See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/343510483

ECONOMIC DEVELOPMENT OF THE ASIAN TIGERS: LESSONS FOR NIGERIA

Article · September 2018

CITATIONS READS

0 3,878

2 authors:

Agba Emeka Augustine Patience Ozor

Igbinedion University Igbinedion University
10 PUBLICATIONS   0 CITATIONS    6 PUBLICATIONS   0 CITATIONS   

SEE PROFILE SEE PROFILE

Some of the authors of this publication are also working on these related projects:

Climate Change, Agricultural Output and Economic Growth in Nigeria View project

All content following this page was uploaded by Agba Emeka Augustine on 07 August 2020.

The user has requested enhancement of the downloaded file.

ECONOMIC DEVELOPMENT OF THE ASIAN TIGERS: LESSONS FOR NIGERIA
By
Agba, Augustine Emeka, Ph.D
Ozor, Patience Lilian

Abstract

The research is a study of the economic development policies of the Asian tigers and the lessons
for Africa’s most populous nation, Nigeria. The place of the Asian tigers in 21 st century
development studies have become important because as recently as the early 1960s the
economies of these Asian Tigers were considered to be a part of the third world. Since then
however, the four tigers of South Korea, Taiwan, Singapore, and Hong Kong have consistently
maintained high levels of economic growth, fuelled by exports and rapid industrialization,
which enabled these economies to join the ranks of the world's richest nations. South Korea
and Taiwan in particular have become important hubs of global manufacturing in
automobile/electronic components and information technology. This is termed the ‘Asian
Miracle. Interestingly, this research tries to unveil this puzzle. Indeed, many other developing
economies since the 1960s have remained where they are or are even worse off. The research
aimed to answer the pertinent question which is ‘how did they achieve it?’ While many scholars
have tagged this feat a miracle, this study found out that there were some similar features about
all the tigers in their transition from underdeveloped states to wealthy-developed states in just
a span of three or four decades. The research discovered that large-scale agriculture, trade
export, educational reforms, establishment of heavy and hi-tech industries, limited budget
deficits and limited external debt all contributed to the rapid growth of the tigers. The research
concluded that Nigeria has a lot to learn as she continually grapples with development. She
must diversify her economy beyond oil and expand her scale of agriculture to increase
agricultural exports, improved micro-economic policies that will limit external borrowing and
budget deficits, avert capital flight and ensure proper re-investment of funds into the economy.

Key Words: Asian Tigers, Economic Development

An Introduction

The Asian continent had historically been a prosperous one before the advent of colonial
exploitation in about the 19th century. The Mughal period (1526–1858 AD) in India and the
various Chinese dynasties were all more economically prosperous than many other regions of
the world at the time. The continent is the birthplace of all the earliest known civilizations.
Present day Iraq, Kuwait, and Northern Syria, was the famous Mesopotamia that is highly
renowned as the birth of numerical mathematics. It is the source of the 60-minute hour, 24 hour
day, and 360-degree circle amongst many other advancements made. The three major religions
of the world which are the Revealed Regions all have their roots in the Asian continent. This

1
accounts for the continent as the world’s centre to religious pilgrimage which is a good source
of revenue for the region.
Colonialism however, thwarted the development of Asia as resources were hugely exploited
by the British and the Dutch using the British East India Company during the advent of
industrial capitalism in 18th century Europe. Towards the middle of the 20th century, the First
and Second World Wars also devastated Asian economies especially as it was violently
scrambled for. But with the wars over, and with independence of many Asian countries in the
late 1940s, a rebuilding process begun, a step towards a height that will later become a model
of development evolved (Bhattacharjea, 2008).
By the 1950s when many Asian countries were now independent, many of these countries were
among the poorest and least developed nations of the world (Chang, Ha-Joon et al, 2004), but
today Asia has achieved unprecedented growth and development and has become hub of rapid
industrialization that makes many of its economies especially from the East, the most wealthy
economies of the world.

The economies of East Asia is one of the most successful in the Asian region and the most
successful ‘regional economies’ of the world since the late 20th century. It now accounts for
some of the largest economies of the world which include China, Japan, and the Asian Tigers.
Of interest in this study however would be the economies of the Asian Tigers which comprises
of Singapore, Hong Kong, Taiwan, and South Korea. Their average economic growth rates
from the late 1950s to the late 20th century surpassed that of Europe and America (Harvey,
Charles et al, 2002). Their success has been tagged the ‘Asian Miracle’ because of the level of
advancement they have achieved in such little a period. In truth, these economies took only
about three decades to become amongst the wealthiest economies in the global system. Their
success story has equally negated many traditional perceptions on development hitherto held.

The interest on the East Asian experience has been further increased because those economies
have grown fast, undertaken deep economic, social and technological changes and some are
catching-up with (or, as in the case of Japan, China, and South Korea have overtaken) the most
advanced economies, whereas most of the developing world has failed to fulfil the promises of
the sixties and seventies. This raises the questions of what is the cause of that success, what
lessons are there to be learned, and whether the East Asian experience can be replicated in other
‘Less Developed Countries’. This will be the focus of this research as it aims to assess the key
features that enabled the Tigers to progress, and show what lessons Nigeria can learn from this
success story.

2
The Asian Tigers

The term ‘Asian Tigers’ refers to the developed economies of Hong Kong, Singapore, South
Korea, and Taiwan. The development pattern of the East Asian economies is not entirely
unique. Hence, each country had its own trait. Hong Kong’s economy was the first out of the
four to undergo industrialization with the development of the textile industry in the 1950s. By
the 1960s, manufacturing in the British colony had expanded and diversified to include
clothing, electronics and plastics for export orientation (Vogel, 1991). Following Singapore’s
independence from Malaysia, the Economic Development Board formulated and implemented
national economic strategies to promote the country’s manufacturing sector. Industrial estates
were set up and foreign investment was attracted to the country with tax incentives. Meanwhile,
Taiwan and South Korea began to industrialize in the mid-1960s with heavy government
involvement including initiatives and policies. Export-orientated industrialization was
followed by both countries (Krugman, 1994). A more detailed case of each Tiger would be
assessed to view how each sought its own advancement and what has become unique for each
of the Tigers.
South Korea: After the Korean war of the 1950s, US aided South Korea in developing its
market by subsidizing 70% of South Korea’s exports (Collins, 1990). This subsidy implied that
Koreans could sell products such as rice on the world market for greatly reduced prices (since
the United States government was shouldering most of the cost), giving Korean exports a
significant advantage over the exports of other developing economies (Kim C, 2005). This
advantage helped Korea’s transition from a subsistence economy producing largely agricultural
products (like rice) to a major manufacturer of goods in just seven years (1953-1960).
Following this, the South Korean government instituted very good economic policies, funding
excellent education programs in public schools and building vital infrastructure for their cities
and ports. This helped to give the nation an unusually easy transition into the second stage of
economic development, and over time this meant that the country gradually became a wealthy
nation through consistent growth followed by reinvestment in the economy (Shin, 2003). Thus,
it has been a long road from the war devastation to its current position as a member of the G20
economies.
Taiwan: The case of Taiwan is quite similar to South Korea. In 1927, a war broke out between
Chinese capitalists (represented by the Kuomintang) and the Communist Party of China under
the leadership of Mao Zedong (Wu, 2004). The war lasted until 1949, when the Communists
eventually took over the Chinese mainland and the pro-capitalist Kuomintang were forced to

3
retreat to the small island of Taiwan, where they established a new economy based on free-
market principles (HO, 1987). Beginning as a largely impoverished nation, Taiwan has grown
to become one of world’s economic leaders with a quality of life similar to wealthy European
countries (Sobel et al, 2010). Their consistent economic growth has made them one of the select
few members of the Asian economies (Chang, 1995).
Singapore: Like the other Asian Tigers, the city-state of Singapore was an undeveloped country
about fifty years ago. Today, it is one of the world’s fastest growing economies. For a country
that lacks sufficient territory and natural resources, Singapore’s economic ascendancy is
nothing short of remarkable. It is located on the Southern tip of the Malaysian Peninsula, and
it is the third-smallest country in the world in terms of land mass after Monaco and the Vatican
City. Singapore is more often described as a city rather than a country (Huff, 1987). Singapore
was previously owned by the British Empire until it was invaded and conquered by Japan in
1942 during the Second World War; but when Japan was defeated at the end of the war,
precisely in 1945, Singapore reverted back as a British protectorate until it became a sovereign
state in 1965 after a strong anti-colonial protest. Upon independence, Singapore experienced
increased problems. Much of the city-state’s three million people were unemployed and more
than two-thirds of its population were living in slums and in abject poverty. According to
Harvey (2002), Singapore’s success as a rapidly growing economy is perhaps the most easily
explained of the Four Asian Tigers and its long road to economic prosperity is evident as it has
become the global hub of tourism and a global financial center.
Hong Kong: From a relatively unpopulated territory at the beginning of the nineteenth century,
Hong Kong has grown to become one of the most important international financial centres in
the world (SO, 1986). The country has undergone rapid industrialization especially during the
1980s and 1990s that has captured the imagination of many.
Figure 1: Showing Economic Growth of Asian Tigers and Japan

4
Development Policies
The spectacular growth of many economies in East Asia over the past 30 years has amazed the
economics profession and has evoked a torrent of books and articles attempting to explain the
phenomenon. Research on reasons behind the successful transformation of these economies to
First World economies have continued to linger. As already stated, their success story is
referred to as the “Asian Miracle”. Some of the economies of this region include Hong Kong,
South Korea, Singapore, and Taiwan Province of China, Japan, Malaysia, Indonesia etc. Since
1960, Asia, the largest and most populous of the continents, has become richer faster than any
other region of the world. Of course, this growth has not occurred at the same pace all over the
continent (Cohen, 2012). According to Chang et al (2004), the western part of Asia grew during
this period at about the same rate as the rest of the world, but, as a whole, the eastern half (ten
countries: China, Hong Kong, Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore,
Taiwan Province of China, and Thailand) turned in a superior performance. This unprecedented
advancement is, however, still modest compared with the phenomenal growth of Hong Kong,
South Korea, Singapore, and Taiwan Province of China, known as the “Four Tigers” because
of their powerful and intimidating economic performance (Garran, 1998).
According to this model, a country begins with the export of inexpensive products, then
educates its workforce and moves to more lucrative industries (Reference). As recently as the
early 1960s these economies were considered to be a part of the third world. Since then
however, the four Asian tigers consistently maintained high levels of economic growth, fuelled
by exports and rapid industrialization, which enabled these economies to join the ranks of the
world’s richest nations (Harvey, 2002). Hong Kong and Singapore are among the biggest
financial centres worldwide, while South Korea and Taiwan are important hubs of global
manufacturing in automobile/electronic components and information technology, respectively.
The model by which these economies of the Asian Tigers have developed is termed “East Asian
development model”. The following were some of the major development policies for some or
all:
Firstly, Agriculture played a pivotal role in the emergence of the Asian Tigers. At their initial
stages of development, they were largely agrarian economies that transited from agricultural
self-sufficiency to agricultural commercialization. This phase was marked by export growth
that resulted in the transformation of light industries to heavy industries (Rainis, 1991). These
economies begun to improve their growth rate through continuous export of cash crops to the
world market. For Korea, its first phase of development constituted recovery from the
devastation of the war, with an average of 30% of US foreign aid going towards agricultural

5
equipment. This created the enabling platform for South Korea’s agricultural exports under US
influence. Taiwanese take-off point was from an agrarian economy as well. By the 1950s, the
economy had become largely agrarian following the end of the Second World War, engaging
in agricultural exports in rice, sugar and pineapples, basic food processing plants. Agriculture
was majorly the take-off stage for the Tigers, and it resulted to expanded revenues through
increased export (Alwyn,1995).
Secondly, Trade policy and Foreign Investment was another key feature of the Tigers
development. With expanded agriculture, trade and investment became the key policies that
contributed to the economic growth of the Asian tigers. Starting in the 1960s, the capitalist
regime in Taiwan decided to lower tariffs (taxes) on all exported goods (Krugman, 1994). But
the same measure was applied to imported goods. This stage saw the rise of light industries not
just in agriculture, but in textile production. This phase remained significant up to the 1980s,
and after the 1980s, heavy industries were quickly established, in steel, electronics
petrochemical amongst others. Also with abundant infrastructure and with the civil conflict in
neighbouring China, wealthy global corporations began to flock to Taiwan and construct
factories, using its cheap labor to produce clothes and other knickknacks (such as small toys or
ornaments) at a very low cost. This boom in foreign investment once again gave the
government a surge of wealth, which it used for investments in infrastructure which included
the building of highways, seaports, airports and power plants (Harvey, 2002).
In order to attract investors, Singapore had to create an environment that was safe, corruption-
free, low in taxation, and unimpeded by unions. Thus, since the 1970s, Singapore enjoyed a
rapid rise in incomes as a result of a boom in foreign investment (Cohen, 2012).
Figure 2: Showing the growth in Income per capita of Select countries from 1975 to 2010

Income Per capita in $

30000
25000
20000
15000
10000
5000
0

1975 2010

Source: Maddison Database 2010

6
In 1972, just seven years after independence, foreign-owned or joint-venture companies from
both the U.S. and Japan flourished in Singapore causing increased Gross Domestic Product
(GDP) experienced annually (Chang, 2004). As foreign investment poured in, Singapore began
focusing on developing its infrastructure. The country took advantage of its perfect geographic
location that is highly suitable for global commerce to construct seaports. Being a country at
the Malaysian peninsula, a region suitable for international trade because every ship going from
Japan, China or Korea must pass right beside the peninsula to get to Europe, Singapore took
the advantage to become a global commercial center to enhance international trade. The region
then became an abode for petrochemical refineries (Cohen, 2012). Hence, oil ships carrying oil
from the Middle East to Japan and China would have a stop-over in Singapore to refine their
chemicals, and continue with their cargo voyage. This phase brought about unprecedented
revenue for Singapore. While foreign inward investment has continued to experience a boom
in Singapore with over 3,000 multinational corporations from the United States, Japan, and
Europe found in almost all sectors of the economy due to the Singaporean corrupt-free
government, skilled workforce, and advanced infrastructure, the government also has
encouraged indigenous firms to invest outside Singapore, and this has also resulted in large
overseas investments in the People’s Republic of China as top destination, followed by
Malaysia, Hong Kong, Indonesia and the now the US (Banuri, 2013).
In 1900, Hong Kong’s trading seaport was amongst the largest in the world, attracting large
amounts of foreign investment from companies in both China and Europe. This city received
another sudden boost in foreign direct investment in the 1940s, when China’s Communist Party
began winning the civil war; hundreds of Chinese merchants fled China, fearing that the
Communist government might take over their business. Many of these merchants set up shop
in Hong Kong, where they were allowed to continue doing business without government
interference (SO, 1996). Nevertheless, industrialization accelerated after 1949 with the inflow
of refugees and entrepreneurs. Hong Kong’s citizens gradually became much wealthier than
the residents of other Asian nations as the city continued to attract copious amounts of foreign
investment. By the 1960s, Hong Kong was one of Earth’s major producers of textiles (clothes
and carpets). During this time, small and medium scale enterprises were the basic industries
(Banuri, 2013). They became largely progressive in the textile sector before gradually
diversifying in the 1960s to clothing, plastics, and electronics’ production mainly for export. It
used this continuous inflow of wealth to build vital infrastructure, including highways, subway
systems and high-rise buildings at breath-taking speed. Hong Kong today has expanded its
trade products and trade destinations. It has become amongst the world’s largest exporter of

7
Jewellery, gold and silver wares, electrical machineries, electrical parts, medical and
pharmaceutical products. Their major market destinations are the US, Japan, India, Europe,
and Africa etc (Cohen, 2012).
Another major policy-feature of the Tigers’ development was Education, Technology, and
Industrialization. This phase was marked by governance that centered on industrial and macro-
economic policies. This period was known for the improvement of quality labour for the
industrialization through education. The quality labour for industrial production was
consequent of the emergent educational class. Korea in particular, gradually became one of the
best educated countries in the world, with one of the highest rates of scientific literacy and
mathematical knowledge.
Figure 3: Showing Average number of years of Schooling in South Korea and other Selected Countries

It’s highly skilled, technologically educated public caused Korea to eventually become one of
the world’s foremost exporters of high-tech goods, including software and electronics; South
Korea is the world’s leading producer of memory chips, and its Samsung Company is a
corporate giant which exports various electronics including televisions, microwaves, cell
phones, air conditioners and washing machines (Banuri, 2013). Also the evolution of high
technological industries from the 1990s became the breakthrough period for some the tigers
like South Korea and Taiwan (Chang, 1995). Prominent among the Korean high tech industries

8
which are amongst the global leading developers of technology include: the Conglomerates of
Hyundai (Hyundai Electronics, Hyunndai Construction and Engineering, Hyundai Motor
Company, etc) and LG (LG Electronics, LG Telecom etc), Kia Motor Company, Samsung etc.
Today, South Korea is a booming trillion dollar economy. Its citizens enjoy very high incomes
and a standard of living rivaling that of even traditionally wealthy nations such as Britain and
Germany. It boasts the world’s greatest number of people with internet access. In the center of
this new economy lies the spectacular city of Seoul; with its skyscrapers sparkling, a modern
miracle of economic development.

Figure 4: Showing Gross National Income per capita in South Korea and other Selected Countries

Like South Korea, Taiwan also invested in technological education, creating a generation of
students familiar to produce high-tech products. Both of these investments caused Taiwan’s
industrial production and exports to grow rapidly. During the 1980s, Taiwan used its skilled
students to shift to an economy based on production of computer hardware and software; by
2003, 30% of the world’s computer products were made in Taiwan, and incomes were
relatively high (averaging $14 000 per person). High food production in part by US foreign aid
that supported the capitalist regime, combined with low tariffs, good infrastructure and a highly
educated population made Taiwan into one of the most prosperous economies in all of Asia
and the world (Cohen, 2012). Today Taiwan has numerous heavy industries which include Neo
Solar Power industries.

9
Singapore used this continued surge in wealth to invest in public education. The country set up
many technical schools and paid international corporations to train their unskilled workers in
information technology, petrochemicals, and electronics. The strategy of having multinationals
educate their workforce paid great dividends for the country. Soon the country had a skilled
workforce skilled in computer engineering. This made Singapore to become a major exporter
of computer hardware, generating further wealth in the region (Huff, 1987). By the 1990s,
Singapore was already engaged in biotech research, pharmaceuticals, integrated circuit design,
and aerospace engineering. Also, by the time Hong Kong families became wealthier, they could
now afford to send their children to school, causing the city became rapidly well-educated.
Hong Kong soon became one of the world’s leading manufacturers of computer hardware,
software and other electronics such as televisions, radio and microwaves (Krugman,1994).
Besides the policies stated above which include agriculture, trade and investment, educative
technology and industrialization, there were other development policies that centred on
financial intelligence. All the Tigers for instance, had ‘Limited Budget Deficits’ during the
periods of their transition (Alwyn, 1995). A budget deficit is a situation where government
budgets more spending than the available revenue to cover the estimated expenditure for the
fiscal period usually a year. The four tiger nation’s budget deficits were maintained within their
financial limits and this was in other to retain economic stability. In addition, most of the Tigers
had ‘Limited External debt’.

Figure 4: Showing the disparity between Gross Internal Revenue and External Debt for the Asian Tigers

Source: IMF & World Bank Reports

10
External debt was non-existent for Hong Kong, Singapore and Taiwan, as they did not borrow
from abroad. Although South Korea was the exception to this -its debt to GNP ratio was quite
high during the period 1980-1985, it was sustained by the country’s high level of exports
(Chang, 2004).

