Post-Crisis Economic Performance in East Asia: Recovery or Sustained Decline?

Post-crisis Economic Performance in East Asia: Recovery or Sustained Decline?

                                   Moazzem Hossain, Griffith University

                        170 Kessels Road, Nathan, Queensland 4111 Australia

                                         M.Hossain@griffith.edu.au

Abstract:  The last twenty five years are characterized by a phenomenal growth in East and Southeast Asian countries. In contrast, other countries in Asia performed moderately over this period. In this paper an attempt has been made to capture the overall economic performance of the countries of the above regions since 1997 financial crisis. A comparative analysis of various East Asian nations (including countries of Southeast Asia, from now on regarded as East Asia) will be carried out in terms of economic factors such as growth rate, savings, investment, exports and imports over the last ten years.  Social progress will also be analysed. This analysis will at least contribute partly to answer the frequently raised questions in the literature: why have the East Asian countries have been continuing growing over such a long period of time? Why they were subject to financial crisis in 1997? Was there a full recovery after ten years of the crisis?

Keywords: Economic growth, East Asian crisis, Recovery, Sustained decline , East Asia

1. INTRODUCTION

East Asia made a major break through in the economic development process in the 1970s and 1980s (Islam and Chowdhury 2001; Hossain. Islam and Kibria 1999).  Over these twenty years countries in East Asia have not only been successful in making progress in economic development but gained the status of New Newly Industrialized Countries (NNICs). In this regard the countries like Thailand, Malaysia and Indonesia have been referred to frequently. However, in recent years these countries have been facing some major crisis most importantly the financial crisis of 1997. In the analysis below we would like to present the economic performances between the period of 1993 and 2003 (before and after the crisis) and what prospects for the future?

2. AN OVERVIEW OF ECONOMIC PERFORMANCE

With the help of Tables 1 to 7 the overall performances of the economic indicators in East Asia have been captured.

2.1 Growth Performance

Table 1 presents the information from seven East Asian countries on comparative sectoral (agricultural and industrial) and overall growth performance between the period of 1983-93 and 1993-2005. In aggregate, China has achieved a constant rate of growth of 8.6 per cent per year followed by Vietnam which grew more than 7 per cent during ten years between 1993 and 2003. These are the two nations in the region those were not hit by the currency crisis of 1997.  The crisis hit nations, however, grew moderately over the period of 1993 and 2005.  For instance, Table 1 suggests that Korean growth rate was 5 per cent which was followed by Malaysia (4.7 per cent), the Philippines (3.9 per cent), Thailand (2.2 per cent) and Indonesia (2.0 per cent).