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The Mysterious Asian Miracle: What's the Secret to the Success of Hong Kong, Singapore, South Korea and Taiwan?
In the past few decades, the four countries of Hong Kong, Singapore, South Korea and Taiwan have been known as the "Four Asian Tigers" or the "Asian Miracle" for their rapid economic growth and industrialization process. The success of these regions has not only attracted global attention, but has also become a model for many developing countries. How, exactly, do these economies thrive in a competitive global marketplace?
The economic success of the Asian Tigers is based on export-oriented policies, investment in education and a stable macroeconomic environment.
Economic structure and the foundation of industrialization
From the 1950s to the 1990s, each of the Four Tigers experienced significant industrialization. Hong Kong's early economic transformation mainly relied on the textile industry, but by the 1960s, its manufacturing industry expanded to electronic products, plastics and other fields, and was especially export-oriented. After Singapore became independent, it formulated a number of policies through the Economic Development Board to promote the development of manufacturing and attract foreign investment inflows.
On the other hand, when Taiwan and South Korea started industrializing in the 1960s, their governments strongly intervened in the market. These countries also adopted an export-oriented industrialization strategy. Inspired by Japan's successful experience, the four countries not only actively invest in infrastructure and education, but also receive economic support from the United States, further promoting the development of trade.
The popularization of education and high levels of educational attainment have a decisive impact on the economic development of the Four Tigers.
Education and the creation of human capital
The Four Tigers’ heavy resource investment in education has essentially laid a solid foundation for their economic growth. According to the report, all four countries achieved universal basic education before 1965, especially South Korea, which had a secondary school enrollment rate of 88% in 1987.
This high education penetration rate has significantly improved the literacy rate and cognitive skills of the Four Tigers, providing a large number of high-quality labor for all walks of life, and promoting the development of science and technology and industry.
Stable macroeconomic environment
A stable macroeconomic environment is a major factor in the success of the Four Tigers. These countries all focus on controlling budget deficits and external debt. In particular, Hong Kong, Singapore and Taiwan have almost no burden on external debt. Although South Korea's foreign debt is relatively high, it is able to sustain it due to its strong export capabilities.
Sound foreign exchange policy and flexible exchange rate management enable the Four Tigers to withstand economic storms and maintain competitiveness.
Facing the 1997 Asian Financial Crisis
Although the Four Tigers achieved significant growth in the 1990s, the 1997 Asian financial crisis hit these economies hard. Among them, South Korea has been particularly severely affected, with the emerging foreign debt pressure causing its currency to depreciate by as much as 50%.
However, the Four Tigers had strong recovery capabilities and eventually rebounded quickly from the crisis, thanks to their higher savings rates and openness to trade.
The impact of the 2008 financial crisis
Subsequently, the financial crisis in 2008 once again impacted the Four Tigers. Export-oriented economies, driven by U.S. consumption, experienced an average GDP decline of 15% during this period. However, fiscal stimulus policies from various governments and low household debt have allowed the Tigers to rebound strongly during the recovery process.
The resilience of the Four Tigers economies lies in their flexible response measures, showing the potential for stability and growth.
The influence of culture and social structure
Confucian culture played an important role in the success of the Four Tigers. Diligence, discipline and respect for authority promoted by Confucianism are often regarded as the cultural basis for economic growth. The Asian values advocated by Singaporean Prime Minister Lee Kuan Yew provide support for this theory, although this view has also attracted many doubts.
Inspiration from success
The economic miracle of the Four Tigers is not only the combination of policies and systems, but also the result of the profound influence of cultural factors. Their development experience provides examples worth learning for other countries in pursuing the path of economic growth; however, as the global economic landscape changes, what is the future path?
