ABSTRACT
Over the past five decades, economies in Asia,1 particularly those in East Asia, have undergone a transformation that has been more rapid and extensive than in any other region in the world. By 1970, only Japan and the four Asian NIEs (newly industrialized economies) had decisively and successfully adopted outward-looking development strategies. These five countries, led by Japan, graduated quickly out of the earlier specialization in labour-intensive manufactures, opening up new export opportunities for latecomers to marketoriented policy reforms. By 1980, the three Southeast Asian economies – Indonesia, Malaysia and Thailand – had begun to embark on this path, with Malaysia a clear leader. Following the decisive policy shift from ‘plan to market’ in the late 1970s, China has been emerging as the fastest growing economy in the world and a major hub for international production networks. Until recently, changes were occurring more slowly in South Asia, with the notable exception of far-reaching liberalization reforms in Sri Lanka in the late 1970s. India began to liberalize in the mid-1980s and the reform process accelerated following the macroeconomic crisis in 1991. From about the early 1990s the three economies of Indochina – Vietnam, Laos and Cambodia – began to open up their economies. By the turn of the twentieth century all major countries in the region, besides Myanmar and North Korea, had become more open to foreign trade and investment, albeit from very different starting points and at different rates.
