Question

Looking at the East Asian economic development models,

(1) what is there challenges to overcome?

(2) Policy recommendation that EA countries can be more economically developed

Answer 1

East Asian Development Model
East Asia’s economic changes and adaptation even though made a remarkable growth in the economic activities, there are certain areas that the model should focuses to face the emerging external and internal challenges. The economy faces some challenges of conflict between government mechanization and market liberalization, the inability to restructure the financial system, closed and non transparent corporate sector and export led strategy of development. Even though the intervention of the government was effective enough to help the economy the models call to rectify the problems faced by the necessary governmental interventions. The models tried to encourage the domestic markets and thus stimulating the ability to export cheaply. This faced the problems of less returns to the inputs for production. The lack of competitiveness pulled the economies back from international efficiency.
Some recommendations are suggested to improve the quality of the economies. Along with the regulatory environments which strengthen the economy, suggestions including the need of service sector reforms, expanding or deepening trade agreements, larger policies for innovations, expanding the ability o finance to small and medium industries. The priorities also call for developing the skills of human capital which could help in production than the unskilled human capital. The need of shift of workers to different sectors according to their ability and programs should be adopted to make them much efficient. The transparency of the system should be increased and thus participating the public more effectively with greater government accountability. The reforms should be adopted for increased trade activities in foreign market than can help the economy to perform better.