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The category of newly industrialized country (NIC) is a socioeconomic classification applied to several countries around the world by political scientists and economists.
NICs are countries whose economies have not yet reached first world status but have, in a macroeconomic sense, outpaced their developing counterparts. Another characterization of NICs is that of nations undergoing rapid economic growth (usually export-oriented). Incipient or ongoing industrialization is an important indicator of a NIC. In many NICs, social upheaval can occur as primarily rural, agricultural populations migrate to the cities, where the growth of manufacturing concerns and factories can draw many thousands of laborers.
NICs usually share some other common features, including:
NICs often receive support from international organizations such as the WTO and other internal support bodies. However, as environmental, labor and social standards tend to be significantly weaker in NICs, many fair trade supporters have advocated standards for importing their products and criticized the outsourcing of jobs to NICs.
The term began to be used in the 1970s when the "East Asian Tigers"[1] of Hong Kong, South Korea, Singapore and the Republic of China (Taiwan) rose to global prominence with rapid industrial growth since the 1960s, all now having evolved far beyond this status. There is a distinction between these countries and the nations now considered to be NICs. In particular, the combination of an open political process, high per capita GDP income and a thriving, export-oriented economic policy has shown that these countries have now reached the ranks of developed countries. All of them possess a Human Development Index over 0.9, equal to the average of EU countries. Finally, South Korea joined the OECD in 1997.
The following table presents the list of countries consistently considered NICs in each continent by different authors and experts.[2][3][4][5] Turkey and South Africa are classified as developed countries by the CIA.[6] Turkey is a founding member of the OECD since 1961 and Mexico joined in 1994. The G8+5 group is composed by G8 members plus China, India, Brazil, Mexico and South Africa.
According to Goldman Sachs BRIMC review of emerging economies, by 2050 the largest economies in the world will be as follows: China, USA, India, Japan, Brazil, and Mexico.[12]
For China and India, the immense population of these two nations (each with over one billion people as of November 2006) 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.
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.[13]. This group is expected to be expanded to G14 by adding Egypt alongside the five forementioned countries.[14]
Each author set a list of countries accordingly to the methods or type of economic analysis. This sometimes results in a country being mentioned as NIC in a particular work, but that is rarely considered as such by the other authors. This is the case of nations such as Indonesia and Russia.[2]
NICs usually benefit from comparatively low labor 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 labor unions and other organizations have more political sway.
This comparative advantage is often criticized by advocates of the fair trade movement.
Economic freedom is not always associated with political freedom in nations such as the People's Republic of China, where Internet censorship and other abuses of civil rights are common. The case is diametrically opposite in the case of the other Asian giant, India, which has been a liberal democracy throughout its post-colonial history. Other NICs vary between these two opposing examples. The Chinese government has responded to these accusations by arguing that China's increasing standard of living has provided a utilitarian social benefit that outweighs the detrimental effect of individual violations.
India faces different types of issues compared to China. While China's economy has greatly benefited due to foreign investment by wealthy neighbors such as South Korea, Japan and Taiwan, four of the nine nations neighboring India are classified as Least Developed Countries. South Africa faces an influx of immigrants from countries such as Zimbabwe.
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Last updated on Monday September 24, 2007 at 05:23:47 PDT (GMT -0700)
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