalist island lived a war economy with product shortages, low agricultural and industrial production, as well as hyperinflation. One task was to create an environment of economic stability and to overcome inflation this was vital. A new currency unit, the Taiwanese dollar, equivalent to 40 000 units of the old currency is implanted. 

Additionally, the government nationalized the factories left by the Japanese. 

Economic Development 

Towards the end of the 60s' manufactures replace primary products in the export basket (75% of total) and industry, with 35% of participation, displaced agriculture as the major component of GNP. The aim of the Taiwanese government from to 1981, was to continue the policy of promoting exports and encourage domestic industry to replace imports. Especially it seeks to replace imported inputs used in the industry, through the establishment of public companies in the basic industry or the call key as petrochemicals, steel industry, and boats. The development of heavy industry, protecting it from foreign competition is encouraged. Taiwan to become less dependent on foreign seeks to consolidate the development of heavy, capital-intensive industry, for that required a second stage of import substitution. The government, through its public enterprises, undertakes the task so that Taiwan can continue their economic development and meet the challenge of other countries where labor is cheaper labor, and could no longer rely on intensive labor. Progress was needed in industrial development, higher value-added products. In the 70s, the rapid development made the existing infrastructure could not support this process so that the government undertakes ten major projects at a total cost of US $ 8000 million in improving the infrastructure. 

The government creates the Industrial Park of Science and Technology Hsinchu, to promote the development of high-tech industries in the fields of information, biotechnology, electro-optics, precision instruments and machinery in environmental technology, etc. In 1984 the government provided tax incentives for companies to devote a higher their income to research and development percentage. Industries then begin to diversify and improve their production techniques. The government encourages the establishment of joint ventures and review university curricula to strengthen education in science, mathematics, engineering, and computing. It is achieved recruit highly skilled foreign labor by offering competitive Chinese residents living abroad wages. Then the government launched 14 major new projects to improve the infrastructure the island with the expansion of energy networks, telecommunications, transport routes and the development of water resources (Masina, 2012). National parks are built. All this investment demand tens of millions of dollars. Also for more funds from abroad, increased foreign investment is supported by eliminating restrictions and opening up the service to foreign capital in 1986 sector. Because successive trade surpluses Taiwan against its major partners, its financial system, and the Taiwanese dollar demand begins to revalue since 1986. That year, a dollar was exchanged for $ 37.8 Taiwan, but in 1989 is trading at 26.4. Wages also go up, and companies begin to invest abroad. In the 90s the country has a high GDP per capita of its population and increasing demands of the international community to the island open its market and comply with the rules of the international economy. Domestic demand starts playing a growing role in the economic development of Taiwan. The new situation in Taiwan of a more democratic society makes economic plans from 1990 to 1993 and the National Plan of Building 6 years from 1991 to 1996 take into account, more demands by the population and that lends more attention to environmental care, neglected by concerns on economic growth. 

The financial market begins to liberalize the removal of controls on interest rates for loans and savings deposits and liberalization in the management of foreign exchange since 1989. In 1992 the establishment of private banks was allowed. It also begins to privatize some public companies through the sale of shares. The Plan for National Development in the next century aims to strengthen national competitiveness, improve the quality of life of the population and promote sustainable development. Following the Asian crisis that erupted in 1997, the government introduced measures to stimulate domestic demand, improve the environment to promote more investment and develop Taiwan as a regional operations center for the Asia Pacific domestic and foreign companies. Taiwan was found prepared for the Asian crisis along with China; they are the only economies that have not had a slowdown in their economies in 1998. Unlike its economic development has increased. 

SINGAPORE 

Historical Review 

Singapore was a British colony since World War II until 1959 when the first elections to achieve self-government were held. 1963 Singapore joined the Federation Malay States, but political differences separated in 1965, becoming, an independent republic. This country has a unicameral parliamentary system, that is, the President directed the head of state, elected by parliament for five years, although their functions are the only representative. Since independence, Singapore has always had the same ruling party, the PAP (People's Action Party). His government has been quite authoritarian and fairly limited freedoms particularly ideological. Political liberalization since 1990 began to accelerate in 1991 in Parliament was passed a reform of the constitution to grant more powers to the presidency of the republic. The fall of the ruling party in the last election made liberalization curb. 

Economic Development 

From 1960 to 1965 Singapore maintained a policy of import substitution industrialization (ISI) as produced for the domestic market but to market Malaya (which he formed with Malaysia in 1963). Nevertheless, because of ethnic and political conflicts 1965 the Federation is terminated, and the island becomes independent. After that Singapore applies a defined policy export-oriented Industrialization (EOI). But when the military base of England withdrew its economy declines because of its 30 000 employees contributed about 20% of GDP. Singapore understood that to produce in foreign markets is needed to have a competitive industry and this required: 

- Attract foreign investment, 

- Sort your labor system, 

- Create the necessary infrastructure. 