Figure 5: Showing the growth in Gross Domestic Product per capita from 1960 to a projected 2020 for the four Asian Tigers

The Lessons for Nigeria

The spectacular economic growth of the Asian Tigers has amazed theorists in many fields but
most notable development studies, economics, and International Relations. Their economic
advancement has evoked a torrent of books and articles attempting to explain the phenomenon.
Their growth rates, sustained over a 30-year period, are simply amazing. Scholars have
attributed the success of the economies of the East Asian region, particularly the Tigers, that
is, Hong Kong, Korea, Singapore, and Taiwan Province of China as “miraculous.” This section
of this paper attempts to identify the reasons for the extraordinary economic growth among
these East Asian economies and try to highlight what lessons Nigeria, a developing economy\
can learn. Nigeria is Africa’s most populous country, and has one the largest economy in
continent, yet the country is still backward in terms of economic development. Because
development in the country is slow, further crisis such as increased poverty, conflict, rising
debt etc has plagued the country causing further retrogression.

11
Basically, Nigeria has been a mono-based economy. The oil boom of the 1970s led Nigeria to
neglect its strong agricultural and light manufacturing bases in favor of an unhealthy
dependence on crude oil. In 2002 oil and gas exports accounted for more than 98% of export
earnings and about 83% of federal government revenue. New oil wealth, the concurrent decline
of other economic sectors, and a lurch toward a statist economic model fueled massive
migration to the cities and led to increasingly widespread poverty, especially in rural areas. A
collapse of basic infrastructure and social services since the early 1980s accompanied this
trend. By 2002 Nigeria's per capita income had plunged to about one-quarter of its mid-1970s
high, below the level at independence.

Figure 6: Showing the Economic Growth of the Nigerian Economy under Selected Years

Source: Nigeria Bureau of Statistics

Agriculture has suffered from years of mismanagement, inconsistent and poorly conceived
government policies, and the lack of basic infrastructure. Still, the sector accounts for over 41%
of GDP and two-thirds of employment. Nigeria is no longer a major exporter of cocoa,
groundnuts (peanuts), rubber, and palm oil. Cocoa production, mostly from obsolete varieties
and overage trees, is stagnant at around 180,000 tons annually; 25 years ago it was 300,000
tons. An even more dramatic decline in groundnut and palm oil production also has taken place.
Once the biggest poultry producer in Africa, corporate poultry output has been slashed from
40 million birds annually to about 18 million.
Oil dependency, and the allure it generated of great wealth through government contracts,
spawned other economic distortions. The country's high propensity to import means roughly
80% of government expenditures is recycled into foreign exchange. Cheap consumer imports,

12
resulting from a chronically overvalued Naira (Nigeria's currency), coupled with excessively
high domestic production costs due in part to erratic electricity and fuel supply, have pushed
down industrial capacity utilization to less than 30%. Many more Nigerian factories would
have closed except for relatively low labor costs (10%-15%). Domestic manufacturers,
especially pharmaceuticals and textiles, have lost their ability to compete in traditional regional
markets.
But just about 30 years ago, the Asian Tigers were in almost the same conditions as Nigeria,
but today their conditions has seen them evolve from third world to first world economies, and
they have become amongst the wealthiest economies in the world. They have a first class
infrastructure and their citizens are wealthy and well employed. But if 30 years ago, they were
at the same stage with Nigeria, how did they evolve to this present stage? What did they do
that Nigeria has not done? And what must Nigeria start doing today? This study has highlighted
selected factors that can be the basis for this:
Education and Technology: On the overall, one of the major factors as observed in the
development stages of the Tigers, was the emergence of the educated class that had a mastery
over technology. According to Krugman (1994), the success of the Asian Tigers emphasizes
the role of technology in their high growth rates and focuses on the fast technological catch-up
in these economies. In this view, these economies have succeeded because they learned or were
educated about the use of technology faster and more efficiently than other regions did.

Education in particular is cited as playing a major role in the mastery of technology. The levels
of educational enrolment in the four Asian tigers were higher than predicted given their level
of income. Harvey (2002) explained that by 1965, all four nations had achieved universal
primary education. South Korea in particular had achieved a secondary education enrolment
rate of 88% by the end of 1987. There was also a notable decrease in the gap between male and
female enrolments during the Asian miracle. Overall these progresses in education allowed for
high levels of literacy, cognitive skills, and highly productive labour force. Krugman (1994)
explains that significant economic resource was channelled to education at all levels, and
compulsory education was imposed on primary and high school education. Cohen (2012) also
posits that large amount of financial resources was geared towards improving college and
university system that brought about increased levels of human capital development in the tiger
countries. This education reforms attained through adopt of foreign knowledge and technology
began to yield capital productivity. Hence, the technological catch up was significant to the

13
Asian tiger’s growth as educational attainment was marred with practical knowledge, and thus
emerged the educated class that provided skilled-labour for the emerging industries.

