Newly industrialized country

Newly industrialized countries as of 2013.

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 developed country 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, 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:

• Increased social freedoms and civil rights.
• Strong political leaders.
• A switch from agricultural to industrial economies, especially in the manufacturing sector.
• An increasingly open-market economy, allowing free trade with other nations in the world.
• Large national corporations operating in several continents.
• Strong capital investment from foreign countries.
• Political leadership in their area of influence.
• Rapid growth of urban centers and population.

Historical context

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 nations 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

The following table 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) (Billions of USD, 2011 World Bank)[7]	GDP per capita (PPP) (international dollars, 2012 IMF)[8]	Income inequality (GINI) 2008-09[9][10]	Human Development Index (HDI, 2013)[11]	GDP (real) growth rate as of 2013	Sources
Africa	South Africa	555.340	11,302	63.1	0.629 (medium)	2.5	[3][4][5]
North America	Mexico	1,659.016	15,300	48.3	0.775 (high)	3.9	[2][3][4][5]
South America	Brazil	2,309.138	12,038	54.7	0.730 (high)	0.9	[2][3][4][5]
Asia	China	11,316.224	9,146	45.3	0.699 (medium)	7.8	[3][4][5]
	India	4,469.763	3,851	32.5	0.554 (medium)	6.5	[3][4][5]
	Indonesia	1,223.488	5,302	36.8	0.629 (medium)	6.2	[3][4][5]
	Malaysia	447.595	16,942	46.2	0.769 (high)	5.6	[3][4][5]
	Philippines	424.355	4,264	43	0.654 (medium)	6.6	[2][3][4][5]
	Thailand	622.914	10,823	40	0.690 (medium)	6.4	[2][3][4][5]
Europe	Turkey[lower-alpha 1]	1,288.638	15,029	39	0.722 (high)	2.6	[3][4][5]

According to Goldman Sachs review of emerging economies, by 2050 the largest economies in the world will be as follows: China, USA, India, Brazil, and Mexico.^[12]

For China and India, the immense population of these two nations (each with over 1.1 billion people as of January 2009) 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 expand to G14 by adding Egypt alongside the five forementioned countries.^[14]

Other NICs

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 nations such as Argentina, Chile, Egypt, Sri Lanka^[15] and Russia.^[2]

Brief economic analysis

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.

Issues

Economic freedom is not always associated with political freedom in nations such as the People's Republic of China, where Internet censorship and human rights violations are common.^[16] The case is diametrically opposite for the Republic of 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] South Africa faces an influx of immigrants from countries such as Zimbabwe.^{[citation needed]} Mexico's economic growth is threatened by an ongoing drug war in the north of the country.^[18]

See also

• Emerging markets
• Science in newly industrialized countries
• Flying geese paradigm
• Developing country
• Developed country
• North–South divide

Groupings:

• G8+5
• G-20 major economies
• G20 developing nations
• BRIC / MIKT / Next Eleven
• Emerging and growth-leading economies
• TIMBI
• CIVETS

Notes

References

• The Planning Commission, Government of India