The Four Asian Tigers or Asian Dragons refers the highly developed economies of Hong Kong, Singapore, South Korea and Taiwan since 1970. These regions were the first newly industrialized countries, noted for maintaining exceptionally high growth rates and rapid industrialization between the early 1960s and 1990s. In the 21st century, all four regions have since graduated into advanced economies and high-income economies. However, attention has increasingly shifted to other Asian economies which are now experiencing faster economic transformation.
All four Asian Tigers have a highly educated and skilled workforce and have specialized in areas where they had a competitive advantage. For example, Hong Kong and Singapore became world leading international financial centers, while South Korea and Taiwan became world leaders in information technology. Their economic success stories became known as the Miracle on the Han River and the Taiwan Miracle and have served as role models for many developing countries, especially the Tiger Cub Economies.
The four original tigers experienced decades of supercharged growth based largely on market liberalizations and a dramatic increase in exports, much of this incited by the United States during the Cold War. Afraid the world would succumb to Communism, the U.S. bolstered relations with many nations offering financial assistance, investing in their economies, installing and removing leaders, and providing a large foreign market for their goods. As a result the Western world seemed to take notice of Asia for the first time and began seeing it as a viable market. Foreign investment skyrocketed and these states went from undeveloped to successfully developed countries in almost no time.
Common characteristics of the Asian Tigers were that each focused on exports to rich industrialized nations. They sustained rate of double-digit growth for decades. Each nation was non-democratic and relatively authoritarian political systems during the early years. Each of the Asian Tigers had high tariffs on imports and undervalued currencies. Each of the Asian Tigers held a high level of U.S. bond holdings and had a high savings rate.
Unfortunately the bubble burst in 1997 as the financial successes lead to dangerously unwise investments and the market imploded. Lack of transparency in financial practices, corporate favoritism, and rampant corruption (with the exception of Singapore) meant no one really knew where their money was going and people started to notice. When exports began to diminish rapidly the new foreign investors simply pulled their money out of the tiger economies and the bottom fell out. Suddenly economists wondered whether they were a little too trigger-happy in labeling the tiger economies such a resounding success. Nobel Prize-winning economist Paul Krugman patted himself on the back for predicting back in 1994 that the whole Asian escapade was just a bubble, “all perspiration, no inspiration”.