Nigeria is a country with one of the highest number universities in the world. It is a country
with close to 200 universities. Unfortunately, it is not the quantity, but the quality that is
required to achieve unprecedented economic growth. The educational system in Nigeria rarely
provides skilled-labour for industrial operations. Most graduates in Nigeria are not just
unemployed, but are unemployable. There is thus, the need for a change in the Nigerian
educational system. And it is also important that the platforms for ‘technology’ to be attractive,
assimilated, and mastered, should become the hallmark of any educational reform that will
improve human capital development in Nigeria. Hence, except there is a revolution in Nigeria’s
education system where potential graduates are impacted with practical knowledge in diverse
fields, graduates will only continue to emerge in quantity but not quality, and the search for the
indigenous skill-labour that will industrialize Nigeria to become amongst the industrialized
nations of the world will remain elusive. Thus, every field of study in the Nigerian university
system must be adjusted to have an entrepreneurial content, and secondly, a practical course
on technology should become imperative for all students regardless of the major field of study.

Passion and Will-Power: It is argued that East Asian populations especially from the Tigers’
countries have demonstrated rapid learning capabilities and that perhaps best explains why the
education of a work force would have easily translated to skilled-labour force for these
economies. But learning only comes when there is a will to know. Many of these East Asian
countries have had the will-power, the passion, zeal, to advance. In a nutshell, they have been
highly inquisitive people. Besides education, small and medium scale entrepreneurs made their
own impact through little craftsmanship that advanced to larger entrepreneurial industries.
These Asian economies became interested in doing everything that the west did. They were
interested in making every manufactured goods made in the west. That is the power of
inquisition. The will to develop was there, and it was pragmatically pursued. Nigeria, is a
country where the zeal to acquire knowledge is on the decline. A large number of young minds
are not interested in acquiring skills on industrial production, and this is evident with the high
rate of illiteracy and traditional belief systems. But also a growing trend of zealousness to
become artists in diverse forms in the country erodes any passion for scientific revolution. In
addition, rewards for performing artists have surged higher than rewards for scientific
performance in Nigeria, causing many young minds to rather pursue a dream or career in
performing arts than in scientific research. The trend is rapidly increasing and many young

14
minds in school are not passionate for scientific breakthroughs but are dreaming of that
opportunity to break into performing arts.

Factor Accumulation: Factor accumulation as defined by the Economic Glossary is an

increase in the quantity of basic factors used to produce goods and services in the economy.
An example is labour, or capital, and entrepreneurship. Increases in these “factors of
production” allow an economy to increase the production of goods and services and thus in the
long-run expansion of the economy’s ability to produce output that is, economic growth.
Economic growth however, is made possible not only by expanding the quantity of the
economy’s resources, but also by enhancing their quality as we already stated above when we
discussed ‘human capital development’ under education and technology.
The levels of physical and human capital amongst the four Tiger countries far exceeded other
countries at similar levels of development at the end of the 1960s (Harvey, 2002). This
afterwards led to a rapid growth in per capital income levels (Chang, 2004). Nigeria is a country
of vast land, and has capital too. The country has a sizeable labour force, though not of the
quality to be highly productive yet. But quality education and students inquisition as explained
above can provide a qualitative labour force. Nigeria also has a middle class of entrepreneurs
although with slow expansion due to challenges such as power supply problems, security risk,
and inadequate innovative ideas to enhance quality productions. Nigeria must therefore exploit
the advantage of her vast lands and improve quality labour while increasing capital investment,
but at the same time reducing the challenges for entrepreneurial growth. This will lead to
increased productivity in the country in diverse areas, and the country will be able to yield more
capital accumulation and increased economic growth.
Export and Import Policies: Unknown to many, international trade has been a crucial
determinant factor for growth and development for most states within the global system. A
crunch of a nation’s overall revenue comes from its export earnings. And thus, the higher your
exports, the more expansive your revenue base will be. And this is why countries that sell more
expensive products, especially automobiles, electronics, and other technological products make
huge revenues from international trade more than those that simply supply cheap raw materials.
According to Garran (1998), export policies have been the de facto reason for the rise of these
four Asian tiger economies. The approach taken has been different among the four nations.
Hong Kong, and Singapore were neoliberal in policies and encouraged free trade, while South
Korea and Taiwan adopted policies that had more control on their own export industries. But
interestingly, both South Korea and Taiwan introduced export incentives for the traded-goods

15
in the export sector to attract buyers in the global market. The governments of Singapore, South
Korea and Taiwan also worked to promote specific exporting industries, especially in those
sectors most needed to derive massive revenues from international trade. This was viewed as
an ‘export-push strategy’. All these policies helped these four nations to achieve trade surplus,
and a growth averaging 7.5% each year for three decades and as such they achieved developed-
country status (Kim, 2005). When a country experiences trade surplus because of its export
polices, it experiences an accruement of capital that increases national wealth. Interestingly, all
of the tigers in one way or another became some of the leading exporters to the U.S.
From the above, it is obvious that the government of these Tigers were so involved in their
development. Why can’t the Nigerian government promote export trade for even small
industries by giving them incentives? Why can’t the Nigerian government also place incentives
on Nigerian exports to increase global attraction? These are avenues that can increase foreign
earnings in global trade. The Nigerian government needs to diversify her economy and
transcend from a mono-economic system that is oil based. Hence, the country needs a new
lease where production of agricultural products and other non-oil products must expand to
increase exports on the global market and create widening trade surpluses so as to experience
the desired economic transformation.
Figure 7: Showing the volume of exports and imports by region (2010 -2015)

