From Asia-centered growth to a balanced world-wide growth

Abstract

The last ten years from 1985 to today was the period of "Pacific Dynamism". Economic growth of East-Asian countries was outstanding in the world economy. Asia's newly industrialised economies displayed fast growth by an export-led expansion in the period of the mid-70s to the end of 1980s. Strong US economic recovery brought about an expanding market for newly merging exporters. After 1986 when the Japanese export industries were pressed by the appreciated yen rate, Korea and Taiwan could take advantage of improved price competitiveness. ANIES (-- Korea, Taiwan, HK, and Singapore) grew at a tremendous rate while the rest of the world economies stagnated. From the mid-80s ASEAN followed ANIES in high economic growth, helped by ODA and FDI from ANIES, Japan and US. Japan's overseas development aid was heavily tilted toward ASEAN member countries. A strong yen rate contributed to blowing up her ODA value in dollar terms. Japan's FDI also increased at a tremendous rate. Many exporting firms began to move its factories out of Japan. Fast growth of ODA and FDI worked as "combined two wheels" in order to encourage economic growth in ASEAN region. Korean and Taiwan whose currencies also appreciated against US dollar followed Japan in the expansion of FDI. Growth potentials of ANIES rapidly spilled over to South-East Asian economies.