The Economist - USA (2019-12-07)

TheEconomistDecember 7th 2019 3

T

hefourAsiantigers—HongKong,Singapore,SouthKoreaand
Taiwan—oncefascinatedtheeconomicworld.Fromtheearly
1960suntilthe1990s,theyregularlyachieveddouble-digitgrowth.
Agenerationthathadtoiledasfarmersandlabourerswatched
theirgrandchildrenbecomesomeofthemosteducatedpeopleon
theplanet.Thetigersstartedbymakingcottonshirts,plasticflow-
ersandblackwigs.Beforelong,theywereproducingmemory
chips,laptopsandequityderivatives.Intheprocesstheyalso
spawneda boisterousacademicdebateaboutthesourceoftheir
success.Someattributedittotheanvilofgovernmentdirection;
otherstothefurnaceofcompetitivemarkets.
Thentheworldturnedaway. TheAsianfinancialcrisisde-
stroyedtheirmystique.Chinabecamethenewdevelopmentstar,
evenif,toa certainextent,itfollowedtheirlead.Thetigersthem-
selvesseemedtolosetheirstride.ThisyearAmericaisontrackto
growmorequicklythanallfourofthem.
Theyallhaveseeminglyintractableproblems:stagnantwages
inTaiwan,thedominanceofbigbusinessinSouthKorea,anun-
derclassofcheapimportedworkersinSingaporeand,mostexplo-
sive,a governmentinHongKongthatwillnot,orcannot,listento
itspeople.
Butitisa mistaketowriteoffthetigers.Acloserlookattheir
economicrecordshowsthat,contrarytothegloomthatsome-
timespervadesthem,theyhavemuchtoboastabout.Thetrajec-
toryoftheirgdpperperson,calculatedatpurchasing-powerpari-
ty,hasremainedimpressive(seechartoverleaf ).Theyblewpast
thesupposedmiddle-incometraplongago.AndSouthKoreawill

soonbecomethefourthtigertoovertakeJapan,itsformerimperial

rulerandeconomicmentor.

TheyhavealsogainedgroundonAmerica.Singaporepassedit

inthe1990s;HongKongdrewlevelin2013;andtheothertwohave

narrowedthegap.Indeed,inthepastfiveyears(2013-18),thegdp

perpersonofSingaporeandHongKonghasgrownfasterthanev-

erycountryabovethemintheincomerankings.Witha coupleof

exceptions,thesameistrueofTaiwanandSouthKorea.

Intheireconomicmaturity,thetigersmeritrenewedattention.

TheyfacemanyofthesameissuesthatbedeviltheWest:howto

mitigateinequality;howtoginupproductivity;howtocopewith

ageing;andhowtostrikea balancebetweenAmericaandChina.

Theydonothavealltheanswers,buttheydohavenovel,albeit

sometimesfoolish,approachesthatareinthemselvesinstructive.

Littledragons

Thisspecialreportwillexaminethechangingnatureofthetigers’

economiesandmakefourbigclaims.Thefirstisthatmanyofthe

tigers’problemsresultfromeconomicsuccess,notfailure.They

havedefendedtheirglobalexportshareforyears,despitesteady

increasesinlabourandlandcosts.Now,though,theywillstruggle

toexpandtheirexportsfasterthanglobaldemanditself.Theyhave

alsoreachedthetechnologicalfrontierinmanyindustries.That

makesfurtherimprovementharder:theyarenolongercatching

upwithglobalbestpracticesbuttryingtoreinventthem.

LeeKuanYew,Singapore’sfoundingfather,onceclaimedthat

harmonyandstabilityarechiefamong“Asianvalues”.Thetigers

Still hunting

Special report

After half a century of success, the Asian tigers must reinvent themselves,
say Simon Rabinovitch and Simon Cox

Asian tigers

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