What is a Tiger Economy?

Malcolm Tatum
Malcolm Tatum

A tiger economy is a term used to describe a national economy that experiences a period of unanticipated and rapid growth. As a result of that increase in economic growth, the general standard of living within that country also undergoes drastic changes that allow the population to enjoy a higher living standard. While the term was originally coined to describe a phenomenon that took place amount several nations in the Southeast Asia, a tiger economy has since been applied to any special economic zone that undergoes rapid economic growth anywhere around the world.

The flag of Hong Kong, one of the first tiger economies.
The flag of Hong Kong, one of the first tiger economies.

When first used, the tiger economy described an economic phenomenon that was occurring in the nations of Thailand, Taiwan, Singapore, Hong Kong, South Korea, and Japan. Those nations were enjoying a dramatic upswing in economy, since they enjoyed a profitable balance of trade. With investment capital flowing into the nations and an increase in export activity, those nations were in turn able to also increase import activity, allowing consumers to enjoy goods and services not produced within those nations. The end result was an emerging market economy that was strong, vibrant, and ultimately benefited just about everyone involved in the spurt of economic growth.

Developing countries that experience rapid, unexpected economic growth are referred to as tiger economies.
Developing countries that experience rapid, unexpected economic growth are referred to as tiger economies.

Since the latter part of the 20th century, a tiger economy has come to identify any national or group of national economies that experience this type of rapid growth and subsequent increase in the standard of living for their citizens. Often, nicknames are also applied to the specific grouping of nations that undergo this type of prosperity. For example, When the Republic of Ireland experienced this type of growth during the decade of the 1990’s, the nation was referred to as the Celtic Tiger. In the case of the tiger economy that developed in Japan, Taiwan and other nations in the southeastern area of Asia, they were collectively referred to as the East Asian Tigers.

A rapidly growing tiger economy is able to increase export activity, which in turn leads to an increase in import activity.
A rapidly growing tiger economy is able to increase export activity, which in turn leads to an increase in import activity.

One of the potential pitfalls of a tiger economy is that the phenomenon may not be sustainable over the long term. Many of the nations that experienced this type of economic growth during the last twenty years of the 20th century also underwent economic downturns after the rapid prosperity leveled off after seven to ten years. In many cases, countries that experience a tiger economy manage to overcome the subsequent downturn and emerge with economies that is stable, although somewhat less spectacular than during the glory years. Typically, financial experts are able to determine what events and decisions led to undermining the rapid growth and take steps to minimize those factors in the future, a measure that increases the chances of the country’s economy remaining stable during subsequent shifts in the worldwide economy.

South Korea is one of the many Asian nations that are described as having a 'tiger economy'.
South Korea is one of the many Asian nations that are described as having a 'tiger economy'.
The term "tiger economy" could have described Japan's economy in the 1990s.
The term "tiger economy" could have described Japan's economy in the 1990s.
Malcolm Tatum
Malcolm Tatum

After many years in the teleconferencing industry, Michael decided to embrace his passion for trivia, research, and writing by becoming a full-time freelance writer. Since then, he has contributed articles to a variety of print and online publications, including wiseGEEK, and his work has also appeared in poetry collections, devotional anthologies, and several newspapers. Malcolm’s other interests include collecting vinyl records, minor league baseball, and cycling.

You might also Like

Readers Also Love

Discussion Comments

ZipLine

@literally45-- The tiger cubs are Indonesia, Philippines, Thailand and Malaysia as of 2013. They are referred to as cubs because they haven't reached the economic growth enjoyed by the original four tigers, but they're getting there. These four countries are the next tigers and there will definitely be more tiger cubs to follow. So any nation that's following in the footsteps of a tiger economy and has started achieving success is referred to as a tiger cub.

I think these metaphors for economies are very interesting and cute.

literally45

I know that there are four Asian tigers -- Singapore, South Korea, Taiwan and Hong Kong. But who are the Tiger cubs? I heard this term just recently.

SteamLouis
The tiger economies of Asia came as a surprise for the whole world. I think it was particularly surprising because the same countries had experienced a severe economic crisis a few decades before. No one expected these economies to grow so rapidly.

The original tiger economies also brought hope for other nations who are trying to increase the rate of their economic growth. Just as an economic crisis in one country and region causes issues in the economies of neighboring countries, neighbors to tiger economies also benefit.

Let's take China for example. China is a tiger economy and as a result of its rapid economic growth, China was able to invest in many Eastern African countries. So the economies of those countries improved as well.

Post your comments
Login:
Forgot password?
Register: