TNAG-1880-FCO40-2671-Student-demonstrations-and-internal-political-situation-in-C-1989 — Page 42

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array of defensive policies against the NICs' market penetration. Thus, the four Asian NIEs are seen increasingly as normal competitors within a broad array of competitive pressures rather than as a competitive threat.

2. Differences and common characteristics within the NIES

group.

Within the Asian NIE's group there are a number of substantial

differences in political orientations, economic resources, trade regimes.

Moreovere, a stylized characterization of the NIEs as "models"

of market-oriented developing economies brushes over major

differences of their governments' activist stance in strategic development planning. Such a view neglects as well important

differences between them, like different degrees of state

intervention, in particular in infant industries protection,

or the quite different approaches to external financing and

debt (Korea borrowed extensively during 1980-85, whereas

Taiwan remained largely debt free).

From their basic economic orientation however the four Asian

NIES share a number of common characteristics, probably the

key to their success, that justify a common strategy towards

all four of them:

Their export-oriented development strategy with growing export shares in GNP contrasts with inward-looking, im- port substitution strategies of most other developing countries, in particular in Latin America.

In contrast with other industrializing countries the manufacturing sector assumed more than 85% of total exports.

Despite heavy strategic state planning and infant indu- stry protection, distortions in their pricing system remain fairly limited, allowing for an efficient alloca- tion of scarce economic resources.

High savings and investment ratios in the range of bet- ween 25-30% of GNP.