Newly industrialized countries
Encyclopedia
The category of newly industrialized country (NIC) is a socioeconomic classification
applied to several countries around the world by political scientists and economist
s.
NICs are countries whose economies have not yet reached First World
status but have, in a macroeconomic sense, outpaced their developing counterparts. Another characterization of NICs is that of nations undergoing rapid economic growth
(usually export
-oriented). Incipient or ongoing industrialization is an important indicator of a NIC. In many NICs, social upheaval can occur as primarily rural, or agricultural, populations migrate to the cities, where the growth of manufacturing concerns and factories can draw many thousands of laborers.
NICs usually share some other common features, including:
NICs often receive support from international organization
s such as the World Trade Organization
(WTO) and other internal support bodies. However, as environmental, labor and social standards tend to be significantly weaker in NICs, many fair trade
supporters have advocated standards for importing their products and criticized the outsourcing of jobs to NICs.
, Singapore
, South Korea
and Taiwan
rose to global prominence as NICs in the 1970s and 1980s, with exceptionally fast industrial growth since the 1960s; all four regions have since graduated into advanced economies and high-income economies. There is a clear distinction between these countries and the nations now considered to be NICs. In particular, the combination of an open political process, high GNI per capita and a thriving, export-oriented economic policy has shown that these countries have now not only reached but surpassed the ranks of many developed countries
.
All four economies are classified as High-income economies by the World Bank
and Advanced economies by the International Monetary Fund
(IMF) and U.S. Central Intelligence Agency
(CIA). All of them, like Western European countries, possess Human Development Index
considered as "very high" by the UN. South Korea
has an outstanding performance in such group. It is the only among the Asian Tigers that is an Organisation for Economic Co-operation and Development
(OECD) member. According to The Economist
s Democracy Index
, a non peer reviewed scale that measures the degree of democracy — as defined by the presence and fairness of elections in determining the country's regime, government transparency, civil liberties, and popular political participation — in different world countries, South Korea is, along with Japan
, the only "full democracy" in Asia
. Both were considered to be NICs during the 20th century, as Japan had enormous industrial growth after World War II
.
group is composed by G8 members plus China, India, Mexico, South Africa and Brazil.
Note: Green-colored cells indicate higher value or best performance in index, while yellow-colored cells indicate the opposite.
According to Goldman Sachs
review of emerging economies, by 2050 the largest economies in the world will be as follows: China
, USA, India
, Brazil
, and Mexico
.
For China and India, the immense population of these two nations (each with over 1.1 billion people as of January 2009) means that per capita income will remain low even if either economy surpasses that of the United States in overall GDP. When GDP per capita is calculated according to Purchasing Power Parity
(PPP), this takes into account the lower costs of living
in each newly industrialized country.
Brazil, China, India, Mexico and South Africa
meet annually with the G8
countries to discuss financial topics and climate change, due to their economic importance in today's global market and environmental impact, in a group known as G8+5
. This group is expected to be expanded to G14
by adding Egypt
alongside the five forementioned countries.
, Chile
, Egypt, Indonesia
and Russia
.
This comparative advantage is often criticized by advocates of the fair trade
movement.
is not always associated with political freedom in nations such as the People's Republic of China
, where Internet censorship
and human rights
violations are common. The case is diametrically opposite for India. While being a liberal democracy throughout its post-colonial history, India has been widely criticized for its inefficient government and widespread corruption. Thus, while in China where political freedoms remain tight, the average Chinese citizen enjoys a higher standard of living than his or her counterpart in India.
South Africa
faces an influx of immigrants from countries such as Zimbabwe
.
Groupings:
Categorization
Categorization is the process in which ideas and objects are recognized, differentiated and understood. Categorization implies that objects are grouped into categories, usually for some specific purpose. Ideally, a category illuminates a relationship between the subjects and objects of knowledge...
applied to several countries around the world by political scientists and economist
Economist
An economist is a professional in the social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy...
s.
