How the Government Played Important Roles in the Success of the East Asian Countries

Introduction

The government have played important roles in the success of the East Asian countries such as Singapore, South Korea, Taiwan and China; this is only possible with the government's ability to ensure macroeconomic stability as well as building long-term economic growth. In the following segments, I will be justifying why and how the above mentioned countries’ government had done based on the macroeconomic goals; which can be discussed in terms of the effects on the economic growth, the unemployment rate, price stability and balance of payments.

1. Key concepts

1.1 Economic growth

The first and most common way to measure a country's success is through its economic growth. A country’s economic growth can be measured by its ability to produce more goods and services compared to its last measurement. In other words, by saying that we use the same amount of effort used as previous measurement, we are able to achieve a greater output. In accordance to that, we can say that the country is able to implement a more efficient policy so as to achieve a better success. In addition, using the real Gross Domestic Price (GDP) as an indicator to see the increase in percentage increased from the previous timeframe set, we are then truly able to see if the country is experiencing economic growth.

1.2 Unemployment Rate

A country’s success can also be measured by the percentage change in the employment rate. Low unemployment rate means more of the citizens of the country are working, in other words, they are able to earn and create wealth. More wealth means more spending power, thus contributing to an increase in expenditure which in turns creates demand.

With more demand for goods and services, the country will then need to ensure that the supply can meet the demand by creating more job opportunities. More labourers mean more output in terms of having the supply meet the demand. However, this might also be an issue if the country does not have the manpower to do due to scarcity of human resource. This is when the country looks out for foreign investors, or even foreign workers.

With such implementation, it will create a competitive working environment as more and more jobs created goes to people who are willing to work for lower wedges as companies always go for lower production cost to maximise profit to achieve economies of scale. Therefore people will tend to work hard to produce more quality to keep their job.

In order to tackle the above situation, some countries then focus more on their education system to increase the literacy rate. By having a better education system, people will be more knowledgeable and become multi-talented in many aspects, thus able to produce better