16
The above chart shows the export and import growth of Asia from 2010-2015. The chart shows
that export growth in Asia was highest than other regions of the world and the Tigers growth
has been a major cause for this. Also the chart shows that export growth remained higher than
import growth causing consistent trade surplus. For a country like Nigeria, a once ‘agrarian
economy’ to now an ‘oil-based economy’, export growth has remained relatively low. The
discovery of oil in the 1970s resulted to a sharp decline of the volume of agricultural exports,
and the incessant unpredictable oil price falls has not helped the Nigerian economy. More so,
the country’s volume of importation has continued to rise as the country has become a dumping
ground for western fairly used goods, and the trend is not abating. Hence, if the Nigeria’s trade
deficit does not decline, development may continue to be far-off from Africa’s most populous
country.

Administration and Governance: The governments of the Asian Tigers were investing in
development projects specifically human and capital development using proceeds from the
capital accumulation rather than divert to private accounts. Nigeria is a country where
corruption has become so endemic over the years and this has increasingly become a major
stumbling block to the nation’s growth and development in every sector of the economy.
Studies in the development of the Tigers show that external aid was part of a foundational
process that begun their ascendancy. Arguments about the aid-efficacy in developing
economies have continued to be a debate (Alwyn, 1995). However, if the Tigers like South
Korea benefited from US aid in the recovery process after the war albeit vested interest, it
unveils therefore that external aid, if properly managed under non-corrupt administrations, can
be efficacious to a large extent. Studies show that the Tigers utilized public funds in the
development of their economies. Nigeria has had an endemic problem in public expenditure.
Public funds most times end up in private accounts. This has been a recurring problem. Some
funds stolen in what is now described as the “Abacha loot” is still being recovered in 2018 for
a recovery process that begun as far back as the early 2000s. Stunted growth of major
government corporations like Nigerian Telecommunications (NITEL), Power Holding
Corporation of Nigeria (PHCN), Nigerian Railway Corporation, Nigerian Postal Services etc
are evidences of the poor administration in Nigeria. Corruption and development cannot
synergise together.

Macro-economic Policies: Macroeconomic policies adopted by these countries also

contributed significantly to the miracle of the Asian Tigers. The creation of stable
macroeconomic environments was part of the foundation upon which the Tigers’ ‘miracle’ was

17
built. Each of the four Asian tiger states managed, to various degrees their budget deficits,
external debt, and exchange rates. Budget deficit implies a situation where government budgets
more spending than the available revenue to cover the estimated expenditure for the fiscal
period of a year. According to Cohen (2012) the four tigers’ nation’s budget deficits were
maintained within their financial limits causing economic stability. Also, external debt was
non-existent for Hong Kong, Singapore and Taiwan, because they did not engage in external
borrowing. However, South Korea was an exception to this but the country was still able to
sustain stability because of the country’s high level of exports. There was also maintenance of
a stable real exchange rates in the four Asian tiger nations, thus preventing volatile exchange
rates.
Nigeria has suffered from debt crisis that caused the nation to hugely offset funds in debt
repayment during the early period of this Fourth Republic. Today, in this post-creditor era,
Nigeria is still borrowing and external debt is rising steadily again. The government must
minimized borrowing and explore other means to generate revenue. Diversification of the
economy, improving local industry performance and stirring export growth, and sincerity on
the part of government is needed to enhance revenue generation to avert too much borrowing
that only plunges a nation to debt crisis. The government must equally avoid budget deficits
and spend within financial capacity and avoid sourcing for external funds. The government
must establish a ‘Financial Intelligence Policy’ in other to avoid reckless spending and
borrowing. External borrowing was not part of the Tigers’ policies except South Korea but
their GDP value was equally high because of export growth. Our export growth is still low, as
we export basically oil. And that is not yet sufficient to yield high returns in foreign revenue to
balance the ratio to debts, especially taking cognisance of fluctuating oil prices in the oil
market.
Investment: Investment was equally key for all advancement of all the Tigers. While they
limited their foreign spending, they invested majorly in their nations. Unfortunately in Nigeria,
our so called leaders do not even invest at home. They purchase assets and properties in Europe,
Dubai or in the United States. Capital flight must be stopped.

CONCLUSION

This study was a qualitative research to discuss the state-led development model of the Asian
Tigers and the lessons for Nigeria. From the postulations above, one thing that is clear- that the

18
state-led model of development was successfully employed in the “Asian Miracle” of the
Tigers. These economies were not necessarily that free-market system that is devoid of state-
control as always argued by some scholars of the liberal school. This model describes a strong
central-state utilising a range of policy tools to aggressively pursue development even against
the wishes of market actors. This sees development follow a clear progression through, light
industry, heavy industries- chemical and textile industries, and then finally technological
industry, with the export revenue of each stage being used to fund the next.