NICs are countries whose economies have not yet reached First World
First World
The concept of the First World first originated during the Cold War, where it was used to describe countries that were aligned with the United States. These countries were democratic and capitalistic. After the fall of the Soviet Union and the end of the Cold War, the term "First World" took on a...
status but have, in a macroeconomic sense, outpaced their developing counterparts. Another characterization of NICs is that of nations undergoing rapid economic growth
Economic growth
In economics, economic growth is defined as the increasing capacity of the economy to satisfy the wants of goods and services of the members of society. Economic growth is enabled by increases in productivity, which lowers the inputs for a given amount of output. Lowered costs increase demand...
(usually export
Export
The term export is derived from the conceptual meaning as to ship the goods and services out of the port of a country. The seller of such goods and services is referred to as an "exporter" who is based in the country of export whereas the overseas based buyer is referred to as an "importer"...
-oriented). Incipient or ongoing industrialization is an important indicator of a NIC. In many NICs, social upheaval can occur as primarily rural, or agricultural, populations migrate to the cities, where the growth of manufacturing concerns and factories can draw many thousands of laborers.
NICs usually share some other common features, including:
- Increased social freedoms and civil rightsCivil rightsCivil and political rights are a class of rights that protect individuals' freedom from unwarranted infringement by governments and private organizations, and ensure one's ability to participate in the civil and political life of the state without discrimination or repression.Civil rights include...
. - Strong political leaders.
- A switch from agricultural to industrial economies, especially in the manufacturing sector.
- An increasingly open-market economy, allowing free tradeTradeTrade is the transfer of ownership of goods and services from one person or entity to another. Trade is sometimes loosely called commerce or financial transaction or barter. A network that allows trade is called a market. The original form of trade was barter, the direct exchange of goods and...
with other nations in the world. - Large national corporations operating in several continents.
- Strong capital investment from foreign countries.
- Political leadershipRegional powerIn international relations, a regional power is a state that has power within a geographic region. States which wield unrivaled power and influence within a region of the world possess regional hegemony.-Characteristics:...
in their area of influence. - Lowered poverty rates.
NICs often receive support from international organization
International organization
An intergovernmental organization, sometimes rendered as an international governmental organization and both abbreviated as IGO, is an organization composed primarily of sovereign states , or of other intergovernmental organizations...
s such as the World Trade Organization
World Trade Organization
The World Trade Organization is an organization that intends to supervise and liberalize international trade. The organization officially commenced on January 1, 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade , which commenced in 1948...
(WTO) and other internal support bodies. However, as environmental, labor and social standards tend to be significantly weaker in NICs, many fair trade
Fair trade
Fair trade is an organized social movement and market-based approach that aims to help producers in developing countries make better trading conditions and promote sustainability. The movement advocates the payment of a higher price to producers as well as higher social and environmental standards...
supporters have advocated standards for importing their products and criticized the outsourcing of jobs to NICs.
Historical context
The term began to be used circa 1970 when the Four Asian Tigers of Hong KongHong Kong
Hong Kong is one of two Special Administrative Regions of the People's Republic of China , the other being Macau. A city-state situated on China's south coast and enclosed by the Pearl River Delta and South China Sea, it is renowned for its expansive skyline and deep natural harbour...
, Singapore
Singapore
Singapore , officially the Republic of Singapore, is a Southeast Asian city-state off the southern tip of the Malay Peninsula, north of the equator. An island country made up of 63 islands, it is separated from Malaysia by the Straits of Johor to its north and from Indonesia's Riau Islands by the...
