CENA, ANGELA MARIE

ACT 234
SUMMARY OF CHAPTER 1
ECONOMIC DEVELOPMENT IN ASIA

In this chapter, we have discussed the economic development in Asia. It is the spectacular
growth of many economies in Asia in the past few years. The development of the economy in
Asia is rapidly moving from the periphery to the center of the global economic system. It began
in Japan where it began to improve the economy by trading and investments. This method or
strategy quickly spread across the neighboring countries. Japan's and NIEs' successful
strategies inspired the other countries to improve their economies. Indonesia, Malaysia,
Thailand, and the Philippines led to rapid growth in the 1980s, while China's open-door policy in
the late 1970s accelerated development. The Asian financial crisis in 1977, triggered by the
collapse of the Thai baht, severely impacted Southeast Asian economies, leading to a recession
and prompting a reevaluation of corporate governance and exchange rate management
policies. The region recovered from a severe economic slump in 1998, with industrial output and
GDP rising in South Korea and stock prices doubled in Thailand and Malaysia. However, the US
economy, the Iraq War, and the SARS epidemic worsened the situation. The financial crisis
slowed East Asia's economic growth due to erosion of human development advancements in
health, education, poverty, equality, and income distribution. Despite this, East Asia's economies
are recovering and will significantly impact the world economy, as examined in this course.

Economic development focuses on lowering their capital income economies, using

growth theory, macroeconomics, microeconomics, labor, industrial organization, international
trade, fiscal and monetary policies as analytical tools. It encompasses social and humanitarian
achievement, income distribution, and per-capita income. It is a comprehensive picture of
population growth, living standards, and evolution, analyzed through GDP and GNP growth
rates. Economic expansion can occur without affecting citizens' living standards, but Asian
nations' human development measures, such as life expectancy and education, need expansion
to account for additional economic development indicators. Economic growth, often
accompanied by improved living standards, is a significant contributor to economic
development, as evidenced by comparisons of GDP, GNP, and exchange rates. There are other
measurements used in the growth and development of Asian economies. The Human
Development Index (HDI) measures health, infant mortality rate, and educational attainment,
indicating the expected years of full health, with years of ill-health weighted according to
severity. The Green system of national accounting addresses GDP and GNP shortcomings by
adjusting income measures to consider natural resource depletion and environmental
degradation, including global warming and ozone layer depletion, which are hard to estimate.
Two methods for comparing incomes between countries are the purchasing power parity (PPP)
method and the exchange rate method. The PPP method creates a cost index for similar goods
in local currency, while the exchange rate method converts the currency into U.S. dollars,
valuing GDP and GDP per capita accordingly.

This lesson leads us to have knowledge about the economic development of Asia and how
they improve from time to time. The uniqueness and complexity of their economic development
is also a key factor that helps to develop the economic growth of each countries