What is a Tiger Economy?

A tiger economy is a term used to describe several booming economies, particularly in Southeast Asia. The Asian tiger economies typically include Singapore, Hong Kong, South Korea, and Taiwan.

The Asian tigers are high-growth economies that have transitioned from predominately agrarian societies of the 1960s to industrialized nations. The economic growth in each of the countries is usually export-led but with sophisticated financial and trading markets. Singapore and Hong Kong, for example, are home to two of the major financial markets in the world. Sometimes China is mentioned as an Asian tiger but has separated itself from the pack to become one of the largest economies of the world.

In addition to the Asian tigers, the "Asian cub" economies are a second group that experienced rapid growth over the last several years. The Asian cubs include Indonesia, Malaysia, Thailand, Vietnam, and the Philippines.

With the injection of large amounts of foreign investment, the Asian tiger economies grew substantially between the late 1980s and early- to mid-1990s. The nations experienced a financial crisis in 1997 and 1998, which, in part, stemmed from huge debt-servicing expenses and inequitable distribution of wealth. The majority of these nations’ wealth remained in the control of an elite few.

Since the late 1990s, the tiger economies have recovered relatively well and are major exporters of goods such as technology and electronics. The influence of the Asian tiger economies is likely to increase in the years to come.

Many of the Asian tigers are considered to be emerging economies. These are economies that generally do not have the level of market efficiency and strict standards in accounting and securities regulation as many advanced economies (such as the United States, Europe, and Japan). However, emerging markets do typically have a strong financial infrastructure, including banks, a stock exchange, and a unified currency.

For example, the Asian tiger economies have import restrictions to help promote the development of local industries and boost export-led GDP growth. Gross domestic product (GDP) is a measure of all the goods and services produced in an economy. However, Singapore and Hong Kong have begun to normalize trade by allowing an increase in the free trade of goods and services.

The Asian tigers share many characteristics, including an emphasis on exports, an educated population, and a growing standard of living.

Although it's a special administrative region (SAR) in China, Hong Kong has relative autonomy and has emerged as a major financial hub in the region. The Hong Kong Stock Exchange is consistently ranked among the top ten largest stock markets in the world.

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