, South Korea
South Korea
The Republic of Korea , , is a sovereign state in East Asia, located on the southern portion of the Korean Peninsula. It is neighbored by the People's Republic of China to the west, Japan to the east, North Korea to the north, and the East China Sea and Republic of China to the south...
and Taiwan
Republic of China
The Republic of China , commonly known as Taiwan , is a unitary sovereign state located in East Asia. Originally based in mainland China, the Republic of China currently governs the island of Taiwan , which forms over 99% of its current territory, as well as Penghu, Kinmen, Matsu and other minor...
rose to global prominence as NICs in the 1970s and 1980s, with exceptionally fast industrial growth since the 1960s; all four regions have since graduated into advanced economies and high-income economies. There is a clear distinction between these countries and the nations now considered to be NICs. In particular, the combination of an open political process, high GNI per capita and a thriving, export-oriented economic policy has shown that these countries have now not only reached but surpassed the ranks of many developed countries
Developed country
A developed country is a country that has a high level of development according to some criteria. Which criteria, and which countries are classified as being developed, is a contentious issue...
.
All four economies are classified as High-income economies by the World Bank
World Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
and Advanced economies by the International Monetary Fund
International Monetary Fund
The International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...
(IMF) and U.S. Central Intelligence Agency
Central Intelligence Agency
The Central Intelligence Agency is a civilian intelligence agency of the United States government. It is an executive agency and reports directly to the Director of National Intelligence, responsible for providing national security intelligence assessment to senior United States policymakers...
(CIA). All of them, like Western European countries, possess Human Development Index
Human Development Index
The Human Development Index is a composite statistic used to rank countries by level of "human development" and separate "very high human development", "high human development", "medium human development", and "low human development" countries...
considered as "very high" by the UN. South Korea
South Korea
The Republic of Korea , , is a sovereign state in East Asia, located on the southern portion of the Korean Peninsula. It is neighbored by the People's Republic of China to the west, Japan to the east, North Korea to the north, and the East China Sea and Republic of China to the south...
has an outstanding performance in such group. It is the only among the Asian Tigers that is an Organisation for Economic Co-operation and Development
Organisation for Economic Co-operation and Development
The Organisation for Economic Co-operation and Development is an international economic organisation of 34 countries founded in 1961 to stimulate economic progress and world trade...
(OECD) member. According to The Economist
The Economist
The Economist is an English-language weekly news and international affairs publication owned by The Economist Newspaper Ltd. and edited in offices in the City of Westminster, London, England. Continuous publication began under founder James Wilson in September 1843...
s Democracy Index
Democracy Index
The Democracy Index is an index compiled by the Economist Intelligence Unit that claims to measure the state of democracy in 167 countries, of which 166 are sovereign states and 165 are UN member states...
, a non peer reviewed scale that measures the degree of democracy — as defined by the presence and fairness of elections in determining the country's regime, government transparency, civil liberties, and popular political participation — in different world countries, South Korea is, along with Japan
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
, the only "full democracy" in Asia
Asia
Asia is the world's largest and most populous continent, located primarily in the eastern and northern hemispheres. It covers 8.7% of the Earth's total surface area and with approximately 3.879 billion people, it hosts 60% of the world's current human population...
. Both were considered to be NICs during the 20th century, as Japan had enormous industrial growth after World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
.
Current NICs
The following table presents the list of countries consistently considered NICs by different authors and experts. Turkey, and South Africa are classified as developed countries by the CIA. Turkey was a founding member of the OECD in 1961 and Mexico joined in 1994. The G8+5G8+5
The G8+5 group of leaders consists of the heads of government from the G8 nations , plus the heads of government of the five leading emerging economies .-February 2007 Declaration:On February 16, 2007, The Global Legislators Organisation The G8+5 group of leaders consists of the heads of government...
group is composed by G8 members plus China, India, Mexico, South Africa and Brazil.
