What Are Tiger Cub Economies?

Tiger Cub Economies refer to developing countries in Southeast Asia, including Indonesia, Malaysia, the Philippines, Thailand, and Vietnam.

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Tiger Cub Economies

Understanding Tiger Cub Economies

The term "Tiger Cub" was coined to reflect the hope that these nations evolve along the same path as the original tigers (Singapore, Taiwan, South Korea, and Hong Kong) while understanding that they were still in the early stages of development (cub).

The original Four Asian Tigers experienced substantial economic growth between 1950 and 1990 from a huge push by the government and corporate sector to promote industrialization. Today, the tiger cub economies are following a similar path. They adopted similar export-driven models that stress the importance of technology to achieve similar results as their "ancestors."

The Tiger Cub Economies are all different in nature. Some are larger and further along in the development process, whereas others have just begun. Indonesia is the largest of the tiger cub economies with a population of over 264.16 million as of 2019. This makes it the fourth largest country in terms of population, behind China, India, and the United States.

Growth and Tiger Cub Economies

In terms of GDP, though, Indonesia ranks in the top 20 of the world's largest economies. The largest tiger cub boasts a gross domestic product just north of $1 trillion as of last year. On a per-capita basis, Indonesia recently exceeded $3,500 USD in 2016. This per capita figure pales compared with other cubs like Thailand and Malaysia. The two countries recorded GDP per capita north of $5,000 USD in 2016, with Malaysia a little under $10,000 USD.

In many ways, the tiger cub economies are an attractive destination for continued foreign direct investment (FDI) as they exhibit the qualities necessary for maximizing external investments. This includes large and growing domestic markets, infrastructure improvements, developing investment conditions, sound economic management, and available low-cost labor.

Key Takeaways

  • Tiger Cub Economies refer to developing countries in Southeast Asia, including Indonesia, Malaysia, the Philippines, Thailand, and Vietnam.
  • The term "Tiger Cub" was coined to reflect the hope that these nations evolve along the same path as the original tigers (Singapore, Taiwan, South Korea, and Hong Kong) while understanding that their economies were still in the early stages of development (cub).
  • Tiger cub economies have export-driven models that stress the importance of technology to achieve similar results as their "ancestors."

Special Considerations

Investors seeking exposure to these growing economies can invest in country-based exchange traded funds (ETF). Some of the most liquid assets include the iShares MSCI Indonesia ETF (EIDO), the iShares MSCI Malaysia ETF (EWM), the iShares MSCI Philippines ETF (EPHE), and the iShares MSCI Thailand ETF (THD). They have largely underperformed other emerging markets despite promising economic growth in the past few years.

Some experts claim less-developed cub economies will surpass the larger tiger countries in the near future. 

As of February 11, 2020, Thailand (THD) has been the best performer, as it continues to ride the strength of exports and tourism sectors to higher economic growth, while Malaysia (EWM) has been the clear laggard.

Tiger Cubs
Tiger Cubs (2/11/2020).