The success of this development model of the Asian Tigers can be attributed to the leadership
of these states in their genuine pursuit of economic development. They effectively enacted
long-term plans for generating revenue and reinvestment generated revenue, while adapting to
the situation of the international economy. Interestingly, a state-led economy has every chance
of failing if it is not sufficiently stable, flexible, motivated, appropriately pursued to achieve
growth and development, as other cases suggest especially from the African experience with
Nigeria inclusive. Nigeria since independence has tried several state-led development
programs but most have failed to generate the desired growth and stability for the economy.
The reason for this is partly due to the nation’s overdependence on oil revenues, which
unfortunately have not been well invested over the years by her past leaders. At the same time,
the nation’s human capital development is still in need of rapid improvement to meet the
standards for a well-industrialized society. Lastly, the country does not seem anywhere near
possessing a skilled-labour class that can have genuine mastery of technology, and export this
technology. It is a country largely divided along ethnic and religious differences, and political
leaders from the country are not too keen in helping regions that show traits of intelligibility
and capacity for achievement due to the aforementioned differences.

The Asian Tigers provide us with interesting alternatives to developmental strategies.

However, the ‘miracle’ growth of these economies was largely down to good governance. Each
of the four ‘tigers’ has prioritized non-sentiments along religious or ethnic circles, strong
regulation and anti-corruption measures, while conservative economic plans have allowed each
country to avoid public debt and build up large reserves of capital and savings. This meant that
when crisis hit, they were only affected on a superficial level, and recovered almost
immediately. Interestingly, the Four Asian Tigers were so robust that they were able to weather
the 1997 Asian Financial Crisis (as well as the 2008 Global Financial Crisis) relatively

19
unscathed. Today, they regularly feature on the IMF’s list of the world’s most prosperous and
stable economies, and each country has developed its own highly successful niche.

Reference
Alwyn Young (1995). The tyranny of numbers: Confronting the statistical realities of the East
Asian growth experience. Quarterly Journal of Economics, CX(3):641–680, August
1995. HB1Q3.

Bhattacharjea, Aditya (2008). “Krugman’s Economics: An Introduction.” Economic and

Political Weekly 43:49, 2008.

Banuri, Tariq (2013). “Sustainable Development is the New Economic Paradigm.”

Development 56:2, 2013.

Chandavarkar, Anand (1986). “Was Keynes a Development Economist?” Economic and

Political Weekly 21:7, 1986.

Chang, Ha-Joon, et al (2004). Reclaiming Development: An Alternative Economic Policy

Manual. New York, USA: Zed Books.

Chang, Vincent (1995). “Developing the Information Industry in Taiwan: Entrepreneurial

State, Guerilla Capitalists, and Accomodative Technologists.” Pacific Affairs 68:4.
1995-6.

Cohen, Benjamin (2012). “Finance and Security in East Asia.” The Nexus of Economics,
Security and International Relations in East Asia. Eds. A. Goldstein and E.
Mansfield. California, USA: Stanford University Press.

Collins, Susan (1990). “Lessons from Korean Economic Growth.” The American Economic
Review 80:2,1990.

Garran, Robert (1998). Tigers Tamed: The End of the Asian Miracle. Hawaii, USA:
University of Hawaii Press.

Harvey, Charles, et al (2002) “New Regionalism in East Asia: How Does It Relate To The
East Asian Development Model?” ASEAN Economic Bulletin 19:2, 2002.

HO, Samuel (1987). “Economics, Economic Bureaucracy and Taiwan’s Economic

Development.” Pacific Affairs 60:2, 1987.

Huff, W.G (1987). “Patterns in the Economic Development of Singapore.” The Journal of
Developing Areas 21:3, 1987.

Kim, Chungil (2005). The History of Korea. Conneticut, USA: Greenwood.

Paul Krugman (1994). The myth of Asia’s miracle. Foreign Affairs, 73(6):62–78,
November/December 1994. D410F6.

20
 Rainis, Gustav (1991). “Towards a Model of Development.” In Liberalisation in the Process
of Economic Development. Eds. L. Krause and K Kihwan, California, USA:
University of California Press.

Shin, Dongmyeon (2003). Social and Economic Policies in Korea: Ideas, Networks and
Linkages. London, UK: Routledge Cuzon.

SO, Alvin (1986). “The Economic Success of Hong Kong: Insights from a World-Systems
Perspective.” Sociological Perspectives 29:2, 1986.

Sobel, Richard, et al (2010). “Taiwan Public Opinion Trends, 1998-2009.” Public Opinion
Quarterly 74:4, 2010.

Vogel, Ezra (1991). Four Little Dragons: The Spread of Industrialisation in East Asia.
Massachussets, USA: Harvard University Press.

Wade, Robert (1990). Governing the Market: Economic Theory and the Role of Government
in East Asian Industrialization. Princeton: Princeton University Press.

Wu, Yongping (2004). “Rethinking the Taiwanese Developmental State.” China Quarterly
177, 2004.

21

View publication stats