Note: Green-colored cells indicate higher value or best performance in index, while yellow-colored cells indicate the opposite.
| Region Geopolitics Geopolitics, from Greek Γη and Πολιτική in broad terms, is a theory that describes the relation between politics and territory whether on local or international scale.... |
Country Country A country is a region legally identified as a distinct entity in political geography. A country may be an independent sovereign state or one that is occupied by another state, as a non-sovereign or formerly sovereign political division, or a geographic region associated with a previously... |
GDP Gross domestic product Gross domestic product refers to the market value of all final goods and services produced within a country in a given period. GDP per capita is often considered an indicator of a country's standard of living.... (PPP) Purchasing power parity In economics, purchasing power parity is a condition between countries where an amount of money has the same purchasing power in different countries. The prices of the goods between the countries would only reflect the exchange rates... (Billions of USD, 2010 World Bank World Bank The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty... ) |
GDP per capita (PPP) (USD, 2010 World Bank World Bank The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty... ) |
Income equality (GINI) Gini coefficient The Gini coefficient is a measure of statistical dispersion developed by the Italian statistician and sociologist Corrado Gini and published in his 1912 paper "Variability and Mutability" .... 2006 |
Human Development Index Human Development Index The Human Development Index is a composite statistic used to rank countries by level of "human development" and separate "very high human development", "high human development", "medium human development", and "low human development" countries... (HDI, 2011) |
GDP (real) growth rate as of 2010 | GDP (real) growth rate per capita as of 2008 | Sources |
|---|---|---|---|---|---|---|---|---|
| Africa Africa Africa is the world's second largest and second most populous continent, after Asia. At about 30.2 million km² including adjacent islands, it covers 6% of the Earth's total surface area and 20.4% of the total land area... |
| South Africa |
524,198 | 10,492 | 57.8 | 0.619 (medium) | 2.78 | 1.29 | |
| North America North America North America is a continent wholly within the Northern Hemisphere and almost wholly within the Western Hemisphere. It is also considered a northern subcontinent of the Americas... |
 Mexico |
1,652,168 | 15,224 | 46.3 | 0.770 (high) | 5.52 | 0.75 | |
| South America South America South America is a continent situated in the Western Hemisphere, mostly in the Southern Hemisphere, with a relatively small portion in the Northern Hemisphere. The continent is also considered a subcontinent of the Americas. It is bordered on the west by the Pacific Ocean and on the north and east... |
 Brazil |
2,169,180 | 11,127 | 54 | 0.718 (high) | 7.49 | 4.06 | |
| Asia Asia Asia is the world's largest and most populous continent, located primarily in the eastern and northern hemispheres. It covers 8.7% of the Earth's total surface area and with approximately 3.879 billion people, it hosts 60% of the world's current human population... |
 Mainland China |
10,084,764 | 7,536 | 44.7 | 0.687 (medium) | 10.3 | 10.4 | |
 India |
4,198,609 | 3,586 | 32.5 | 0.547 (medium) | 11.1 | 8.5 | ||
 Malaysia |
414,395 | 14,845 | 49.2 | 0.761 (high) | 7.16 | 2.86 | ||
 Philippines |
367,425 | 3,925 | 44.5 | 0.644 (medium) | 7.6 | 1.97 | ||
 Thailand |
586,824 | 8,612 | 42 | 0.682 (medium) | 7.8 | 1.84 | ||
| Europe Europe Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting... |
 Turkey |
1,115,994 | 14,741 | 38 | 0.699 (high) | 8.2 | -0.34 | |
According to Goldman Sachs
Goldman Sachs
The Goldman Sachs Group, Inc. is an American multinational bulge bracket investment banking and securities firm that engages in global investment banking, securities, investment management, and other financial services primarily with institutional clients...
review of emerging economies, by 2050 the largest economies in the world will be as follows: China
People's Republic of China
China , officially the People's Republic of China , is the most populous country in the world, with over 1.3 billion citizens. Located in East Asia, the country covers approximately 9.6 million square kilometres...
, USA, India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
, Brazil
Brazil
Brazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people...
, and Mexico
Mexico
The United Mexican States , commonly known as Mexico , is a federal constitutional republic in North America. It is bordered on the north by the United States; on the south and west by the Pacific Ocean; on the southeast by Guatemala, Belize, and the Caribbean Sea; and on the east by the Gulf of...