A decisive factor that helps explain the high savings rate in Singapore (51% of GDP in 1997, the highest in the world) is the term of the Central Capital Fund (CPF). Originally a Pension Fund that its inception in 1955, required the employer contribution and employee equivalent to 5% of total wages. In 1979 this rate rose to 25% for each. In 1985, given the difficulties of the economy and to help entrepreneurs the government temporarily reduced the rate paid by the employer 25% to 10%.In 1994 the rate was set at 18% for the employer and 22% for the employee, overall 40%. This fund, which is deducted from the salary goes to the government that manages and uses it to build houses, among other things. Since 1980 this fund is used as a health insurance and to purchase shares of public companies that are being privatized. The Asian crisis unleashed in 1997 also affected Singapore. Its economy grew by only 1.5% in 1998. The economy of this small country was affected due to more than 50% traded with other Asian countries in trouble. Singapore has almost no major problems, such as a current account deficit in 1997 had rather a surplus of 15.6% of GDP. Nor has a fiscal deficit (had a surplus of 3.3% of GDP in 1997). However, the fact of being located in a region in trouble, it is affecting him. 

In conclusion, the four Asian economies called "tigers or dragons of Asia" stand out for its spectacular economic growth and high rates of development and industrialization. These have achieved an impressive progress in recent decades thanks to high economic growth rates enabling them to integrate among the most advanced economies and appear at the top of the highest GDP per capita worldwide. The gross domestic product of the four countries in the nineties grew at an annual rate of 6.2% and achieved increased from the 2000s to 2010. According to the IMF, the GDP of the four tigers in 2010 increased an average of 8.5%. Highlights include the increase of 14.5% in Singapore and 10.8% in Taiwan. Figures that surpass strongly to Western countries since the economic crisis of 2008 there have improved. 

The four Asian Tigers have great economic success thanks to its position as a major financial entity, but also have many educational, private and public institutions as well as domestic and foreign (Sarkar & El Sawy, 2003). The large export capacity is another factor in its success. Hong Kong and Singapore and gambled to internationalize their trade for years and seaports are among the most important in the world. The good economic situation in the four countries is due to the low unemployment rate for 2011 reached figures below 4%. Industrial growth in these countries is based on these factors: 

• Dynamic agriculture in South Korea and Taiwan contributed to the expansion of the industry: the agrarian reforms of the late 40's and early 50 created a structure of small landowners, boosting the primary sector and providing capital, labor, and food cheaply to the industry. 

• A considerable surge of foreign capital during the decades of the 40s and 50s, in the form of aid for the difficult geopolitical situation in Korea and Taiwan in the 60s', through direct investment, especially in Singapore, and international bank loans and commercial loans, whose good administration has made it possible for a country like South Korea avoid the debt trap. 

• A strong and determined state intervention in the economy, except Hong Kong, the Tigers have not only protected their "infant industries" allowing their growth and consolidation, using the protection of the domestic market and apparatus external sectors and as a mechanism to encourage its international competitiveness. Through strong fiscal, trade, financial incentives, etc. have boosted the export and allowed higher selling prices in the domestic market activity, thus, be able to sell at competitive prices in the international market. 

• The highlight of the dragons is that the export sector has been used as an instrument of industrialization, which has based their expansion in the adaptation of foreign technology, new value-added products, and re-exports. 

South Korea has two large companies: Daewoo in the automotive industry and oil Sunkyong, Hong Kong is the most dynamic port in the world, Taiwan is important for the production of computers, Singapore is the first city in Asia for business. 

Briefly, the most important in the economic development of Asian dragons or tigers factors are: 

• Abundant and cheap labor. 

• Fiscal discipline. 

• Strong external surplus, which has led to pressure from the international community, calling for greater economic liberalization. 

• A growth strategy oriented outward. 

• Most public intervention in the economy. 

• Selective support industrial development, with differences according to economies through investment support, subsidies, export subsidies and other discriminatory measures. 

• Realistic exchange rate and interest rate determined by the market. 

References 

Chia, H. B., Egri, C. P., Ralston, D. A., Fu, P. P., Kuo, M. H. C., Lee, C. H., ... & Moon, Y. L. (2007). Four tigers and the dragon: Values differences, similarities, and consensus.  Asia Pacific Journal of Management ,  24 (3), 305-320. 

Masina, P. (2012).  Rethinking development in East Asia: from illusory miracle to the economic crisis : Routledge. 

Paldam, M. (2003). Economic freedom and the success of the Asian tigers: an essay on the controversy.  European Journal of Political Economy ,  19 (3), 453-477. 

Sarkar, M. E., & El Sawy, O. A. (2003). The four tigers of global e-business infrastructure: Strategies and implications for emerging economies  Communications of the Association for Information Systems ,  12 (1), 1. 

Steven, R., Jeffrey, S., & Jong-Wha, L. (2001). The determinants and prospects of economic growth in Asia.  International Economic Journal ,  15 (3), 1-29.