Newly Industrialised Countries

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Newly industrialised countries FIRST PHASE A key element in the process of globalization has been the emergence of newly industrialised countries – countries that have undergone rapid industrialization sonce the early 1960s. When the TNCs looked for areas where labour and other costs were lower, the countries of east Asia were targeted. Japanese companies did this first so they located in countries geographically near by, their less developed neighbours, particularly South Korea and Taiwan. The four Asian Tigers: 1. South Korea 2. Taiwan 3. Hong Kong 4. Singapore The advanatages of these countries for the development of the manufacturing industry were: * a reasonably well developed level of infrastructure such as roads, railways and ports * relatively well educated populations with existing skills * cultural traditions that revere education and achievement * good geographical location – Singapore, for example, is situated between the indian and pacific oceans. * Government support, for example offering low interest rates on banks loans * Less rigid laws an regulations on labour, taxation and pollution trhat in TNC’s parents countries, allowing more profitable operations As the economies of NICs grew, large indigenous firms began to grow, helped by the economic climate and government aid. The chaebols (he business conglomerates) fo South Korea, helped by the government, were able to expand. SECOND PHASE NIC economies grew, wage levels and costs of operating in NICs began to increase. Resulting in Japanese, US and European TNCs looking for a second generation of countries that could support their operations. E.g. areas that had had recent improvements in terms of both human and physical infrastructure but still had low wage levels. Simultaneously, the chaebols of south korea began moving routine
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