.
For China and India, the immense population of these two nations (each with over 1.1 billion people as of January 2009) means that per capita income will remain low even if either economy surpasses that of the United States in overall GDP. When GDP per capita is calculated according to Purchasing Power Parity
Purchasing power parity
In economics, purchasing power parity is a condition between countries where an amount of money has the same purchasing power in different countries. The prices of the goods between the countries would only reflect the exchange rates...
(PPP), this takes into account the lower costs of living
Cost-of-living index
Cost of living is the cost of maintaining a certain standard of living. Changes in the cost of living over time are often operationalized in a cost of living index. Cost of living calculations are also used to compare the cost of maintaining a certain standard of living in different geographic areas...
in each newly industrialized country.
Brazil, China, India, Mexico and South Africa
South Africa
The Republic of South Africa is a country in southern Africa. Located at the southern tip of Africa, it is divided into nine provinces, with of coastline on the Atlantic and Indian oceans...
meet annually with the G8
G8
The Group of Eight is a forum, created by France in 1975, for the governments of seven major economies: Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States. In 1997, the group added Russia, thus becoming the G8...
countries to discuss financial topics and climate change, due to their economic importance in today's global market and environmental impact, in a group known as G8+5
G8+5
The G8+5 group of leaders consists of the heads of government from the G8 nations , plus the heads of government of the five leading emerging economies .-February 2007 Declaration:On February 16, 2007, The Global Legislators Organisation The G8+5 group of leaders consists of the heads of government...
. This group is expected to be expanded to G14
G14 (nations)
The G14 will be a proposed plan that will put 6 emerging economies in the G8+5 group. Egypt will be part of the G14. The plan was announced in 2008 when France and Italy wanted an expansion....
by adding Egypt
Egypt
Egypt , officially the Arab Republic of Egypt, Arabic: , is a country mainly in North Africa, with the Sinai Peninsula forming a land bridge in Southwest Asia. Egypt is thus a transcontinental country, and a major power in Africa, the Mediterranean Basin, the Middle East and the Muslim world...
alongside the five forementioned countries.
Other NICs
Each author set a list of countries accordingly to the methods or type of economic analysis. This sometimes results in a country being mentioned as NIC in a particular work, but that is rarely considered as such by the other authors. This is the case of nations such as ArgentinaArgentina
Argentina , officially the Argentine Republic , is the second largest country in South America by land area, after Brazil. It is constituted as a federation of 23 provinces and an autonomous city, Buenos Aires...
, Chile
Chile
Chile ,officially the Republic of Chile , is a country in South America occupying a long, narrow coastal strip between the Andes mountains to the east and the Pacific Ocean to the west. It borders Peru to the north, Bolivia to the northeast, Argentina to the east, and the Drake Passage in the far...
, Egypt, Indonesia
Indonesia
Indonesia , officially the Republic of Indonesia , is a country in Southeast Asia and Oceania. Indonesia is an archipelago comprising approximately 13,000 islands. It has 33 provinces with over 238 million people, and is the world's fourth most populous country. Indonesia is a republic, with an...
and Russia
Russia
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...
.
Brief economic analysis
NICs usually benefit from comparatively low labor costs, which translates into lower input prices for suppliers. As a result, it is often easier for producers in NICs to outperform and outproduce factories in developed countries, where the cost of living is higher, and labor unions and other organizations have more political sway.This comparative advantage is often criticized by advocates of the fair trade
Fair trade
Fair trade is an organized social movement and market-based approach that aims to help producers in developing countries make better trading conditions and promote sustainability. The movement advocates the payment of a higher price to producers as well as higher social and environmental standards...
movement.
