Asian Tigers, Iraq War, Minor Tigers, and China’s Economy
Asian Tigers: Newly Industrializing Countries
The newly industrializing countries (NICs), or “Tigers of Southeast Asia,” represent a unique case of economic development. The first four were: Taiwan, South Korea, Singapore, and Hong Kong. These countries prioritized maximum savings and investment in principal industries for export, long work hours, and strong labor discipline. Taiwan and South Korea, in particular, received military and financial support from the United States. Additionally, they prioritized training and qualification of the local workforce.
Between 1989 and the early 1990s, all saved between 30% and 45% of their gross domestic product and reinvested between 25% and 40%. These countries experienced rapid technological advancement. The Southeast Asian Tigers transitioned from low-development, agricultural countries to highly industrialized nations. This growth process was coupled with low wages for workers, a factor that was, and still is, attractive to foreign companies that set up operations in the region.
One of the key measures was to selectively promote the arrival of Japanese and U.S. multinationals and foreign capital. Foreign investment was encouraged but with strong state control. This policy challenges the common idea that associates globalization and successful capitalism with a shrinking state.
Iraq: Causes of War
The invasion of Iraq began on March 19, 2003. After the Cold War, with the dissolution of the Soviet Union in 1991 and the end of the totalitarian regimes of Eastern Europe, the East-West confrontation ended, as well as the balance of power in the world. The attack on the Twin Towers and the Pentagon in Washington on September 11, 2001, generated a crisis in the U.S. From this attack, the U.S. government undertook a review of its strategy and concepts on national security and how to deal with the “axis of evil.” It started with preventive war.
According to the U.S., countries had to choose between allying with them in their struggle to find and immediately attack terrorist cells (which are scattered throughout 60 or more countries) or siding with terrorism.
The Minor Tigers
Later, other countries in Southeast Asia began to develop, called “second generation tigers” or “little dragons.” These countries started their path to industrialization later but took the newly industrialized countries as a model. They are:
- Malaysia, Singapore
- Indonesia, Bandar Seri Begawan
- Thailand, Bangkok
- Philippines, Manila
- Vietnam, Hanoi
(as part of ASEAN). Many Japanese electronic products are assembled in one of these countries with low wages, working days of ten hours, six days a week, and few social benefits. Malaysia was the country that grew the fastest. The poverty level fell sharply, as did income differences based on ethnic membership. Indonesia and Thailand improved industrial production, agriculture, and income from tourism. In the “Small Dragons,” major social conflicts are associated with their governments’ authoritarian tinge and poor working conditions, as well as ethnic conflicts.
Mobility Control in China
The Chinese government controls the mobility of people throughout its territory. While there isn’t a prohibition on leaving one’s place of residence, controls have become less strict in recent years, and many poor farmers move to cities to illegally obtain employment and means of subsistence. This affects urban economies that cannot absorb the additional labor. Cities present sharp income inequalities if one takes into account the farmers who migrate and live in poverty and lawlessness.
The Socialist Economic System
- Centralized Planning: The state controls production, distribution, and consumption.
- Collective Ownership: Private ownership of the means of production is collective, never private.
- Rejection of Profit: The system rejects the idea of profit or private gain.
- Single-Party System: It is a single-party political system. Legitimacy is supported by the control of the Communist Party, which limits freedom of expression that could jeopardize the entire system.
- Absolute State Power: The state exercises absolute power in all areas of social and economic life. It also sets the cost of salaries and goods.
- State-Provided Services: The state provides all public services and satisfies the basic needs of all people, eliminating class inequality.