ECON 332: Economic Growth Analysis of the Pacific Rim - Summer 2018

This essay analyzes the economic growth of Pacific Rim countries, comparing North East Asian economies (Taiwan and South Korea) with South East Asian economies (Indonesia, Thailand, and Malaysia). It identifies key factors driving growth in each region, such as human capital accumulation, inco...Read More

Running Head: ECONOMICS OF THE PACIFIC RIM
Economics of the Pacific Rim
Name of the Student
Name of the University
Author note

1ECONOMICS OF THE PACIFIC RIM
The article named “Initial Conditions and Miraculous Growth: Why is South East Asia
Different From Taiwan and South Korea?” aims to make a comparative analysis of rapid
economic growth between North East and South East Asian economies. The author of the article,
Anne Booth attempts to figure out sources of growth between these two group of nation. The
economies of Indonesia, Thailand and Malaysia are discussed to represent growth of South East
Asian nations. The representative nations chosen from North East Asia include Taiwan and
South Korea. Because of colonial legacy growth history of Taiwan and South Korea is related to
Japan.
The article identifies driving forces behind economic growth in the chosen nations of
North East and South East Asia. In the North Asian growth model the main factors contributing
to achieve a faster growth rate include accumulation of human capital, relatively equal
distribution of wealth and income, the dominant role played by government and bureaucracies,
relatively high physical investment and growth of export. In case of growth in South East Asian
nation the initial factors though seem to be similar but they differ in number of ways. Like, North
East Asia high investment, export growth and bureaucracy are import factors behind rapid
economic growth. So far as access to natural resource is concerned South East Asian nations
enjoy a greater access to land and natural resources as compared to North East Asian countries
(Booth, 2001). Taiwan and South Korea are far ahead of South East Asian nations in terms of
educational facilities and income distribution. Despite experiencing a relatively fast growth rate
many of the South East Asian countries marked a break to their growth path. This raised concern
regarding sustainability of growth in these nations.
This article provides knowledge about growth history of East Asian nations. It identifies
most of the factors responsible for astonishing growth experience of these countries. By

2ECONOMICS OF THE PACIFIC RIM
distinguishing North East and South East Asian growth model, the article makes detail analysis
regarding East Asian growth. However, the article has its own limitations. The article does not
discuss anything about technological progress of these nations. State of technology plays an
important role in determining productivity and economic growth. More attention has been given
on two specific nations of North East Asia such as Taiwan and South Korea. The article though
mention about break down of economic growth in some nations of South East Asia like
Indonesia, Malaysia and Singapore, no strong reasons has been given for such a condition. This
opens up room for further studies to better understand the future growth prospect of East Asia.

3ECONOMICS OF THE PACIFIC RIM
References
Booth, A. (2001). Initial conditions and miraculous growth: why is Southeast Asia different from
Taiwan and South Korea?. In Southeast Asia’s Industrialization (pp. 30-58). Palgrave
Macmillan, London.