For centuries, countries along the North Atlantic Ocean dominated global politics. Portugal, Spain, the Netherlands, France, Great Britain, Germany, Russia, and the United States succeeded each other as the main economic, military, and political powers. Asia was a relatively underdeveloped economic area until the second half of the twentieth century, when the continent experienced the most rapid economic expansion in the world. Some economists predicted that the global economic center would shift from the North Atlantic to the Pacific in the twenty-first century.
These newly emerging economic powers represent both trading partners and competitors to one another. Changing economic systems can outstrip the political institutions and lead to turmoil. Rapid economic progress can lead to unrealistic expectations. If these unrealistic expectations are disappointed in an economic downturn, revolutions and political disorder can follow.
Japan's was the first modern Asian economy to emerge. Japan became the most modernized Asian country and developed the second-largest economy in the world. Still, Japan has very few natural resources and must depend on its ability to manufacture goods out of raw materials imported from abroad. The possibility that the Japanese would react dangerously if they lost this ability is only one possible conflict.
Following the Japanese lead, Taiwan, South Korea, Singapore, and Hong Kong made rapid gains in economic productivity. While Singapore and Hong Kong were, in effect, small city-states, Taiwan and Korea were both sizable countries where the total wealth produced was considerable.
After these "four tigers" emerged, Thailand, Malaysia, and Indonesia attempted to make some progress in reaching a take-off stage in their economic development. In the early 1990's, it appeared that East and Southeast Asia would become the world's economic powerhouse. In the late 1990's, however, the region slipped into an economic downturn that affected even Japan. Thailand's economy began to falter in 1996, and in 1997 a general slowing, combined with excessively speculative investment in the Thai real estate market, led to a devaluation of the Thai currency. The financial problems spread through the region and by 1998 Japan began to slip into recession. Although officials continued to expect an end to the recession, during the first few years of the new century, Japan's trade was steadily declining as shrinking economies in other countries meant diminishing demand for products. With slowing markets around the world in the latter part of 2001 and into 2002, many of the export-oriented economies of East and Southeast Asia were stumbling.
World History
