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An egalitarian income distribution and thorough agricul- tural reforms in Korea and Taiwan allowing for a growth process with few frictions so far.
A high capacity to absorb and incorporate foreign techno- logies into their domestic production process in "orga- nic" stages.
Still, the most important common feature may also be a divi-
ding one: their stiff competition with each other in the world markets and in the policy arena. As everywhere else, economic
planning hasn't been free of errors; but under pressure from
the world market, action came quickly to correct them. Thus,
the ability of these economies to adjust with great
flexibility to changing conditions and to accept the competition is one of their main assets.
II. Analysis of the NIES' Impact on the International Community.
1. Demonstration effects
Success is contagious and a source of imitation. Despite a
sluggish world economy and their high exposure to external
economic shocks in the 1970 and 80s the NIE's have more than
quintupled their share in world exports during the 23 years
between 1965-88 (from 1.3% to 8%). Their successes spill over into the wider region:
A stylized model of the NIES' success served economic po- licy makers in the World Bank, the developing and develo- ped countries as an argument for advantages of market- led, export-oriented development strategies.
Japan is in a process of redirecting its role in the region, opening up its domestic market, and Japanese direct investments in the region - in the past mainly di- rected towards (vertical) sourcing of primary goods will become complemented by a (horizontal) intra-sectoral division of labor, allowing for a more balanced partner- ship and interdependence in the region.
ASEAN members view the NIES' development success closer to their own possibilities than that of Japan. This, in conjunction with a diminishing "Western" orientation, ma- kes up for what they view as a new, genuinely "Eastern" orientation.
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