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Newly Industrialising Countries

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Newly Industrialising Countries

  1. 1. Newly Industrialising Countries (NIC’s) <ul><li>In the 20th century many countries in east and south east Asia industrialised – including South Korea, Taiwan, Singapore, Japan, Philippines and Thailand. </li></ul><ul><li>The governments of these NICs kept close control over industrial development, and encouraged industries to export manufactured products to the more developed and richer countries abroad. </li></ul>
  2. 2. Newly Industrialising Countries (NIC’s) <ul><li>The profits generated by exports were re-invested in the domestic economy. Domestic businesses grew, wages rose, and workers spent their new wealth on home-produced goods and services - thus stimulating further growth. </li></ul><ul><li>This is called the multiplier effect. </li></ul><ul><li>NICs (Newly industrialised countries) tend to have a large proportion of people working in secondary industries. The % of the population working in primary industry starts to decline. </li></ul>
  3. 3. Newly Industrialising Countries (NIC’s) <ul><li>The success of NIC economies has contributed to the decline, over the last 30 years, of manufacturing industries in MEDCs such as the UK. </li></ul><ul><li>Industries struggled to compete with the cheaper competition from NICs, where production costs and wages were less. </li></ul>
  4. 4. NIC Case study; South Korea <ul><li>South Korea is known as a NEWLY INDUSTRIALISING COUNTRY (NIC) or a tiger economy. </li></ul>
  5. 6. How did South Korea develop so quickly ? <ul><li>This is because it has developed really quickly eg over last 30 years, South Korea has transformed from an agricultural country to an industrial one. </li></ul><ul><li>The economy has sustained an average growth of 7% a year over the last 30 years. </li></ul><ul><li>ECONOMIC MIRACLE. </li></ul>50 28 Tertiary (%) 30 6 Secondary (%) 20 66 Primary (%) 1995 1950
  6. 7. How did South Korea develop so quickly ? <ul><li>History </li></ul><ul><li>Korea was the scene of a bitter war during the 1950s which resulted in the creation of 2 countries : communist North Korea and capitalist South Korea . </li></ul>
  7. 8. How did South Korea develop so quickly ? <ul><li>South Korea has been helped by </li></ul><ul><li>Aid from the US and Japan (bilateral) </li></ul><ul><li>Loans and grants from development banks (multilateral aid). </li></ul><ul><li>Investment by multinationals . </li></ul>
  8. 9. How did South Korea develop so quickly ? <ul><li>The main reason why is the Korean Chaebol – large family run companies with political connections, e,g, Hyundai. </li></ul><ul><li>The Government developed a Five Year Plan which began in 1965 and has been continued ever since. </li></ul><ul><li>The first Five Year Plan encouraged the growth of heavy manufacturing and chemical industries initially. </li></ul>
  9. 10. How did South Korea develop so quickly ? (2) <ul><li>The first industries developed in South Korea were Import Substitution Industries (ISIs). Iron, steel and chemicals were produced to reduce spending on imports. </li></ul><ul><li>South Korea had skilled, cheap labour and an excellent location. </li></ul>Reduce spending on imports Set up Factories and Make own Products.
  10. 11. How did South Korea develop so quickly ? <ul><li>S Korea now has Export Orientated industries (EOIs) to try and make more export earnings. </li></ul><ul><li>The main success has been in the electronics industries eg Lucky Goldstar (LG). </li></ul><ul><li>Do you remember how many Korean companies moved to Wales ? </li></ul>
  11. 12. How did South Korea develop so quickly ? <ul><li>This is an important case study to know. It shows how a country has developed using different types of aid / investment. </li></ul><ul><li>Remember the keywords and facts !! </li></ul>