Application: High Performing Asian Economies

Per capita Growth Differences

Time Period 1966-90

High performance Asian economies (HPAE) refers to: Singapore, Hong Kong, Thailand, Indonesia, Taiwan, Malaysia, Korea.

Economic Growth

Average Growth of GNP per Capita, 1965-90

0 1 2 3 4 5 6

HPAEs

South Asia

Middle East and Mediterranean

Sub-Saharan Africa

OECD Economies

Latin America and the Caribbean

GNP per capita growth rate (percent)

OECD refers to Organization of Economic Cooperation and Development. This includes the world’s 24 richest economies.

High performance Asian economies (HPAE) are: Singapore, Hong Kong, Thailand, Indonesia, Taiwan, Malaysia, Korea.

Education in HPAEHong Kong Singapore South Korea Taiwan

1966 1991 1966 1990 1966 1990 1966 1990

None 19.2 5.6 55.1 - 31.1 6.4 17.0 4.5

Primary 53.6 22.9 28.2 33.7 42.2 18.5 57.2 28.0

Secondary 27.2 71.4 15.8 66.3 26.5 75.0 25.8 67.6

Educational Attainment of the Working Population (Percent)

Education is the engine of TFP growth

Primary is till eighth grade and secondary is high school

Source: Alwyn Young, ‘The Tyrrany of Numbers: Confronting the Statistical Realities of the East Asian Growth Experience’, Quarterly Journal of Economics, 1995

Expenditures on Education

0 50 100

Hong Kong

Indonesia

Korea

Malaysia

Singapore

Thailand

Venezuela

Percentage of educationbudget allocated to basiceducation

Percentage of educationbudget allocated to highereducation

Public expenditure oneducation as a percentage ofGDP

The HPAE’s focused on primary education, whereas other focused on higher education. Source: World Bank

Income Inequality Fell

High Investment

Current Account in HPAE

Current Account as % of GDP

-11

-6

-1

4

9

14

Ind

on

esia

Ko

rea

Mal

aysi

a

Sin

gap

ore

Th

aila

nd

1975

1985

1994

Key Message

Education,Openness,

Property RightsProtection

TFP growth

Investment boom,Real GDP growth

and Rise in per-capita Income

Greater wealthis created