Newly industrialized country

From Wikipedia, the free encyclopedia
Jump to: navigation, search
Newly industrialized countries shown in blue. Rest of the developing countries are shown in green

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 a developed country's status but have, in a macroeconomic sense, outpaced their developing counterparts. Another characterization of NICs is that of countries undergoing rapid economic growth (usually export-oriented). Incipient or ongoing industrialization is an important indicator of an NIC. In many NICs, social upheaval can occur as primarily rural, or 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:[citation needed]

Historical context[edit]

The term came into use around 1970, when the Four Asian Tigers[1] of Hong Kong, Singapore, South Korea, and Taiwan rose to global prominence as NICs in the 1970s and 1980s, with exceptionally fast industrial growth since the 1960s; all four economies have since graduated into advanced economies and 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 countries have now not only reached but surpassed the ranks of many developed countries.

All four economies are classified as high-income economies by the World Bank and Advanced economies by the International Monetary Fund (IMF) and U.S. Central Intelligence Agency (CIA). All of them, like Western European countries, possess Human Development Index considered "very high" by the UN.

Current NICs[edit]

The table below presents the list of countries consistently considered NICs by different authors and experts.[2][3][4][5] Turkey and South Africa are classified as developed countries by the CIA.[6] Turkey was 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.

Note: Green-colored cells indicate higher value or best performance in index, while yellow-colored cells indicate the opposite.

Region Country GDP (PPP)
(international billions of dollars, 2015 IMF)[7]
GDP per capita (PPP)
(international dollars, 2015 IMF)[8]
Income inequality (GINI) 2008–09[9][10] Human
(HDI, 2015)[11]
Real GDP growth rate as of 2015 Sources
Africa  South Africa 723.5 13,165 63.1 0.666 (medium) 1 [3][4][5]
South America  Brazil 3,192.4 15,615 54.7 0.755 (high) -3 [2][3][4][5]
Asia  China 19,392.4 14,107 45.3 0.727 (high) 6.8 [3][4][5]
 India 7,965.2 6,162 32.5 0.609 (medium) 7.4 [3][4][5]
 Indonesia 2,842.2 11,126 36.8 0.684 (medium) 4.8 [3][4][5]
 Malaysia 815.6 26,315 46.2 0.779 (high) 4.7 [3][4][5]
 Philippines 741.0 7,254 46.1 0.668 (medium) 6.5 [2][3][4][5]
 Thailand 1,108.1 16,097 40 0.726 (high) 3.5 [2][3][4][5]
Transcontinental  Turkey[a] 1,588.8 20,438 39 0.761 (high) 4.0 [3][4][5]

For China and India, the immense population of these two countries (each with over 1.2 billion people as of September 2015) 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. GDP per capita typically is an indicator for living standards in a given country as well.[12]

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 expand to G14 by adding Egypt alongside the five forementioned countries.[14]

Other NICs[edit]

Authors set lists of countries accordingly to different methods of economic analysis. Sometimes a work ascribes NIC status to a country that other authors don't consider NIC. This is the case of countries such as Argentina, Chile, Egypt, Sri Lanka[15] and Russia.[2]

Criticisms of NICs[edit]

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 trade unions and other organizations have more political sway.

This comparative advantage is often criticized by advocates of the fair trade movement.

Critics of NICs argue economic freedom is not always associated with political freedom in countries such as China, pointing out that Internet censorship and human rights violations are common.[16]The case is diametrically opposite for India. While being a liberal democracy throughout after its independence, India has been widely criticized for its inefficient governance and slow process of structural reform. Thus, while political freedom in China remains limited, the average Chinese citizen enjoys a higher standard of living than his or her counterpart in some regions of India.[17]

Problems NICs Face[edit]

Meanwhile, South Africa faces an influx of immigrants from countries such as Zimbabwe, although many also come from Burundi, Democratic Republic of the Congo, Rwanda, Eritrea, Ethiopia and Somalia.[16] While South Africa is considered wealthy on a wealth-per-capita basis, economic inequality is persistent and extreme poverty remains high in the region.[17]

Mexico's economic growth is hampered in some areas by an ongoing drug war in the north of the country.[18]

Meanwhile, other NICs face common problems such as widespread corruption and/or political instability as well as other circumstances that cause them to face the "middle income trap".

See also[edit]



  1. ^ Turkey is physiographically considered a transcontinental country—mostly in Western Asia, partly in Eastern Europe. However, in terms of geopolitical regions, it is considered European.


  1. ^ "Japan Newly Industrialized Economies - Flags, Maps, Economy, History, Climate, Natural Resources, Current Issues, International Agreements, Population, Social Statistics, Political System". 
  2. ^ a b c d e Paweł Bożyk (2006). "Newly Industrialized Countries". Globalization and the Transformation of Foreign Economic Policy. Ashgate Publishing, Ltd. p. 164. ISBN 0-7546-4638-6. 
  3. ^ a b c d e f g h i j Mauro F. Guillén (2003). "Multinationals, Ideology, and Organized Labor". The Limits of Convergence. Princeton University Press. pp. 126 (Table 5.1). ISBN 0-691-11633-4. 
  4. ^ a b c d e f g h i j David Waugh (2000). "Manufacturing industries (chapter 19), World development (chapter 22)". Geography, An Integrated Approach (3rd ed.). Nelson Thornes Ltd. pp. 563, 576–579, 633, and 640. ISBN 0-17-444706-X. 
  5. ^ a b c d e f g h i j N. Gregory Mankiw (2007). Principles of Economics (4th ed.). ISBN 0-324-22472-9. 
  6. ^ "The World Factbook". 
  7. ^ "Gross domestic product based on purchasing-power-parity (PPP) valuation of country GDP". IMF. Retrieved 5 May 2016. 
  8. ^ "Gross domestic product based on purchasing-power-parity (PPP) per capita GDP". IMF. Retrieved 5 May 2016. 
  9. ^ "GINI Index Data Table". World Bank. Retrieved 4 April 2012. 
  10. ^ Note: The higher the figure, the higher the inequality.
  11. ^ "HUMAN DEVELOPMENT REPORT 2015" (PDF). United Nations. Retrieved 15 December 2015. 
  12. ^ "How Do We Measure Standard of Living?" (PDF). The Federal Reserve Bank of Boston. 
  13. ^ G8 Structure and activities
  14. ^ "France invites Egypt to join G14"[dead link]
  15. ^ John Broman (1996). Popular Development: Rethinking the Theory and Practice of Development. Wiley-Blackwell. p. 81. ISBN 1-557-86316-4. 
  16. ^ Refugees, United Nations High Commissioner for. "UNHCR Global Appeal 2011 (update) - South Africa". UNHCR. 
  17. ^ Sedghi, Ami; Anderson, Mark (31 July 2015). "Africa wealth report 2015: rich get richer even as poverty and inequality deepen". The Guardian. 
  18. ^ Drug Trafficking, Violence and Mexico's Economic Future - Knowledge@Wharton. Retrieved on 2013-07-28.