Economics and Politics of Asia
Of the 24 countries in the parts of Asia we’ve studied, 12 are republics (including 2 federal republic, India and Pakistan), at least in name, although corruption and dominant parties are far from unknown. 

*Seven countries in this part of Asia are constitutional monarchies; in some, such as Japan, the monarch is only a figurehead, while in others, such as Nepal and Brunei, he is very powerful.  Malaysia is interesting in having a federal elective monarchy, in which the sultans of nine Malay states within the federation of Malaysia elect a ‘paramount ruler’ from among their number to serve for five years.  Thailand, Cambodia, and Bhutan also have constitutional monarchies.

*Myanmar is currently under a military dictatorship, and has been since 1962.  Although elections were held in 1990, the military junta ruling the country voided them, which is only one of many examples of human rights violations in Myanmar in the past 40 years.

*There are currently four communist states in this part of Asia, although there were once more (Cambodia and Mongolia were communist at one point).  The People’s Republic of China, North Korea, Vietnam, and Laos are all communist countries, although they implement communism in different ways today.  Although all these countries characterise themselves as republics, most are one-party states that only allow the local form of the communist party to run in elections (if elections are held at all) or to hold office.  North Korea does permit some other parties to exist, but they are small and do not oppose the communist party line—and, in any event, Kim Jong Il is so entrenched as the dictator of North Korea that party politics are fairly unimportant.  China does also allow some competition in local elections, but none on a national scale.

*North and South Korea still view themselves as temporary states that will one day re-unify.  The People’s Republic of China and the Republic of China each view themselves as the only legitimate government of all of China, and most countries only officially recognise one China or the other—officially the UN and the USA only recognise communist China, although the USA has repeatedly promised to defend Taiwan if China tries to take it by force.

*All of Asia put together produces about $8 trillion worth of goods and services a year, less than either the United States or the European Union.  However, when adjusted for purchasing power parity, this is worth over $18 trillion locally.  Still, the average GDP/capita is only $2,195 ($4,518 adjusted) per year.

*The most productive country in Asia is Japan (#2 worldwide, $4.6 trillion/year).  China is second (#7 worldwide, $1.7 trillion/year), India is third (#10; $691.8 billion), South Korea is fourth (#11; 679.8 billion), Russia is fifth (#15; $582 billion), Indonesia is sixth (#22; $257 billion), and Saudi Arabia is seventh ($250 billion).

*In terms of per capita GDP, the wealthiest country in Asia is the Middle Eastern country of Qatar, where the average person makes $37,610 per annum (#9 worldwide).  Next is Japan (#11; 36,595), then Singapore (#22; $24,740), 4th is the UAE (#23; $23,968), and 5th is Kuwait (#25; $19,559).  South Korea is 34th worldwide ($14,151), Taiwan is 36th worldwide ($13,451), and the People’s Republic of China is 110th of 180 tracked by the International Monetary Fund ($1,272 per year).

*Some of these figures can be misleading, however, particularly GPD stated in dollar values, because of the differences in local purchasing power.  If purchasing power parity is considered, the USA remains the wealthiest nation in the world, with about $11.6 trillion in purchasing power, but China is second ($7.3 trillion), Japan is third ($3.8 trillion), and India is fourth ($3.3 trillion).  Germany, the UK, France, Italy, Brazil, and Russia round out the top ten.

*Asia’s economies are growing quickly, however, and have been since the 1960s, or at least some have.  During that period, Japan and the East Asian Tigers, or Four Little Dragons, Hong Kong (which was then independent from China), Singapore, South Korea, and Taiwan saw tremendous growth in their economic power and their importance in the world.

*In the 1960s, most Asian countries were about as well off as most African countries.  The Asian countries had a few big advantages however:  they had relatively well-educated workforces, large workforces (which would work cheaply), and access to good transportation routes (by sea and major rivers). 

*Asia’s Tigers focused on improving their nations’ education systems and on producing exports for the world market.  They also protected local property rights and human rights while doing so.  This export-oriented industrialisation drew the Tigers into the world economy (although not perfectly, because the Tigers had high tariffs to discourage imports), developed their manufacturing sectors, and created well-educated societies. 

*About 1997 (and earlier, in the case of Japan), this model of EOI failed, or at least hit some very rough spots, as economic problems in other parts of the world caused demand for their exports to drop (and reduced investment in the Tigers).  Without anyone to buy their products, their economies stalled.  Like most Asian countries, they also had traditions of saving rather than spending money, so local demand for their own products was not enough to keep their economies strong.

*The Tigers have also suffered from the emergence of Red China and India as major industrial nations that can now provide cheaper educated workers than can the Tigers, which have grown wealthy enough that their people will not work for low enough wages to remain competitive.

*Today China and India are following EOI strategies, and India in particular is also taking advantage of its large population on English speakers to provide services to the western world, in such places as call centres and telephone help desks.  India has grown and is growing quickly, but China has done so even more.

*After the death of Chairman Mao in 1976, the Communist Party of China began quietly reforming their country, and bringing it more into line with the rest of the world—indeed, during this period, China and the USA began to normalise relations, especially after 1979, when the USA recognised Red China as a sovereign state (partly to counterbalance the USSR, which had a different brand of Communism, and now hated Red China).

*In the late 1970s and 1980s, China opened trade with the outside world, and allowed their own farmers to begin selling crops on the open market.  In the late 1980s and 1990s, the government began to step back from industry and allow companies to run themselves (much like western capitalist countries).  Recently, China has begun reforming its banking system, closing failing businesses, and trying to equalise income between the rich and the poor in the country.  Since these reforms began in 1978, China’s economy has quadrupled.

*The USA has typically been very supportive of China’s efforts, partly out of the hope that relaxation of government control in some areas will lead to relaxation elsewhere, and thus more democracy and human rights—indeed, it is hoped that a growing middle class will demand more rights (as has happened in so many other places).  Perhaps even more important, China (like India) is an emerging economy, and with 1.3 billion Chinese people, we want them to buy things from the United States.

*Recently (circa 1995), Vietnam has begun economic reform too.

*Asia has a wide range of economies, from the saturated economies of Japan and South Korea through the emerging economies of India and China to the extremely poor such as Mongolia or East Timor (which, when adjusted for PPP may have the lowest GDP/capita in the world:  $400/year).

*Agriculture remains a major part of Asia’s economy, particularly the growing of rice, although wheat and chicken are also important.  Fishing is also important, especially in Japan.  Rare woods and spices are also still important in Asia’s economies.

*Extractive industries are also important in Asia, particularly mining in Russia and drilling in the Middle East, but there are also oil reserves in and around Indonesia, Malaysia, and Brunei. 

*Manufacturing is growing in Asia, and has traditionally been strongest in Japan and the Four Tigers, although India, China, and other countries are beginning to catch up, particularly in Southeast Asia, where textile and shoe manufacturing are significant.

*Service industries are growing more important in Asia, particularly in China and India, and they have long been important in Japan and Singapore (and all the other Tigers). 

This page last updated 27 November, 2005.