What Is a Tiger Economy?
A tiger economy is a term used to describe several booming economies in Southeast Asia. The Asian tiger economies typically include Singapore, Hong Kong, South Korea, and Taiwan.
The Asian tigers are high-growth economies that have transitioned from predominately agrarian societies of the 1960s to industrialized nations. The economic growth in each of the countries is usually export-led but with sophisticated financial and trading markets. Singapore and Hong Kong, for example, are home to two of the major financial markets in the world. Sometimes China is mentioned as an Asian tiger but has separated itself from the pack to become one of the largest economies of the world.
The Asian cub economies, which have developed more slowly than the tigers but have experienced rapid growth over the last several years, include Indonesia, Malaysia, Thailand, Vietnam, and the Philippines.
- A tiger economy is a term used to describe several booming economies in Southeast Asia.
- The Asian tiger economies typically include Singapore, Hong Kong, South Korea, and Taiwan.
- The economic growth in each of the Asian tiger nations is usually export-led but with sophisticated financial and trading hubs.
Understanding Tiger Economies
With the injection of large amounts of foreign investment, the Asian tiger economies grew substantially between the late 1980s and early- to mid-1990s. The nations experienced a financial crisis in 1997 and 1998, which, in part, stemmed from huge debt-servicing expenses and 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 major exporters of goods such as technology and electronics. The influence of the Asian tiger economies is likely to increase in the years to come.
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). However, emerging markets do typically have a financial infrastructure, including banks, a stock exchange, and a unified currency.
For example, the Asian tiger economies have import restrictions to help promote the development of local industries and boost export-led GDP growth. Gross domestic product (GD) is a measure of all the goods and services produced in an economy. However, Singapore and Hong Kong have begun to normalize trade by allowing an increase in the free trade of goods and services.
The Asian Tigers
The Asian tigers share many characteristics, including an emphasis on exports, an educated population, and a growing standard of living.
Although it's a special administrative region (SAR) in China, Hong Kong has independence and control over its economy and has emerged as a major financial hub in the region. The Hong Kong Exchange is consistently ranked in the top ten for the largest stock markets in the world.
South Korea is a modern economy that has developed into one of the most prosperous Asian economies with its production and exports of robotics, electronics, and software. South Korea is also home to Hyundai Motor Company and exports over $60 billion in vehicles each year.
Although Singapore has one of the smallest populations–with just over 5 million people–the tiger has delivered consistent growth over the years. Singapore has transitioned into a financial center, in particular, hosting a large foreign exchange trading market. Singapore exports electronic circuit bards, petroleum products, and turbojets.
Taiwan has emerged as a prominent exporter. The country has 23 million people and is the home of the manufacturer of some of Apple's most notable products. The Asian tiger also sells and exports computers, electrical machinery, plastics, medical devices, and mineral fuels.
Asian Tiger Economies and the G8
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 that include economic growth, energy, and terrorism.
While the Asian 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 by 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 Asian tiger economies (particularly China) ramping up economic growth and military power, President Obama made the decision to “pivot to Asia” throughout his two terms in office (2009-2017). According to the policy, the United States would have significantly more military sway in the region but could also potentially benefit from facilitating foreign direct investments. The policy, in part, aimed to make 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.