Economic Development in Asia

Module 1 – Overview of Economic Development

 Introduction
• Greater emphasis was given in this area of economic
development during the postwar era and it continued in
the new millennium.
• The “economic miracle” that spanned for several
decades followed by a severe financial and economic
crisis. Poverty and economic inequality remained even
with better
• East Asian miracle, a showcase of development up until
the Asian crisis.
• Asian crisis created a number of questions about the
continued viability of a rapid growth profile for the region.
• Economies have begun to rebound.
Economic Development in Asia
• Social impact of the crisis has been substantial.

• Future development will depend upon many factors,

including public policy and developments in industrial
countries.

• This course looks at both the history and the future

outlook for the region.
 Difference between development
economics and other branches of
economics

• In economic development, we used the analytical tools

and methods developed in other branches of economics
such as growth theory, macroeconomics,
microeconomics, labor economics, fiscal and monetary
policies just to name a few.

• These tools of analysis are applied to problems and

challenges of developing countries.
Measuring Growth & Development
• For some times, economic development was
considered to be synonymous with economic growth.
• However, these two concepts namely economic
growth and economic development are not necessary
the same. The concept of of economic development is
broader and much more encompassing than economic
growth.
• Use of GDP and GNI and exchange rate comparisons
lead to patterns of growth over time.
• Other methods such as purchasing power parity can
also be used to compare standards of living.
Measuring Growth & Development
• For some times, economic development was
considered to be synonymous with economic growth.
• However, these two concepts namely economic
growth and economic development are not necessary
the same. The concept of of economic development is
broader and much more encompassing than economic
growth.
• Use of GDP and GNI and exchange rate comparisons
lead to patterns of growth over time.
• Other methods such as purchasing power parity can
also be used to compare standards of living.
 Other Measures
• Human development index (HDI)
• Healthy life expectancy
• Green GNP
 Other Measures
Human development index (HDI):
 Other Measures
According to the United Nations, Human development
index (HDI) is defined in the following manner:
 Other Measures
According to the United Nations, Human development
index (HDI) is defined in the following manner:
 Other Measures
According to World Health Organization (WHO) Healthy life
Expectancy is defined by the following:
• It summarizes the expected number of years to be lived
in full health. The years of ill – health are weighted
according severity and subtracted from the overall life
expectancy rate to give the equivalent years of healthy
life.
Other Measures
 Other Measures
GREEN GDP:
• One of the more recent approaches developed to
address the inherent short comings of GDP and GNI as
growth and development measures is based on what is
known as ”green” system of national accounting.
• It includes renewable and non – renewable natural
resources, and environmental degradation.
• Other suggests to impose “defensive” expenditures for
the environmental protection and compensation for
environmental damage should be deducted.
 Making Comparison Between
Countries
1. Exchange Rate Method:
• The Philippine peso is compared with a foreign currency.
The value of the GDP and GNI per capita would then be
valued accordingly.
2. Purchasing Power parity (PPP) Method:
• PPP is defined as the number of units of the country’s
currency required to buy the same amount of products
that a American dollar would buy in the U.S.
 Summary

• Uniqueness of the Asian development progress (Asian

Miracle Economies).

• Indicators of economic growth and development.