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FLYING GEESE DEVELOPMENT MODEL
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FLYING GEESE DEVELOPMENT MODEL

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  1. FLYING GEESE DEVELOPMENT MODEL Dr. Kristiina Korhonen Center for Markets in Transition of the Helsinki School of Economics

  2. Average annual growth in selected Asian countries, 1974-2003

  3. The flying geese development model • explains how East and Southeast Asian economies initiated their industrialisation strategies in tandem • focus on foreign trade, foreign direct investment, and technology transfer • economic development through stages

  4. The flying geese development model states that Japan has led the economic growth in East Asia (Tokyo, Japan)

  5. The flying geese development model • explains how East and Southeast Asian economies initiated their industrialisation strategies in tandem • focus on foreign trade, foreign direct investment, and technology transfer • economic development through stages

  6. Development stages • a traditional country starts as an exporter of primary products and an importer of simple manufactured goods, • it becomes an exporter of the simple manufactured goods, • it starts to import more sophisticated industrial products, and • finally, it starts to export the advanced products

  7. Along with the ”flying geese” development, a country develops from agriculture to industrialisation (Gumi, South Korea)

  8. Development process • as the leading country progresses to higher niches in the international market system, the following countries take its place, leapfrogging each other along the way as each moves up the chain • boomerang effect; eg. if Japan exports capital, technology, and advanced equipment to Newly Industrialised Economies, it eventually makes new competitors for itself • the V-formation of flying geese should gradually become a straight-line pattern as late starters catch up with early starters

  9. The East Asian NIEs followed in Japan’s lead (construction site in Singapore)

  10. Development process • as the leading country progresses to higher niches in the international market system, the following countries take its place, leapfrogging each other along the way as each moves up the chain • boomerang effect; eg. if Japan exports capital, technology, and advanced equipment to Newly Industrialised Economies, it eventually makes new competitors for itself • the V-formation of flying geese should gradually become a straight-line pattern as late starters catch up with early starters

  11. Hierarchy of economic development • Exemplary Model: Japan • First tier NIEs: South Korea, Taiwan, Hong Kong, Singapore • Second tier NIEs: Thailand, Malaysia, the Philippines, Indonesia? • Third tier NIEs: China, Vietnam, Laos? • Fourth tier NIEs: North Korea?, Myanmar? 

  12. Vietnam is one of the third tier NIEs (Hanoi, Vietnam)

  13. GDP per capita in 1995 and 2005 in selected Asian economies Source: Statistics Finland

  14. Criticism against the model • Japanese view to the economic development of Pacific Asia • attempt to justify Japan’s economic presence in the region • Japan is not reluctant to transfer its high technology to other nations • in the Southeast Asian countries, the economic development has differed from that of East Asia