NIC Impact On The Global Economy

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An economy is a the state of a country or region in terms of the production and consumption of goods and services and the supply of money, and it can also exist on a national and global scale, therefore if countries trade goods and services with each other, their economies interact and this is known as globalization, this interaction of economies on a worldwide scale is else known as the global economy, where NICs have played a vital role in changing how it operates. An NIC (Newly Industrialised Nation) is a country where the industrial production has grown sufficiently since the beginning of the 1960s, and has therefore become a major source of their income as an economy.

NICs have started to make their mark on the global economy. As they
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Due to the emergence of manufacturing within these countries in the 60s this very soon led to many NICs developing via an export led market. Whereby the traditional route taken by LEDCs in pursuit of economic development is that import substitution industries, previously imported manufactured goods from other countries have been replaced by goods manufactured and produced in the country itself, thus saving precious currency in the process. This therefore meaning that more countries will begin to adapt and utilize this technique of an export led market in aim of developing economically, which over time would result in a dramatic increase in a countries wealth. As for Singapore in the late 1960s the first factory was set up where the GDP per capita was US$925.28 then over the years it grew exponentially to US$26,262.28 in 1996 then to this date the GDP per capita stands at 4th in the world, given from data presented by the World Bank they had a GDP per capita of US$78,744 in…show more content…
They have not followed the typical model of import substitution with an aim of becoming self-sufficient, instead they have focused on exports, arguably preying on the on the healthy economic state of developed nations. But this activity isn’t sustainable within the global economy, from the 1960s to the 1980s the Tigers pursed this method of development, but by the 1990s their economies had expanded too fast and prices of property, stocks and shares had become overvalued. This caused many stock markets to crash and sparked a worldwide financial crisis, which required money from the IMF and external privatized companies. You could therefore say that they are drastically important within the global economy, for they are truly sculpting the global economy. Furthermore they can easily lose their competitive edge and collapse this was the case with the Asian Tigers by losing their competitive edge to latter examples of NICs such as China, which was devastating to their own economy and potentially their instability could remove a large portion of their influence on the global
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