This paper is written by Dr Razeen Sally who is also the IDEAS’ Chair in Political Economy and Governance and Associate Professor at the Lee Kuan Yew School of Public Policy, National University of Singapore.
This paper will explain on how can capitalism thrive in Asia. Capitalism’s regulations and institutions vary enormously across Asia. So do political systems. Asia has only five high income countries: Japan, South Korea, Taiwan, Hong Kong and Singapore. They have living standards equivalent to those in the West. China, Malaysia and Thailand are in the upper middle-income bracket. Most Asian countries are lower middle income, including India, Indonesia, Philippines and Vietnam. And some are still very poor. Nepal and Cambodia are still in the low income bracket; Bangladesh, Laos, Myanmar and East Timor are only slightly above it. There is also large variation within countries. China’s first tier cities and coastal provinces have much higher living standards than its lower-tier cities and interior provinces. Similar gaps exist in India.