Apr 1, 2015

IR - One Definition A Day: NIC (Newly Industrialized/Industrializing Country)

 IR - One Definition A Day: NIC - Newly Industrialized/Industrializing Country (p. 372, réf 1)

NIC is an acronym for Newly Industrialized / Industrializing Country (both terms are found in the literature). 

There is some debate and discrepancy about the membership of this grouping but four unequivocal NICs can be identified in the region of East Asia: South Korea, Taiwan, Hongkong and Singapore. Other putative NICs in other regions of the system are referred to below. In passing it should also be noted that of the above four, Hongkong is sui generis. Its status was that of a dependent territory, not a state: it has now been repatriated to China. Nor does its undoubted economic prosperity make it typical of the NICs. Unlike the other three, Hongkong has developed as a key financial and business centre, playing an entrepôt role vis-à-vis China and East Asia in general.

Notwithstanding the Hongkong case, the NICs have been able to expand their manufacturing sectors because they have enjoyed advantegeous comparative costs vis-à-vis the market leaders, the advanced industrial countries (AICs). They have a high level of entrepreneurial skill amonst their populations, an open economy regarding foreign invesetment and stable, if undemocratic, potlitical regimes. 

The emergence of the NICs exemplifies a real shift in productive resources from the North to selected sites in the South. Typical examples of manufacturing growth can be cited in such fields as: cars and trucks, consumer electrical goods, shipbuilding, steels and textiles. Among Third World states the NICs stand out for their achievement of self-sustained, export-led economic growth. They have, moreover, avoided the kinds of debt problems associated with the recent economic performance of the putative NICs of Latin America. 

The evident success of these NICs has had two effects upon the relations in the field of political economy. First, their success has weakened the concept of Third World solidarity. Ideologically the NICs have achieved their impressive economic performance by applying the principles of economic liberalism and by following the example of Japan. They have been willing to see multinational companies (MNCs) investment in their economies and have often facilitated such capital flows by offering a permissive taxation regime to corporations. Their political systems, if stable, have poor human rights records and limited and restricted opportunities for participation. 

The second consequence of NIC success has been that it has provoked a backlash amongst the AICs. One form this has taken has been for increases in protectionism on the grounds that 'cheap' imports are flooding into home markets from these areas. A second response, particularly favoured in the United States, is to argue that the NICs have 'graduated' into the first division and that henceforth they should cease to regard themselves, or be regarded by others as Third World states requireing special consideration. Institutionally their appropirate destination would seem to be the Organisation for Econocomic Cooperation and Development (OECD) according to this perception.
Four unequivocal NICs were identifed earlier. Overlapping membership with the colloquial Asian Tigers is evident. 

Putative membership for the next decade and the new century must include many - if not all- of the recently identified big emerging markets (BEMs).

(Source: Dict Penguin IR)

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