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History

Economic Expansion

Postwar economic and industrial expansion along Asia’s Pacific coast have supported claims that the world is on the threshold of the “Pacific century.” During the 1970s Japan outpaced the United States in automobile, steel, and electronic production. In 1970 the Japanese economy was just one-fifth the size of the U.S. economy. By 1992 it had grown to two-thirds the size of the U.S. economy; per person production was significantly higher than in the United States, and per capita growth was more than twice the U.S. rate. Japan has emerged as one of the world’s two economic superpowers, next to the United States.

Following in Japan’s footsteps, Asia’s “Four Tigers”—Hong Kong, Singapore, South Korea, and Taiwan—have prospered as they expanded manufacturing and exports. By the 1990s all were among the world’s top 20 exporters, along with China and Saudi Arabia. Altogether, Asian economies accounted for 17 of the world’s top 50 exporters.

Pacific Asian economic growth has not been without cost. Although there is a trend toward democratization in some countries, such as South Korea and Thailand, most retain authoritarian governments. Rapid industrial growth has often proved damaging to the environment. Inequalities in the distribution of income have generally worsened in the early industrialization phase, before slowly starting to improve.

In Southwest Asia, oil exports produced huge wealth. Although large sums ended up in private hands, much money was poured into social and modernization programs. Thousands of students who studied abroad returned to demand more rapid change than governments or conservative religious elements could accommodate. Such a climate preceded the Iranian revolution of 1979.

Oil also became a potent political weapon. During the Arab-Israeli War of 1973, Arab producers denied oil to countries supporting Israel. Acting together, the oil-exporting nations so escalated crude-oil prices during the late 1970s that oil-importing countries suffered severe inflation with concurrent recession. The Iran-Iraq War of the 1980s, which at first appeared to threaten oil output, actually had the effect of reducing oil prices because it fostered disunity among the oil-producing countries of the Middle East. Iraq’s 1990 invasion of Kuwait also affected oil output, as many of Kuwait’s oil wells were set on fire by Iraqi forces during their retreat from Kuwait in the 1991 Persian Gulf War. The war also emphasized the fragility of the Middle East’s political situation.

Profound changes—many of which should improve the economic and social development of Asia—have been initiated by the industrialization of the countries of Pacific Asia, the breakup of the Soviet Union, the emergence of more democratic governments, and the moves toward peace in the Middle East. Yet many political problems remain to be solved. Fighting in Afghanistan, the struggles of the Chechens in Russia, the Tamil push for a homeland independent of Sri Lanka, and the Tibetans urge for independence from China are some of the regional conflicts that remain in Asia. The countries of North America and Europe dominated most of the 20th century; Asia’s influence on world affairs is growing and will likely continue to expand in the 21st century.

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