DEFINITION of Tiger Economy
A tiger economy is a nickname given to several booming economies in Southeast Asia. Some of the tigers are Indonesia, Singapore, Malaysia, Thailand, South Korea and China.
BREAKING DOWN Tiger Economy
With the injection of large amounts of foreign investment, these economies grew substantially between the late 1980s and early- to mid-1990s. They then experienced a financial crisis in 1997 and 1998. Some of the reasons for this period of financial turmoil included huge debt-servicing expenses and an inequitable distribution of wealth. The majority of these nations’ wealth remained in the control of an elite few. Since the late 1990s, the tiger economies have recovered relatively well and are likely to become more active participants in the global market in the coming decade.
Many of the tiger economies are deemed to be emerging economies. These are economies that generally do not have the level of market efficiency and strict standards in accounting and securities regulation as many advanced economies (such as the United States, Europe and Japan). Emerging markets do typically have financial infrastructure, including banks, a stock exchange and a unified currency.
Emerging economies often stand in contrast with the Group of Eight or G-8 highly industrialized nations, including France, Germany, Italy, the United Kingdom, Japan, the United States, Canada, and Russia. This elite circle holds an annual meeting to focus on global issues like economic growth, energy, and terrorism.
While the tiger economies historically have not been part of the G-8; some are predicted to overtake many of the more advanced nations by 2020. This has the potential to cause a substantial shift in the global balance of economic power. For example, China’s share of the world’s total GDP increased more than 6% from 2000 to 2010. Despite significant inequality, China is already ranked among the largest economies in the world.
Tiger Economy and U.S. Foreign Policy
With the tiger economies (particularly China) ramping up economic growth and military power, President Obama aimed to “pivot to Asia” throughout his two terms in office (2009-2017). According to this policy, not only would the United States have significant more military sway in the region, but could also potentially benefit from facilitating foreign direct investments, making it easier for U.S. companies to conduct business with a range of producers, suppliers, and manufacturers in the tiger economies. Long-standing financial hubs like Singapore and major Chinese cities could benefit from greater presence and access to U.S. markets as well – a two-way street.