Japan is a Model for Other East Asian Economies
Japan was a model for the NIEs (Taiwan, South Korea, Hong Kong, and Singapore) and is a model for the next economies likely to gain NIE status, Malaysia and Thailand. After 1945, Japan limited the export of capital to prevent a shortage for local investments. It also provided incentives and security for businesses who channelled funds into industry and infrastructure. Japan focused on labor-intensive industries, such as textiles, and used the income from exports to buy equipment while upgrading its training and technology to achieve greater productivity in industries that would eventually allow for higher wages.
Like Japan, the NIEs are densely populated and short on natural resources. Also like Japan, they began with a large labor force that was willing to work and improve its skills to meet the needs of industry. These new employees had relatively high levels of literacy, making them a highly-teachable work force. South Korea and Singapore studied the Japanese experience in detail, but Taiwan and Hong Kong also understood Japan's strategy.
Prime Minister Mahathir of Malaysia has named Japan as its model in his "Look East" policy. Malaysia, however, has less labor available than did Japan. Thus, while it follows Japan's example of a governmental role in guiding economic development, its current policy is aimed at developing capital-intensive, high-tech oriented industries that can produce competitive products for developed countries' markets. On the other hand, Thailand can provide a labor source similar to that of early Japan. However, its laissez-faire approach to investment and infrastructure is impeding its economic progress.
Hong Kong is Not a Model for Other East Asian Economies
Hong Kong does not serve as a good model for other East Asian economies because of its unique geography and history. Hong Kong lies off the coast of Guangdong province in Chin...