Tiger Economy

Tiger economy is a term for growing countries’ economies like Hong Kong, Taiwan, Singapore, and South Korea. The prime reason for developing this economy is the rapid growth rate in these countries. It aims to improve economic growth & development.

This economy concentrates mainly in the Southeast part of Asia. Therefore, it intends to calculate the growth factors in the countries mentioned above. These nations have a good, well-built economic infrastructure. Besides, they also have high trade and low-interest rates. However, they do face competition from the western world.

• Tiger economy developed due to the booming economies of southeastern Asian countries like Hong Kong, South Korea, Taiwan, and Singapore.
• The term describes any country undergoing rapid development in terms of technology or policies.
• It started in the 1960s when Asian countries got freedom from Japan and British rule.
• Recently, highly developed countries like the United States and Japan poured investment into this economy. As a result, during 1960-1995, the four Asian tigers saw a massive increase in their growth rate.

The Tiger economy revolves around the economies in Southeast Asia, including Hong Kong, Singapore, Taiwan, and South Korea. Hence, it is also known as the "Asian tiger economy or Four Asian Tigers." As emerging nations, their economies do not make par or level with highly advanced nations like the United States, Japan, and the United Kingdom. Yet, they have a unified currency and solid financial structure to run the country efficiently. For example, Hong Kong's stock exchange is the fastest-growing exchange in the eastern globe.

The history of this economy dates back to the mid-20th century in Asia. Before the World War, Korea and Taiwan already fell into the clutches of Japan but maintained their share in the manufacturing sector. In contrast, Hong Kong was still struggling under British rule. In contrast, Singapore was at war with Japan. However, the Second World war devastated many Asian nations, including Japan. By the end of the 1950s, Korea and Taiwan gained freedom from Japan's dominance. As a result, a significant transformation happened in these nations.

From 1965 to 1995, companies started investing in these nations for low labor costs. Also, Japanese firms started setting up their business in these countries. As a result, the U.S poured $13 billion into South Korea and $5.6 billion into Taiwan. Besides, the economies of these nations grew at a phenomenal rate. Thus, economists referred to them as rising tiger economy countries. For instance, the gross domestic product (GDP) of Hong Kong increased by twofold times. In contrast, Singapore's GDP rose from $70 million to $87.81 billion.

The four Asian countries had predominantly ruled the economy of Asia. However, other factors also influenced the tiger economy countries. Let us look at these Asian tigers:

#1 - Taiwan

Despite Taiwan's lack of natural resources, it has good cultural policies. They introduced import substitution policies in the early 1950s. As a result, the country replaced imports with domestic production. Also, by the 1960s, Taiwan entered exports through Export Oriented Production Zones. As a result, large-scale production boomed the tiger economy growth. For example, the Barbie doll maker, Mattel, produces more than 50,000 dolls daily. Likewise, the employment and wage rate of workers also increased. Taiwanese private firms produced these items for export to the U.S., Japan, and Europe.

#2 - Hong Kong

Due to its location on the side coast of China, Hong Kong offers excellent value to shippers. Textiles, clothing, and plastics grew strongly in the 1960s. They started exporting more electronic items, pearls, marine items, and plastics. The government also began developing roads, cities, transport, and hospitals. Due to the availability of skilled labor, many private companies established their branches.

#3 - South Korea

The Korean war of 1950 destroyed the developed parts of the region. Thus, the U.S provided support of $13 billion during the period 1953-1961. Also, the South Korean government eased the restrictions on imports and FDI. By the late 1980s, they achieved a 7.8% growth rate. Many Japanese firms like Sony also invested in them.

#4 - Singapore 

In the 1960s, Singapore faced colossal unemployment and poverty. To deal with this, the government developed an Economic Development Board to attract foreign direct investment. As a result, the manufactured exports increased by 85% in 2001. Also, the GDP had reached 9.8% by 1990.

Let us look at the examples of the tiger economy to comprehend the concept better:

Example #1

Among the race of tiger economy growth, even India joins the path. Prime Minister, Narendra Modi, estimates the Indian economy to grow massively by 2050. They aim to achieve a growth rate of more than 8% in the next 25 years. In contrast, the Celtic tiger economy of Ireland witnessed a massive rise in property prices in November 2022. However, it is not a part of the four Asian tigers.

Example #2

Former Indian diplomat Ambassador Sarvajit Chakravarti says that the officials believe Bangladesh might emerge as the next rising tiger economy. Yet, there is a vast scope for development in the region. If the Indian rupee becomes the legal tender, there is a high chance of becoming a part of the four Asian tigers. Besides, the GDP of the tiger economy has also risen in these years. For example, Singapore's GDP has risen by 467% from 1960 to 2022.

Although these economies cover most countries, they differ slightly. While the former concentrates on east Asia, the lion economy focuses on African countries. In contrast, the tiger cub economy considers southern Asia countries. However, collectively they discuss the rapidly growing economies in the Asian and African continents.

This article has been a guide to what is a Tiger Economy. We explain Asian tiger economies and examples and compare them with the lion and other economies. You may also find some useful articles here -

• Asian Financial Crisis
• Economies of Scale
• Open Economy