Course Number: 90-752
The Rise of the Asian Economies
For most of the past 30 years, no region of the world has been more economically dynamic than Asia. While much of the developing world failed to keep pace with economic growth in the advanced industrial countries over this period, the nations of East Asia grew at historically unprecedented rates. This economic growth transformed the patterns of world trade, lifted millions out of absolute poverty, and so captivated the attention of Western economists and business leaders that it was commonplace by the early 1990s to refer to economic achievements of these countries as the “East Asian miracle.”
For many of the region’s nations, this miracle came to an abrupt halt with the onset of the Asian financial crisis in the summer of 1997. This downturn was followed by an unexpectedly sharp recovery in 1999, then a second slowdown which began at the end of 2000. This period of turbulence exposed several critical economic weaknesses in the region, many of them related to distortions and limitations in regional financial markets. Growth recovered in the later 2000s, but the global financial crisis of 2008 had a significant impact on the region.
Despite these economic problems, the People’s Republic of China has continued to sustain very high economic growth rates. This robust growth has attracted more foreign direct investment than any other country in the developing world. Even if the rest of the region were to slow down substantially, continued growth in China would be sufficient to shift the world’s economic center of gravity toward East Asia. Will that growth be sustained?
Over the past two decades, Indian economic growth has accelerated and, now, many commentators consider it likely that India will emerge, along with China, as one of the three largest economies in the world in coming decades. How likely is this? How has Indian economic growth and development differed from the patterns we have seen in East Asia?