Comparative study of industrial policy in East Asian countries

Abstract

The East Asian economies in this paper cover the four resource-poor Asian Newly Industrialised Economies (ANIES-4) of Hong Kong, South Korea, Taiwan and Singapore, and the four resource-rich ASEAN economies (ASEAN-4) of Indonesia, Malaysia, Philippines and Thailand. Singapore is included under the ANIES group rather than under the ASEAN group as its level of economic development are more akin to the former than to the latter. The two groups of countries are hereafter referred to as the East Asian economies. Major differences among the East Asian countries are outlined below (see Table 1). First, there is wide disparity in size. Indonesia is the most populated, with 178 million, followed by the Philippines with 62 million and Thailand with 60 million; at the other end is Singapore with only 2.8 million. In economic size, South Korea is the largest with a GNP of US$237 billion in 1990, followed by Taiwan, Indonesia and Thailand; at the other extreme are Singapore and Malaysia. Second, although the 8 economies are designated as NIEs and near-NIES, there remains considerable differences in per capita income, and thus the level of economic development. Singapore and Hong Kong have the highest per capita GNP (exceeding US$13,000), while Indonesia and Philippines are at the other end of the spectrum (US$605 and US$725 respectively). Third, while the ANIES are poor in natural resources, the ASEAN-4 possess abundant natural resources including oil and gas. Areas of similarity among the ANIES and ASEAN-4 countries are the following. First, all are market oriented economies and all have adopted outward looking development strategies. Second, except for Hong Kong, the governments are highly interventionist in promoting economic development and industrialisation. However, government interventions have been more often market facilitating than market obstructing and largely in line with the countries' comparative advantage.