Unit Twenty-six

　　The Success of Eastern Asias Economics

　　Outsiders have contemplated the success of eastern Asias economies with admiration, wonderment and sometimes hostility. Scholars long sought to pinpoint the secrets behind the achievements of Japan, South Korea, Taiwan, Hong Kong and Singapore. More recently, they have turned their attention to the emerging tigers of Thailand, Malaysia and Indonesia. Hard work and entrepreneurial flair were obvious elements.

　　If a country is rich in a certain natural or human resource, its government should make sure nothing gets in the way of entrepreneurs who want to develop it,be they local or foreign. By allowing the latter a piece of the action, a nation benefits from the multiplying effects of investment, technology transfers and increased employment. And all the better if heavy tariffs or other forms of preferential treatment could be avoided.

　　In most cases, governments main job should be to get out of the way of business. Heavy-handed intervention in industrial policy generally does not work.It tends to create inefficiencies and artificial barriers to wealth. Governments should concentrate instead on liberalizing their own trade laws and pushing the same cause internationally. Freeing commerce allows natural, human and capital resources to flow into endeavors where they are mot efficient. Governments should keep interest rates and taxes as low as possible and make sure the national bureaucracy is capable and relatively clean.

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