Economic Development in Asia

Chapter 2 – Introduction and Overview

Economic Development in Asia
• 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

• It looks at all of the other branches of economics within

the context of economic development.

• It uses the tools developed in other branches of

economics to analyze the problems and challenges of
economic development.
Measuring Growth & Development

• Use of GDP and GNP 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
• - assesses the impact of environmental
• degradation in the development
• experience.
 Human Development Index
(HDI)
The United Nations Development Program (UNDP)
developed the HDI in the late 1980s and has been
publishing it since 1990. This index has three
components: per-capita income and two additional
measures-life expectancy at birth, and level of
educational attainment that combines adult literacy and
educational enrolment rates. These are added to per-
capita income, which is adjusted to reflect the
diminishing marginal use of money to obtain HDI.
HEALTHY LIFE EXPENTANCY
Number of Years
Male Female
Japan 72 78
Singapore 69 71
Kuwait 67 67
Korea 65 71
China 63 65
Malaysia 62 65
Vietnam 60 63
Thailand 58 62
Indonesia 57 59
Philippines 57 62
 GREEN GNP
• One of the more recent approaches developed to
address the inherent shortcomings of GDP and GNP as
growth and development measures is based on what is
known as the “green” system of national accounting.
Green GNP is the informal name given to national
income measures that are adjusted to take into account
the depletion of natural resources (both renewable and
non-renewable) and environmental degradation.
 EXCHANGE RATE METHOD
• The exchange rate method between the local currency
and the U.S. dollar to convert the currency into its U.S.
dollar equivalent. A country’s GDP and GDP per capital
would then be valued accordingly, in U.S. dollars.
 PPP METHOD
• The purchasing power parity method develops a cost
index for comparable baskets of consumption goods in
the local currency and then compares this with prices in
the United States for the same set of commodities. A
country’s PPP is defined as the number of units of the
country’s currency required to buy the same amount of
goods and services that a dollar would buy in the United
States.
 Summary

• Uniqueness of the Asian development progress (Asian

Miracle Economies).

• Indicators of economic growth and development.

• Enumerate and Explain the Different
factors, government policy or program in
order to improve the economy of the
Philippines?