Term Paper: East Asia

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East Asia

Presently about 2 billion persons constitute the total population of the East Asia that is considered to be nearly thirty-three percent of the total population of the state. Out of the total population about 1.5 billion are concentrated in North-east Asia comprising primarily of China, Taiwan, Japan and Korea and the rest half a billion population in Southeast Asia mainly in the patch between Burma to the west and Vietnam and the Phillipines to the east. East Asia presently incorporates China, Indonesia, and Japan considered as the three of the world's eight most populous states. China is the most populous state in the World with a total of 1.25 billion people. Indonasia ranks fourth with 200 million people and Japn ranking eight have 125 million population. East Asia presently also incorporates five other states having a population of over 40 million people each. (Eberstadt, 35)

The population trend of the East Asia upto 2015 has been fixed on the basis of the previous mortality rates and trends in the fertility. Irrespective of a sequence of local violence and attack attributing to heavy toll of life in the post-World War period-such as Korean and Vietnam Wars, Great Leap Forward of China, Indonesia's post-Sukarno upheavals the, average life expectancy at birth has increased swiftly from 40 to 70 within the period of 1950s and the late 1990s. The trend of decline in mortlity rate has appeared to cross the global average for about the past half century. The life expectancy only in Burma, Cambodia, East Timor and Laos is seen to have declined below the average life expectancies prevailing in developing regions. Similar to the rates of mortality the fertility rate has also seen to have declined considerably. (Eberstadt, 36)

Only Japan could visualise in the late 1950s about secular stabilisation of the population through maintanance of the total fertility rate i.e. The births per woman per lifetime. In East Asia it is seen that the average fertility rate per woman was peculiarly five to seven children. It has been observed that the fertility levels appeared to have declined quite largely by the end of late 1990s that is considered to be equating to the replacement level for East Asia as a whole. This is quite astonishing to believe such a rapid decline in fertility rates within these four decades. In Southeast Asia also the fertility levels have declined by fifty percent during the same period with major decline being noticed within the last two decades. (Eberstadt, 36)

Presently the probability of the armed conflict between the major coutries in East Asia is considered to be very less in comparison to the other period of the century. This is due to the favorable influence of the economic forces in the sphere of cooperative international activity. The China especially has significantly developed its mutual relationship with all the countries in East and Southeast Asia. Besides, the Chinese relations with Russia have improved to a great extent during the last few years after giving effect to a sequence of current pacts over the hostilities at borders and undertaking several steps to restore the relationship. (Evans, 64)

Attainment of international security in East Asia during the initial part of the present century was assumed to be an inevitability of significant change. The harmony and firmness in general are the prime objectives that most nations desire to have in their security policy. However, firmness in any feasible security policy implies dynamic stability not static stability. Inflexible attempts for preservation of the existing state of affairs in East Asia found to be unsuccessful are considered harmful rather than beneficial, while coping up with the objective of security policy in East Asia to maintain a peaceful change rather than mere preservation. (Tanaka, 28) in the present days a new trend towards regionalism is growing to crop up in East Asia that demonstrates a clear diversion from the regional history of multidimensional policy. The states in the East Asia are emphasizing more on the methods of intensifying the intra-regional trade through giving effect to the establishment of regional trade agreements-like ASEAN Plus Three-APT; plans of formulating a free trade area comprising of ASEAN and China similar to the movement towards mutual trade agreements. (Hyun-Hoon, 54)

The growth rate in East Asia is quite significant for the last twenty-five years ever since 1970s; the period was named by the observers as Asian Miracle. (Hiroshi, 8) the growth rate in these economies and their steep industrial development tracks are both remarkable and matchless. Really, the region has become the leading member in the process of transformation of the developing countries into the rising markets with enthusiastic investors keen on their operation in the East Asian business potentials. (Denis, 58)

The economies of Japan and the Newly Industrializing Economies of Hong Kong, Singapore, Korea and Taiwan have acclaimed to be the paradigm of success for other rising economies. The East Asian success is attributed to many of the elements like outward inclination, high rates of saving and investment, adherence to the principles and policies of macroeconomic models and other policies, irrespective of the fact that the relative contribution of each of the factors explaining the success of the region is still under ambiguity. (Glick; Moreno, 16) the fast growth rate suddenly came to an end with the break out of the financial stringency during 1997. Many of the successful countries exhibited distressful recessions and confronted the probability of completion of the miracle that was supposed to exist since a long period of time. The Asian financial crisis, in deed, was considered to be an unprecedented event and was not practically predicted by any one. (Hiroshi, 10)

During the post financial crisis of 1997 the East Asia suffered from the never before harsh recession. The output reduced quite harshly in several economies during 1998 as much as 7% in Korea to 13% in Indonesia. However with the experience of sharp economic recession in 1998 some of the Fast Asian economics exhibited strong recovery with the support of growth in exports to the United States. It is quite astonishing to observe the quick recoup of the East Asian economics during the period. The financial sector disturbances were successful in removing the capital of most of the borrowers and their lenders. This resulted in harsh credit crisis where is the borrowers with viable projects were unable to get financed. Taking into account the deficiency of credit, recouping the growth rate and expenditure appear to require a prolonged process of repairing the financial sector by developing the balance sheet of lenders and borrowers. Rather the growth rate recouped somewhat quickly even much before solving all the problems in East Asian financial sectors. (Moreno, 4)

The quick recoup of the economy was attributed to two reasons. First of all and the most significant one is the reinforced global demand remarkably in the United States, contributing to persistent export growth and the restocking of the foreign exchange reserves. To illustrate in Korea the exports in terms of USD declined by more than 5% in 1998 but demonstrated a growth rate of 17% during 1999 and soared up to 22% in the second quarter of 2000 in comparison to that of the previous year.

The reserves of foreign exchange increased from 20.4 billion USD in 1997 to 92.5 billion USD in September 2000. The second incentive to growth is the extensive fiscal policies. The surplus budgeting strategy had to be shifted to deficit budgeting with a view to repairing the financial sector that enhanced the public debt. During period 1997 to 2000 the government budgeting in Thailand exhibited a deficit of 7% of GDP while the public sector debt increased from 27% to 66% of the GDP. The enhancement in public debt has been even more in Indonesia that rose form 25% in 1996 to 90% in 2000. (Moreno, 4)

Even though the present accomplishment of many of the Asian economies are quite remarkable yet the fact of decline in international demand influences the regional economic performance is a matter of great concern. This is greatly influenced by the impact of policy formulations and implementations in the region since the crises on the financial avenues. With a view to ensure the normalcy in respect of credit structure it is of great concern to think of the extent that the balance sheet of the lenders and borrowers upset during the crises are put or the right track. More particularly, it is worthwhile to watch the control of expanding unproductive loans. Secondly, it is also worth noting the degree of reformation in some of the institutional performances with a view to control the impetus of risk-taking with stimulation of market adjustment and competition. The response to these questions affects the toughness of the continuing recovery and the pliability of the East Asian economies in response to the future economic upsets.

Fortunately, the East Asian governments could succeed in reforming the balance sheets. The unproductive loans are taken out of… [END OF PREVIEW]

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