Markers On How the Asian Tigers Achieved Growth

It is not without a doubt that the formula for economic growth is understanding and utilizing the three elements of production: labor, capital and technology.

Therefore, it is hardly a miracle that Asian Tigers like Singapore, South Korea and Taiwan achieved growth because they had accumulated labor and capital through the years, and to continue that growth, they invested heavily in technology.

How will the Philippines follow the the lead?

1. Build Investments and Exports:

'The view that investments and exports are engines of growth is based on one empirical and one theoretical argument. The empirical argument is that most East Asian countries that experience phenomenal growth rates also enjoy impressive rates of investment and are successful exporters. The theoretical argument as regards investment is that a high investment rate increases the capital stock (things used to create wealth) and that this can permanently increase the growth rate through economies of scale (e.g., bigger, more efficient factories, larger markets) and other beneficial side effects. In the case of exports, the theoretical argument is that export orientation increases the openness of the economy and, by exposing it to foreign technology and foreign competition, provokes a rapid rate of technological progress.'

Growth in East Asia
What We Can and What We Cannot Infer
Michael Sarel, IMF

2. Establish Relevant Education:

Relevant education is important for a country rather than a system of "nationalistic indoctrination." Practicality should be the guide and not social engineering like creating a fictive national language that is not relevant to economics.

Singapore, Taiwan and the rest of the Asian Tigers invested on education to be the twin pillars of its economic development. Singapore for example has consistently scored higher than most in Math and Science:

'Moreover, the demand for education increases when an economy is growing and the population is becoming richer (it is unnecessary for children to start working at age 12). Furthermore, when an economy experiences rapid technological change, the advantage of educated over uneducated workers will be greater than when the economy is stagnant...

In this case, by the way, further education constitutes an advantage for the specific individual relative to other individuals but does not necessarily improve the macroeconomic prospects of the economy.'

Growth in East Asia
What We Can and What We Cannot Infer
Michael Sarel, IMF

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