The tiger economies

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SUBJECT 8: To what extent does the experience of the “Tiger” economies support, or present anomalies for the Dependency Theory, the Theories of the Developemental States and Neoliberalism.

Thanh Van NGUYEN


The amazing success of the “Tiger” economies (including: Hong Kong, Taiwan, Singapore, South Korea) since the early 1960s has attracted attention throughout the world. In the 1990s,their growth rate doubled the high growth rate of Japan which has been the most famous economic miracle after the World War II (Chaudhary & Islam, 1995:1). The literature on the “Four Little Tigers” ( 亚 洲 四 小 龙 ) is tremendous. The “miracle” experience of these four East Asian economies, also named “gang of four” or more neutrally “ Newly Industrialising Economies”(NIEs) or Newly IndustrialisingCountries (NIC), has brought into question many economic theories, among them the Dependency Theory and the Development States and Neoliberalism. Even though each country had its own particularities, historically, geographically or politically speaking, they shared some common characteristics Being mainly agricultural, the East Asian Tigers’ authorities who were quite authoritarian at thebeginning started a land reform, promoting property rights and putting into place agricultural subsidies and tariffs on agricultural products. The working people were relatively poor and provided cheap labor and largely took advantage of the developed countries relocations. Then the focus of governments on improving education system was significant to the development of the national industry( . Among the range of characteristics, we may quote: high tariffs on imports, undervalued currencies, and the high level of US Treasury bond holding as well as high saving rate. Moreover, in course of the time, when an economist uses the term “Tiger” , it is referring to export-oriented countries which have achieved their industrialisation (Chaudhary & Islam, 1993:16). It is true thatthe Tigers’ economic policy was essentially focused on export to industrialized

countries partly because of the smallness of their domestic market. The governmental support through initiatives like floating exchange rate or the creation of “Free Trade Zones”, making the investments of foreign companies easier by pulling down barriers and investing in the infrastructure(

“Those who exercise power always arrange matters so as to give their tyranny the appearance of justice” (Translated from La Fontaine, 1668). Dependency theory is a critique of Modernization Theory. Like the second, it brings together many intellectuals from various political or national origins. It denounces the world economic system, stating that the global economic system is dividedinto two parts. The North with industrialized countries is the Core, while the South with less developed countries (LDC) is the Periphery. The main idea is that underdevelopment is not caused by the lack of integration, but by the processes of integration and by the external condition. The world system is the exploitation and domination of the South by the North ( Ghosh, 2001:1). Dos Santos gavethe definition of dependency. This notion is used in terms of a relationship; development of a country depends too highly upon powered countries. This dependency on dominant states is even more unfair as the development of the domination is due to the exploitation of dominated nations. This takes place in different ways. Among them is “monopolistic control of the market in trade relations andthrough loans and export of capital in financial relations”. To take part in the game, weak countries have to play on the same field as already powerful nations (Alvin, 1990: 98). Dependency is a very general process. According to Dos Santos, there are three historical forms. The first two well-known forms are colonial dependence and

financial-industrial dependence. These assume control of the...