International Political Economy of East Asia
The countries of East Asia are usually called by researchers as newly industrialized countries. These countries have suffered significant economic, social and political problems after World War II. They were forced to rebuild national economies after collapse, having limited resources and serious challenges. The choice was to combine mechanisms of economic growth from the developed countries and national mentality. It has let the countries not only to overcome the consequences of the crisis, but to create the so-called ‘economic miracle’. From the moment of occurring, this ‘economic miracle’ has been an interesting topic for economists. The main steps that have let the countries under consideration overcome the consequences of the War are the following:
Significant investments in innovations and innovative character of development;
Attraction of foreign investments (for instance, Japan has attracted significant investments from the United States of America);
Development of human capital and informational economy;
Combination of national features with foreign, traditionally western, experience;
Cheap resources, including labor force;
Orientation on export and international markets;
Stable political situation and ability to predict the direction of development of society, etc.
The mentioned factors have been the key drivers for fast economic development of the East Asia countries in the recent years.
However, these factors have lost their force because of the following factors:
Growing value of labor force and, respectively, growth of price of exported products (as a result, they lost their competitiveness on international markets);
Stable of political situation has let to absence of flexibility of economic environment in the countries;
Fluctuations of conjuncture of international markets have increased instability of local financial markets;
Inflow of speculative capital has harmed financial systems of the countries under consideration;
Orientation mainly on export has let to imbalance in the industrial structure of national economies (some industries have suffered from lack of governmental attention), etc.
As a result of the mentioned factors the countries under consideration faced the economic and financial crisis of 1997-1998. They were forced to implement some innovations in the own economic models. Among these innovations the following ones may be pointed out: a new orientation on internal markets, entrance on new markets, investment in education, regulation of financial system, development of powerful local multinational companies (partners of government in stimulation of economic growth) and changes in overall political system, etc. In the end, the crisis has been overcome and the countries have reached a new stage of development, according to experts – postindustrial society. The whole this way – from ‘economic miracle’ to crisis and again to economic growth – is considered in the research paper. The secrets of successful development of the East Asian countries are analyzed. Also, some recommendations, related to the future economic policy, have been made.
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