Former Tigers, particularly small Countries who thrived during the previous era of false economics are now in danger of bankruptcy, and immense economic change. These countries include Britain, Estonia, Iceland, Ireland, Singapore, South Korea, and Spain.
Some grew fast because they were export driven economies to the USA, others financial service centers that grew as the bubble economy expanded, some because they were built on a property “bubble,” that overvalued properties based on real spending power.
1. Iceland
Already Iceland has been badly hit by this change, and its future lies in servicing the immense debts the country has amassed, by looking at exporting geothermic energy produce and expertise, whilst expanding its existing fishing industry. Iceland has a small population, a large land mass, and expertise in green technologies, which could help in the long term.
2. Britain
The UK is still fortunate as it still has Oil resources, something most countries in Europe lack. But with a over-valued Housing market, and collapsed banking and service industry, Britain is wedged in the bottom of a fault line. The weaker pound could help some exports, but the UK is a post-industrial society, and may need to change back to expanding its agriculture, reinventing its industrial base, whilst exporting more oil.
3. Singapore
Singapore is still a wealthy cash rich Island state, but the faults in its economy is that it depended on financial services, tourism from western countries and importing all the resources it needs, like water. This means Singapore could be out of options, when labor is cheaper in the region, and the Financial service Industry is dying in the West. Singapore, simply depended too much on the European, and North American markets.
Singapore is cash rich, and could use the cash to reinvent and diversify its economy, but the question still remains on the nation’s dependency on importing, even simple things like water, could be Singapore’s biggest weakness.
4. Spain
Spain was primarily driven by a real estate boom, that turned to bust because properties became “over priced,” whilst property ownership was credit driven based on unrealistic Mortgages. Spain is “sub- prime” territory, with some regions dependent on the property industry, for most of its income. Spain is also too expensive for most Tourists, but still has a thriving agricultural, and fishing industry. This may be Spain’s future.
5. South Korea
South Korea is resource poor Countries that exported, primarily because labor was less expensive than in neighboring Countries, whilst the country exported its own manufactured products.
Hit hard, because South Korea exported most of its products to Europe or the USA. In the case of South Korea, exports may have to be diversified, but they face competition from a cheaper China, and these exports can be made in most Countries in Asia.
6. Estonia
Estonia was Central Europe’s “baby-Tiger.” A small Country bordering Russia, that produced quality products for mainly European-based Corporations. Estonia diversified into Tourism, the property market, and a mini IT/ financial service industry.
All now hit by the economic crisis, whilst without these industries Estonia only has a reasonably educated, and inexpensive pool of workers, and an efficient agricultural industry. Estonia is turning back the clock, and may in the future depend on downsizing and reinventing these industries, whilst turning to “niche” agriculture, tourism and exporting its skilled labor overseas.
7. Ireland
Ireland, a resource poor nation, may have to return to immigration as a means to relieve the pressure on a highly toxic economy. The Celtic Tiger is now on its knees, because Ireland thrived primarily due to a unrealistic Real Estate boom, and an IT boom highly linked to the European Union, and the USA.
Ireland’s future may be linked to the nation’s expertise in IT, whilst Tourism and “Green” Agriculture, will always be beneficial to the nation’s economy.
8. The USA
Current conservative estimates state that the USA, has to spend 79% of the Nations annual GDP on servicing its debts, Debts that may not include private debts exposed to toxic stocks, over-valued housing and easy personal credit.
The USA still has a future, in many ways the USA is highly innovated in technology, the mid-west is partly the World’s food basket, and the USA is still the most innovative in Military and Space Technology.However, the Nations debts will sooner or later have to be paid, whilst key areas of the economy need changing. Turning “Green” costs money, so does bailing out over-extended banks and key industries.
One fact remains, the USA has lost financial creditability, and the USA is not the best economic modal to follow in 2009. These two things could hinder, the reinvention of the economy, whilst stronger competitors take the economic initiative.
During “good times” many of these Countries were considered examples of building a modern economy, but only four weeks during September/October 2008 showed that the years of growth, were actually based on bad long term economics. All will survive, but face deep challenges in the future.
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