Newly industrialized country
{{short description|Socioeconomic classification}}
The category of newly industrialized country (NIC), newly industrialized economy (NIE) or middle income country{{cite book|title=Essentials of Comparative Politics|chapter=Glossary|page=A-19|author=Patrick H. O’Neil|publisher=W. W. Norton & Company|year=2018|edition=6th|isbn=978-0-393-62458-8}} is a socioeconomic classification applied to several countries around the world by political scientists and economists. They represent a subset of developing countries whose economic growth is much higher than that of other developing countries; and where the social consequences of industrialization, such as urbanization, are reorganizing society.
Definition
NICs are countries whose economies have not yet reached a developed country's status but have, in a macroeconomic sense, outpaced their developing counterparts. Such countries are still considered developing nations and only differ from other developing nations in the rate at which an NIC's growth is much higher over a shorter allotted time period compared to other developing nations.{{cite book|title=Essentials of Comparative Politics|chapter=Chapter 10: Developing Countries|pages=304–337|author=Patrick H. O’Neil|publisher=W. W. Norton & Company|year=2018|edition=6th|isbn=978-0-393-62458-8}} Another characterization of NICs is that of countries undergoing rapid economic growth (usually export-oriented).{{cite journal|url=https://www.imf.org/external/pubs/ft/wp/2016/wp16207.pdf|title=The Role of Newly Industrialized Economies in Global Value Chains|journal=IMF Working Paper|publisher=International Monetary Fund|author=Dominik Boddin|date=October 2016|access-date=28 September 2020}} Incipient or ongoing industrialization is an important indicator of an NIC.
Characteristics of newly industrialized countries
Newly industrialized countries can bring about an increase of stabilization in a country's social and economic status, allowing the people living in these nations to begin to experience better living conditions and better lifestyles. Another characteristic that appears in newly industrialized countries is the further development in government structures, such as democracy, the rule of law, and less corruption. Other such examples of a better lifestyle people living in such countries can experience are better transportation, electricity, and better access to water, compared to other developing countries and low infant mortality rate.
Historical context
The term came into use around 1970, when the Four Asian Tigers{{cite web|url=http://www.photius.com/countries/japan/government/japan_government_newly_industrialized~447.html|title=Japan Newly Industrialized Economies|website=photius.com|date=January 1994}} of Taiwan, Singapore, Hong Kong and South Korea rose to become globally competitive in science, technological innovation and economic prosperity as well as NICs in the 1970s and 1980s, with exceptionally fast industrial growth since the 1960s; all four countries having since graduated into high-tech industrialized developed countries with wealthy high-income economies. There is a clear distinction between these countries and the countries now considered NICs. In particular, the combination of an open political process, high GNI per capita, and a thriving, export-oriented economic policy has shown that these East Asian economic tiger countries have roughly come to a match with developed countries as those of Western Europe as well Canada, Japan, Australia, New Zealand and the United States.
All four countries are classified as high-income economies by the World Bank and developed countries by the International Monetary Fund (IMF) and U.S. Central Intelligence Agency (CIA). All of the Four Asian Tigers, like Western European countries, have a Human Development Index considered "very high" by the United Nations.
Current
The table below presents the list of countries consistently considered NICs by different authors and experts.{{cite book|url=https://books.google.com/books?id=iuHsIuez5qoC|title=Globalization and the Transformation of Foreign Economic Policy|author=Paweł Bożyk|chapter=Newly Industrialized Countries|page=164|publisher=Ashgate Publishing, Ltd|year=2006|isbn=0-7546-4638-6}}{{cite book|title=The Limits of Convergence|author=Mauro F. Guillén|author-link=Mauro F. Guillén|chapter=Multinationals, Ideology, and Organized Labor|pages=126 (Table 5.1)|publisher=Princeton University Press|year=2003|isbn=0-691-11633-4}}{{cite book|title=Geography, An Integrated Approach|author=David Waugh|chapter=Manufacturing industries (chapter 19), World development (chapter 22)|pages=563, 576–579, 633, and 640|publisher=Nelson Thornes Ltd.|year=2000|edition=3rd|isbn=0-17-444706-X}}{{cite book|title=Principles of Economics|author=N. Gregory Mankiw|year=2007|publisher=Cengage Learning |edition=4th|isbn=978-0-324-22472-6}} Turkey and South Africa were classified among the world's 34 developed countries (DCs) by the CIA World Factbook in 2008.{{cite web|url=https://www.cia.gov/library/publications/the-world-factbook/appendix/appendix-b.html|title=Appendix B :: International Organizations and Groups|work=The World Factbook|publisher=Central Intelligence Agency|access-date=28 September 2020|archive-date=9 April 2008|archive-url=https://web.archive.org/web/20080409033504/https://www.cia.gov/library/publications/the-world-factbook/appendix/appendix-b.html|url-status=dead}} Turkey became a founding member of the OECD in 1961 and Mexico joined in 1994. The G8+5 group is composed of the original G8 members in addition to China, India, Mexico, South Africa and Brazil. The members of the G20 include Brazil, China, India, Indonesia, Mexico, South Africa and Turkey.
Note: Green-colored cells indicate highest value or best performance in index, while yellow-colored cells indicate the opposite.
For China and India, the immense population of these two countries (each with over 1.4 billion people as of May 2024) means that per capita income will remain low even if either economy surpasses that of the United States in overall GDP. When GDP per capita is calculated according to purchasing power parity (PPP), this takes into account the lower costs of living in each newly industrialized country. Nominal GDP per capita typically is an indicator for living standards in a given country as well.{{cite web|title=How Do We Measure Standard of Living?|url=https://www.bostonfed.org/education/ledger/ledger03/winter/measure.pdf|website=The Federal Reserve Bank of Boston|date=14 February 2003}}
Brazil, China, India, Mexico and South Africa meet annually with the G8 countries to discuss financial topics and climate change, due to their economic importance in today's global market and environmental impact, in a group known as G8+5.
= Other =
Authors set lists of countries accordingly to different methods of economic analysis. Sometimes a work ascribes NIC status to a country that other authors do not consider a NIC. This is the case of countries such as Brunei, Mongolia{{cite book|title=Popular Development: Rethinking the Theory and Practice of Development|author=John Broman|page=81|publisher=Wiley-Blackwell|year=1996|isbn=1-557-86316-4}} and Vietnam.
Criticism
NICs usually benefit from comparatively low wage costs, which translates into lower input prices for suppliers. As a result, it is often easier for producers in NICs to outperform and outproduce factories in developed countries, where the cost of living is higher, and trade unions and other organizations have more political sway. This comparative advantage is often criticized by advocates of the fair trade movement.
Problems
While South Africa is considered wealthy on a wealth-per-capita basis, economic inequality is persistent and extreme poverty remains high in the country.{{cite web|last1=Sedghi|first1=Ami|last2=Anderson|first2=Mark|title=Africa wealth report 2015: rich get richer even as poverty and inequality deepen|url=https://www.theguardian.com/global-development/datablog/2015/jul/31/africa-wealth-report-2015-rich-get-richer-poverty-grows-and-inequality-deepens-new-world-wealth|website=The Guardian|language=en-GB|date=31 July 2015}} South Africa is a NIC with 34% of population unemployed and poor.
Other NICs face common problems such as widespread corruption and political instability, as well as other circumstances that cause them to face the middle income trap.
See also
References
{{Reflist|30em}}
{{G8 nations}}
{{Global economic classifications}}
{{South-South}}
{{International power}}
{{Authority control}}
Category:Economic country classifications