Economic Development of East Asia

Economic Development of eastern hemisphere AsiaThe easternmost Asia Miracle Lessons for the ontogeny countriesThe easternmost Asia region has been drawing global attention as fruits of its growth and learning over the historic thirty years continuously awe many. The most productive developing countries over the last half century app bently pick up come form this region.1It has a remarkable record of high and sustain sparing growth as 23 economies in it grew faster that those in other parts of the world.2However, when the Asiatic Financial Crisis hit this region in 1997 some structural and institutional weaknesses have cast uncertainness on the eastern United States Asiatic Miracle. Hasty recovery and resiliency which the region revealed in fighting forth and prevailing over most of the negative drawbacks brought by the crisis was enough to sustain the belief in the miracle. Although East Asian economies applied varying strategies in their stinting developing, a salie nt and strong factor harsh to all is the presence and the fictional character of the politics in their development. East Asian countries have assumed a situation of a developmental state in which the government played an important hands-on role in the process of industrialization and scotch development.3Thus, understanding the economic development and experiences of East Asia may propose helpful lessons that other developing countries trapped in stagnation may want to consider.According to Thorbecke and sick(p) (2004) in that respect are two critical factors and corresponding phases of development that occurred in East Asia. First, countries need to cooking stove first a take-off point which emphasizes on promotion of education, to build up on human superior and the promotion of the agricultural sector in order to eventually finance investments on physical infrastructure. The game phase, development calls for industrialization that brings structural and technological upgr ading.4First lesson implied in the first phase of development is that economic development cannot be hurried. There are certain processes that need to be readied before countries reach the take-off point. At the beginning of the development process a country is predominantly agrarian and the economy is relatively closed.5East Asian governments understood that the major mechanism for obtaining the resources indispensable to escape the poverty trap and for industrialization was through and through and inter-sectoral transfer out of market-gardening. The major role of the agricultural sector was to generate the necessary capital to finance the outset of the industrialization process.6The main lesson to be drawn from the experience was summarized by Thorbecke and Morrison cited in the Revisiting East and (South East) Asias development model (2004)A lesson learned from those countries which were most successful in achieving both growth and equity throughout their development history (e .g. Taiwan and South Korea) is that a continuing gross flow of resources should be provided to land in the form of much(prenominal) elements as irrigation, inputs, research and credit, combined with appropriate institutions and price policies to increase this sectors productiveness and potential capacity of contributing an even larger flow to the rest of the economyIn addition, the East Asian countries invested heavily on universal education with a long-term goal in mind. They paste of education in the rural areas provided farmers and their children the skills they need to operate in non-farming activities after the take-off.7They sponsored education of technical skills in the college level. This strategy resulted in a very competitive labor force able to man their industries.8In the second phase, East Asian economies recognized that the international economy is highly interdependent and that a development process of interdependence is much more favorable than individual growth.9 Interaction among countries lets in trade, investment and engine room transfer. East Asian economies took advantage of the positive spill over effects the interactions brought with it. It should be noted besides that Thorbecke and Wan perceived of openness as a necessary yet insufficient condition for successful development. Catching up though is impossible without openness.10In an increasingly interdependent world, competition is much potent. To come across high economic growth rate major structural changes like industrialization should undertaken. Structural changes needed by less developed countries require acquisition of technology. This is a step familiar to East Asian economies. They took advantage of the technology and knowledge transfer by making their countries attractive to foreign cover investments they became subcontractors of sophisticated firms and studied how they can localize the ideas and eventually create their own. Case in point is Taiwan which invested in in dustrial parks and attracted many foreign firms.11They acquired technology and idea transfer from joint ventures and foreign direct investments.Policies also played a great role in the development of East Asian economies. Although there are certain differences in the sign conditions for development and growth, economic development and growth pattern that East Asian economies that are common to them also is linked to growth factors and the policy body they adopted.12East Asian economies have growth led by investments, exports and enforcing of sound policies to support their industries. Moreover, the governments in East Asian countries are very much involved and unhesitatingly intervene in the market-oriented economies.13The role of the government is to maintain macroeconomic stability, overcome possible coordination failure and act as an intermediary in promoting growth initiations.14The economic system was found on wide ranging cooperative relationship between government and the local and transnational firms based in their country.15The industrial policies enforced seek to encourage the development of industries through various government measures such as tax incentives, Research and Development subsidies, credit allocation and protection against foreign imports.16In addition, the export-oriented industries did not develop without these particular measures of the government to accelerate investment in such industries provision of infrastructure, universal education.17The role of the government was mainly to set up institutional policy foundations required for growth and overcoming coordination failures that can point a the economy from flourishing.18The Asian Financial Crisis unearthed and exposed certain weaknesses of the East Asian economic model. frail and inefficient financial systems, lack of corporate transparency and accountability, and widespread corruption became apparent after the crisis skint out.19This occurrence explicitly calls for constant improvement on institutions in the country which serves as the pillar of economic development. This is a lesson not only for developing countries but for the East Asian economies as well.The East Asia economic development model is applicable to the Philippines to a certain extent. The former policies and steps undertaken needed to be special to suit the condition of the Philippines. The Philippines can consider setting its neighbors and the East Asia Miracle as benchmark of development and a goal to be achieved. The Philippines always has to remember that East Asian economies started modestly and took advantage and cultivated the initial conditions and resource endowments to their advantage. A step back to reexamine where the Philippines went wrong, why it seems to be experiencing a prolonged consequence at the take-off stage, would be a humble at the same time brave gesture on the part of the countries leaders. Although it may be too late to shift the focus back on agriculture be cause of changing conditions, it is still important that the government invest in infrastructure (i.e. farm-to-market roads) and R D as many in the country still rely on agriculture for a living._ If it is possible that the government nurture the current industries it has and the agricultural sector at the same may be beneficial for the country.The Philippines have a lot of catching up to do, the East Asian miracle may also come straightforward for the Philippines if it would only reconsider some of the policies being implemented and strengthen its institutions that would foster economic development.SourcesChang, H. The Economic possible action of the Developmental State. 182-199.East Asia Analytical Unit. The Philippines Beyond the Crisis . Manila Department of ForeignAffairs, 1998.Page, John. The East Asian Miracle quadruplet Lessons for Development Policy. NBERMacroeconomics Annual, 1994 219-269.Park, Jong. The East Asian Model of Economic development and developing countries. Journal of Developing Societies, 2002 330-335.Sakurai, Makoto. The sustainable Development of East Asia and accompanying issues.Economic and Social Research Institute, 2003.Thorbecke, E, and H Wan. Revisiting East and (South East) Asias development model.Cornell host on Seventy five years of Development. New York, 2004. 1-38.Wade. Lessons from East Asias Development Experience. 2005.