Issues
Economic freedomEconomic freedom
Economic freedom is a term used in economic and policy debates. As with freedom generally, there are various definitions, but no universally accepted concept of economic freedom...
is not always associated with political freedom in nations such as the People's Republic of China
People's Republic of China
China , officially the People's Republic of China , is the most populous country in the world, with over 1.3 billion citizens. Located in East Asia, the country covers approximately 9.6 million square kilometres...
, where Internet censorship
Censorship in the People's Republic of China
Censorship in the People's Republic of China is implemented or mandated by the PRC's ruling party, the Communist Party of China . The special administrative regions of Hong Kong and Macau have their own legal systems and are largely self-governing, so these censorship policies do not apply...
and human rights
Human rights in the People's Republic of China
Human rights in the People's Republic of China are a matter of dispute between the Chinese government, other countries, international NGOs, and dissidents inside the country. Organizations such as the U.S. State Department, Amnesty International, and Human Rights Watch have accused the Chinese...
violations are common. The case is diametrically opposite for India. While being a liberal democracy throughout its post-colonial history, India has been widely criticized for its inefficient government and widespread corruption. Thus, while in China where political freedoms remain tight, the average Chinese citizen enjoys a higher standard of living than his or her counterpart in India.
South Africa
South Africa
The Republic of South Africa is a country in southern Africa. Located at the southern tip of Africa, it is divided into nine provinces, with of coastline on the Atlantic and Indian oceans...
faces an influx of immigrants from countries such as Zimbabwe
Zimbabwe
Zimbabwe is a landlocked country located in the southern part of the African continent, between the Zambezi and Limpopo rivers. It is bordered by South Africa to the south, Botswana to the southwest, Zambia and a tip of Namibia to the northwest and Mozambique to the east. Zimbabwe has three...
.
See also
- Emerging marketsEmerging marketsEmerging markets are nations with social or business activity in the process of rapid growth and industrialization. Based on data from 2006, there are around 28 emerging markets in the world . The economies of China and India are considered to be the largest...
- Science in newly industrialized countriesScience in newly industrialized countriesScientific research is concentrated in the developed world, with only a marginal contribution from the rest of the world. Most Nobel Laureates are either from United States or Europe or Japan. Many newly industrialized countries have been trying to establish scientific institutions, but with...
- Flying Geese ParadigmFlying Geese ParadigmThe Flying Geese Paradigm is a view of Japanese scholars upon the technological development in Southeast Asia viewing Japan as a leading power. It was developed in the 1930s, but gained wider popularity in the 1960s after its author Kaname Akamatsu published his ideas in the Journal of Developing...
Groupings:
- G8+5G8+5The G8+5 group of leaders consists of the heads of government from the G8 nations , plus the heads of government of the five leading emerging economies .-February 2007 Declaration:On February 16, 2007, The Global Legislators Organisation The G8+5 group of leaders consists of the heads of government...
- G20 industrial nationsG20 industrial nationsThe Group of Twenty Finance Ministers and Central Bank Governors is a group of finance ministers and central bank governors from 20 major economies: 19 countries plus the European Union, which is represented by the President of the European Council and by the European Central Bank...
- G20 developing nationsG20 developing nationsThe G20 is a bloc of developing nations established on 20 August 2003. Distinct and separate from the G-20 major economies, the group emerged at the 5th Ministerial WTO conference, held in Cancún, Mexico, from 10 September to 14 September 2003...
- G77Group of 77The Group of 77 at the United Nations is a loose coalition of developing nations, designed to promote its members' collective economic interests and create an enhanced joint negotiating capacity in the United Nations. There were 77 founding members of the organization, but the organization has...
- BRIMC
- BRICBRICIn economics, BRIC is a grouping acronym that refers to the countries of Brazil, Russia, India and China, which are all deemed to be at a similar stage of newly advanced economic development...
- Next ElevenNext ElevenThe Next Eleven are eleven countries—Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, South Korea, Turkey, and Vietnam — identified by Goldman Sachs investment bank and Jim O'Neill as having a high potential of becoming, along with the BRICS, the world's largest...