Emerging Markets In Asia. Essay

1392 words - 6 pages

Emerging Markets in AsiaUniversity of PhoenixJanuary 8, 2004Emerging Markets in AsiaOver the past decade the world has witnessed rapid long-term economic growth for East Asian countries. These newly developing countries are experiencing growth rates in GDP between 6% and 7%, compared to the 2% to 3% for most industrial economies. If this growth continues, South Korea and Taiwan could take away America's distinction as the world's richest country. This rapid economic growth is a result of several economic and political factors. The current pace of economic growth, expanding trade and communications, and the investment in equipment and education have all played a role in the sudden rise of the East Asian economies.One primary factor that has spurred the long-term economic growth of South Korea and Taiwan is the pace of economic development. The pace has accelerated over time. As time progresses, countries seem to be able to grow at a much more rapid rate. South Korea was able to double its real income per head in an amazing 11 years from 1966 to 1977. It would seem that the later a country has developed, the faster it has been able to do so. Another important factor is the degree to which a country is behind the industrial leaders. In the case of the East Asian countries, South Korea and Taiwan, both started out with an extremely low income per head. This lag-time allowed much faster growth when learning from the leaders previous mistakes and successes. Another important issue is to realize that these growth rates should slow as the countries catch up.An area in which East Asia is investing much of its GDP is in capital equipment and education. Compared to the industrial leaders, the East Asian countries have sustained a much higher investment in these areas. South Korea invests 35% of its GDP back into industry, which is more than double America's capital spending. The East Asian countries have placed much emphasis on education. Education is the key to mastering the technology efforts, which they have been borrowing from the economic leaders of the world. The standards of education for these countries have improved as rapidly as their economies.Another factor, which has helped the long-term economic growth of these East Asian countries, is the global market. A country's economy is no longer hurt by a small domestic market. World trade has grown tremendously over the past few decades. Exports account for about 30% of South Korea's, and 40% of Taiwan's GDP. This growth in world trade has allowed technology to become more available today than in the past. The growth in international communications has helped spread new technology throughout the world.Vietnam was the latest among East Asia countries to emerge as a powerful developed country. However economic progress was retarded by presence of the Vietnam War during the 1960's and the 1970's. The war practically crippled the country's economy. Post-war rebuilding efforts have brought moderate success...

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