Eastern and Western States’ Role in Their National Economies

Subject: Economics
Pages: 2
Words: 356
Reading time:
2 min

Both East Asia and West countries have passed their unique path of economic and cultural development. The main difference between these two rivals and partners simultaneously is their characteristic views on the ways of achieving economic prosperity and well-being. While the Asian governments rely on active and direct participation in states’ economic processes, the West policymakers consider that the central role of any country is to be an impartial referee in its national economy. Therefore, this discussion aims at arguing that the Asian model of economic development is more relevant and effective than the West Neoclassical approach.

From the middle of the 20th century, many Asian states have demonstrated a tremendous leap in all aspects of national development, transforming from small economies into world giants. According to Nayyar, by 2016, the Asian economy amounted to around 40 percent of world manufacturing, 30 percent of world income, and over one-third of world trade, whereas its income per capita almost reached the world average. Currently, Asian countries possess over 40 percent of the global gross domestic product (GDP). In particular, according to Textor, China’s share of the global GDP based on Purchasing Power Parity (PPP) comprises 19,25 in 2019, while in the USA, this figure accounts for 15,11. Such achievements reflected people’s well-being and resulted in significant poverty reduction across Asia. For instance, in 1984, the proportion of Chinese citizens who lived under $3,20 a day accounted for 96 percent of the total population, while, in 2012, this part dropped to 20 percent. These outcomes have been obtained due to the government’s direct participation in economic activities.

In this regard, in the Asian half-century economic reorganization, governments played a crucial role, serving as a supporter, a leader, and a catalyst. Accomplishments in the development of Asia were due to managing evolving relationships between domestic and international markets and states by focusing on the appropriate balance in their related functions. The developmental countries, including Taiwan, South Korea, and Singapore, developed strategies in all sectors to pursue national development goals, applying carrot-and-stick policy to become industrialized nations in 50 years.