Rapid Economic Growth in East Asia

Broad Sharing of Growth's Benefits

A fundamental aspect of economic policy in the high-performance East Asian economies is the principle of shared growth. In Malaysia, economic policy addressed income imbalances between different ethnic groups, with particular focus on the welfare of Bumiputera, the largest but poorest ethnic group. The concept of "economic democracy" espoused in Indonesia includes the idea that everyone shares in economic opportunity. Leaders in Taiwan/China recognized equity considerations needed attention to avoid repeating previous political failures. Japan and Singapore, both benefiting from the absence of a landlord elite, also put significant emphasis on equity. Attention to distributional considerations in Korea developed more gradually. Leaders in all these countries, while often authoritarian or paternalistic, recognized that their political viability and legitimacy depended on their ability to deliver gains in economic welfare to everyone rather than just to a narrow elite.

Several types of policies helped to promote the broad sharing of economic growth's benefits. Investments in education promoted social mobility and enhanced workers' economic opportunities. Land reform was carried in Japan, Korea, and Taiwan/China in order to distribute landholdings more equally and to foster the incentives of workers in agriculture to be productive. Economic policy, particularly in Japan and Taiwan/China, and in the 1980s in Korea, also fostered the development of small and medium-size enterprises. Hong Kong and Singapore provided low-cost housing for a majority of residents. While governments in the high-perfomance East Asian economies tended to surpress radical labor activity in the name of political stability, they have also stressed labor-management cooperation, consultation, and commitments to raise wages in line with economic growth.

The success of policies of shared economic growth are evident:

Another important poverty indicator shows scope for improvement:

Topic Economic Growth in East Asia