INTERNATIONAL HISTORY
Theme II: Rise of the Asian Tigers (1970s -1990s)
(9752)
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MASTERY
CHAPTER
ANALYSIS EXAM
WEIGHTAGE
2
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TIMELINE OF ASIAN TIGERS: 1970s – 1990s
DIFFERENT TIME PERIODS IN EARLY YEARS
REASONS FOR ECONOMIC GROWTH
KEY AGENTS OF THIS GROWTH
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Key Questions for Asian Tigers What makes a factor the most important?
1. Assessing the key reasons for economic - Sustained nature of its impact
transformation. - Direct role in influencing outcomes
2. Who were the most important players that - Fundamentality in determining the
contributed to the economic development of SK and extent of its impact
Taiwan?
3. What were the distinct phases of growth in these
countries? Potential Angles of Analysis
- Long-term/Short-term
- Context/Trigger
- Direct/Indirect
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International
Domestic
Institutions & Foreign
Government
Governments
In earliest years, US
Investing heavily
provided loans and
agriculture to set
foreign aid, providing
foundations for future
much needed capital
industrialization
to kickstart economies
Stabilize political
Key Players in Asian Tiger economies regime and give
Gave much needed
technological expertise
foreign investors
in the industrialization
confidence that
process
regime would survive
AGENTS Government ability to
Providing valuable
plan and invest in key
export market for
sectors of economy in
Domestic Governments economies to sustain
due time, sustaining
growth
economic growth
International institutions and Foreign Governments
Private enterprises and Multinational Corporations
Private
Local culture Enterprise & Local Culture
MNC
Ability of local
Facilitated the transfer of companies to adapt
key industrialization
technologies to Asian
business model to
countries global trends (TW
SME's)
MNC’s indirect role in Ability of local
supporting local economy companies to fill the
by subcontracting domestic void of government in
SME’s to produce their
goods
the economy (Chaebols)
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Timeline for Taiwan
Intermediate Years •Sustaining growth despite
•Establishing political
TIME PERIODS stability (1970s -1980s) unfavourable
international
•Establishing foundations •Moving from import- developments
for growth by substitute
Establishing foundations for growth (1950s-1970s) industrialization and •Adapting to global
industrialization to export economic trends
investing in key sector markets
Moving into export-oriented industrialization (1970s-1980s) •Managing impact of
global crises
Adapting to global economic trends (1970s-1990s) Early Years (1960s Dealing with crises
– 1970s) (1970s – 1990s)
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Timeline for South Korea
Intermediate Years •Sustaining growth
• Foreign aid critical in
TIME PERIODS providing capital to (1970s -1980s) despite unfavourable
kickstart growth international
•Chaebols sustaining developments
•Establishing foundations growth by industrializing
Establishing foundations for growth (1950s-1970s) for growth through •Resolving issues that
successfully where the
industrialization and government failed lay with the rise of the
Moving into export-oriented industrialization (1970s-1980s) investing in key sectors •Managing impact of chaebols
global crises
Resolving domestic economic problems (1980s-1990s) Early Years (1960s Dealing with crises
– 1970s) (1970s-1990s)
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Example: Foreign Governments
US provided critical aid to Taiwan in context of the Cold War which provided the
necessary capital to kickstart the economy in the earliest years.
Taiwan: Establishing Growth (1950s-1960s)
US aid totaled 1.5 billion dollars and contributed to 30% of capital formation for
economic growth and 68% of investment in public utilities.
- Key agents in establishing growth: Government, Foreign
Governments, Multinational Corporations.
- Establishing growth refers to establishing socio-political Example: Taiwan Government
stability, investment into agriculture for future Established strong socio-political foundations for future industrialization and
growth, by investing in key sectors of the economy like agriculture and
industrialization, and the kickstarting of the irrigation.
industrialization process.
Government served as a key guiding hand to building strong foundations for
- Note the nature of roles played by different agents in the the economy.
establishing of growth – How fundamental are they?
Example: Multinational Corporations
Multinational corporations indirectly assisted in the industrialization process by
providing sorely needed technological expertise to Taiwanese industrial
manufacturers.
Assisted in the development of the textiles industry in early Taiwan
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Example: Foreign Governments Example: Taiwan Government
While foreign aid dried up, the US Direct hand in guiding the
Taiwan: Explosive Growth (1970s-1980s) was a key export base for Taiwan. economy by focusing on new
Indirectly supported their industries in the 1970s. Invested
economic growth. in heavy industries through state-
- Key agents in continuing growth: Government & Local owned enterprises that would not
Japan indirectly supported have been developed by private
Culture, Foreign Governments, Multinational Corporations. Taiwanese industries as Taiwan enterprise due to high costs.
- This period is marked by the shift towards export-oriented was dependent on them for the
import of intermediate goods for This was crucial in moving
industrialization. production lines in its industries. economy to produce higher-value
added goods.
- Note the roles played by different agents in terms of
fundamentality, direct influence and long-term impact.
Example: Multinational Example: Local Culture
Corporations
Ability of local businesses to
Indirectly provided the necessary adapt and sustain itself by directly
markets for Taiwanese industries changing in response to global
to continue production through a demands.
subcontractor model in the
1990s. SME entrepreneurs developed
their own system of flexible
Evidenced by 80% of specialization to meet export
motherboards supplied in the demand of the country. This is
global market being produced by critical in EOI, where global
Taiwan in the 1980s. market demands could easily shift
what goods are in demand.
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Taiwan: Dealing with Crises (1970s-1990s)
Example: Oil Crisis
- Analysis of the role of government in guiding the economy
At the root cause, the government was most fundamental in guiding the
through difficult times – Root cause analysis to show that Taiwanese economy. In a global environment where countries were mainly
focused on protecting their own interests, wise government policies by the TW
the government is the most fundamental reason for TW’s government was able to counteract the worst of the 1973 oil crisis and lead to a
success steady rebound of 10% GDP growth per annum from 1975 onwards.
- Crises can be unpacked as the 1973 and 1979 oil crises. This highlights how fundamental the role of the government is in Taiwan’s
- Note the role played by other key agents of Taiwan’s economic success, since it is its policies that directly shape the outcome of the
economy.
economic success – To what extent were they present or
absent in this process?
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Example: Foreign Governments
US provided critical aid to South Korea in context of the Cold War which provided
the necessary capital to kickstart the economy in the earliest years.
Korea: Establishing Growth (1950s-1960s)
US aid constituted about 75% of imports from 1953 to 1960. Military aid
amounting to more than 1.5 billion USD went to development of infrastructure
- Key agents in establishing growth: Government, Foreign that was used for industrial production.
Governments, Multinational Corporations.
- Establishing growth refers to establishing socio-political Example: South Korean Government
stability, investment into agriculture for future Government played a critical role in shaping underlying context of Korea’s
economic environment which enabled external aid to have such a significant
industrialization, and the kickstarting of the impact.
industrialization process.
Effective land and agrarian reform helped lower cost of production through
- Note the nature of roles played by different agents in the wages and provided important tax revenue to develop strategic industries.
establishing of growth – How fundamental are they?
Example: Multinational Corporations
Multinational corporations indirectly assisted in the industrialization process by
providing sorely needed technological expertise to South Korean industrial
manufacturers.
Japanese MNC’s were crucial in providing developmental technology and
intermediate goods necessary for Korea’s shift to export-oriented industrialization
in the late 1960s.
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Example: Foreign Governments Example: Korean Government
While foreign aid dried up, the US Played a sustained role in
South Korea: Explosive Growth (1970s-1980s) was a key export base for South developing the economy by
Korea. Indirectly supported their providing the framework for
economic growth. private enterprises to lead growth
- Key agents in continuing growth: Government & Chaebols, in Korea.
Japan indirectly supported South
Foreign Governments, Multinational Corporations. Korean industries as South Korea Various tax policies implemented
to facilitate the rise of chaebols
- This period is marked by the shift towards export-oriented n was dependent on them for the
import of intermediate goods for and ensure that they would
industrialization. production lines in its industries. succeed in heavy industries.
- Note the roles played by different agents in terms of
fundamentality, direct influence and long-term impact.
Example: Multinational Example: Local Culture
Corporations
Chaebols played a direct role in
Indirectly provided the necessary leading growth in South Korea by
investments and technology to filling the gaps where state-
continue growth in South Korea, owned enterprises failed.
as well as factor inputs to sustain
Korea’s export-oriented Chaebols were essential in
industrialization. providing the initiative for
creating and implementing
Evidenced by Sanyo’s building of various plans of the government.
assembly plants in South Korea in They provided the necessary
the late 1970s. entrepreneurial edge for success.
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Example: Oil Crisis
South Korea: Dealing with Crises (1970s-1990s) At the root cause, the government in their role as crisis managers were most
fundamental in ensuring South Korea’s success.
- Analysis of the role of government in guiding the economy While their traditional external partners clammed up during the oil crises, the
Korean government was key in sustaining economic growth. They sent several
through difficult times – Root cause analysis to show that private construction firms to the Middle East, including Hyundai and Daewoo tot
the government is the most fundamental reason for TW’s take advantage of projects as soon as the South Vietnam construction market was
closed. Remittances on GDP growth rates was an increase between 1.3% and 7.1%
success from 1976 to 1981.
- Crises can be unpacked as the 1973,1979 oil crises and
shortcomings of the Chaebols. Example: Unhinged Chaebols
- Note the role played by other key agents of South Korea’s
The failure of the Korean government in regulating chaebols and their subsequent
economic success – To what extent were they present or failure also highlights the fundamentality of the government’s role.
absent in this process? As Chaebols grew too large, they were less willing to accept state direction.
Chaebol borrowing grew increasingly out of hand from the late 80s onwards and
by 1990s was out of control. By 1997, South Korea had an estimated 4.2 billion
dollars in bad short-term loans and provided the context for the catalyzing the
1997 Asian Financial Crisis.
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Sample Introduction
Identifying evaluative handles
This question requires an analysis of various factors that led to the sustained nature of
the economic miracle in South Korea. In analysing the sustained nature, we must look at
the factors that aided SK in prospering as it transitioned to a more export-oriented
Sample Essay Question economy. In the transitioning into heavy-export industries in the 1970s, Chaebols
arguably played a more direct role in sustaining the growth of the SK economy. Yet, much
must be attributed to the SK government for creating a favourable underlying context for
these Chaebols to play such a huge role. Furthermore, the indirect aid provided by other
Assess the reasons for the sustained economic miracle in South Korea. nations such as US and Japan were critical in contributing indirectly to the successes of
the Korean economy. However, ultimately, the SK government proved to be the most
What does this question require? -> An analysis of the most important agent that led to fundamental and sustained reason for Korea's sustained economic success, amidst poor
SK’s economic miracle from 1970 to 1990s. global economic trading conditions and the spectacular failure of the chaebols in the 90s.
As such, this essay posits that the SK government was effectively the most instrumental
in dictating SK's sustained economic miracle.
Since question already presupposes the sustained nature of factors, it might be wiser to
focus on other angles of analysis.
Potential angles of analysis
1. Direct/Indirect
2. Sustained nature of impact
3. Fundamentality
Demonstrating awareness of timelines in
South Korea’s growth
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