The “Asian miracle” was largely the result of a three part strategy. First, the state set ambitious goals and achieved them by encouraging and supporting private firms to set their sights on breaking quickly into hightech industrial sectors. Next, governments understood that their countries had to develop strong export sectors in order to vault into the top echelon of high-income economies. Finally, policymakers needed to encourage a culture of robust corporate competition, as well as strict accountability for the support that businesses received. The resulting symbiosis between the state and the market proved highly successful and has become a model for other developing countries to follow.
SINGAPORE (Jan 23): For many firms in emerging and developing economies, emulating the successes of Samsung and Hyundai may seem like an impossible dream. But the rapid economic growth of Japan, South Korea and other Asian countries in the second half of the twentieth century shows how it can be done.
Japan and South Korea, for example, were once poor countries striving to reach high-income status as quickly as possible. They each achieved that goal through strong state interventions, such as industrial policies that helped domestic firms venture into sophisticated sectors and compete globally. By applying these lessons, today’s developing countries can provide similar opportunities for their companies, as well as good returns for global investors.
