Two decades after Asia's Tigers stumbled, they still teach the world how to grow

The four Asian tigers — Hong Kong, Singapore, South Korea and Taiwan — once fascinated the economic world.

From the early 1960s until the 1990s, they regularly achieved double-digit growth. A generation that had toiled as farmers and laborers watched their grandchildren become some of the most educated people on the planet.

The tigers started by making cotton shirts and plastic flowers. Before long, they were producing memory chips, laptops and equity derivatives. In the process they spawned a debate about the source of their success. Some attributed it to the anvil of government direction; others to the furnace of competitive markets.

Then the world turned away. The Asian financial crisis destroyed their mystique. China became the new development star, even if, to a certain extent, it followed their lead. This year, the U.S. is on track to grow more quickly than all four of the tigers.

They all have seemingly intractable problems: stagnant wages in Taiwan, the dominance of big business in South Korea, an underclass of cheap imported workers in Singapore and a government in Hong Kong that will not, or cannot, listen to its people.

But it is a mistake to write off the tigers. A closer look at their economic record shows that they have much to boast about. The trajectory of their GDP per person, calculated at purchasing-power parity, has remained impressive. They blew past the supposed middle-income trap long ago. And South Korea will soon become the fourth tiger to overtake Japan, its former imperial ruler and economic mentor.

They have also gained ground on the U.S. Singapore passed it in the 1990s; Hong Kong drew level in 2013; and the other two have narrowed the gap. Indeed, in the past five years (2013-18), the GDP per person of Singapore and Hong Kong has grown faster than every country above them in the income rankings. With a couple of exceptions, the same is true of Taiwan and South Korea.

The first is that many of the tigers' problems result from economic success, not failure. They have defended their global export share for years, despite steady increases in labor and land costs. Now, though, they will struggle to expand their exports faster than global demand. They have also reached the technological frontier in many industries. That makes further improvement harder: they are no longer catching up with global best practices but trying to reinvent them.

Lee Kuan Yew, Singapore's founding father, once claimed that harmony and stability are chief among "Asian values." The tigers still cherish these things, but many of their citizens see fairness as a precondition for both.

Some argue that the blustery politics of Taiwan and South Korea have hindered their growth. But an examination of the tigers' record does not support that argument. Instead, what has become clear in Hong Kong is that a lack of democracy is a grave liability.

The tigers' thin welfare states have also become a hindrance. Their leaders have traditionally worried that redistribution and social spending would sap their populations' motivation to work. But social insecurity instead risks sapping their populations' willingness to embrace technological change. As the nations'' populations age, their governments face more pressure to spend on pensions and health care. And they need to alleviate the economic burdens that dissuade young people from having children. The growth-obsessed "developmental states" must, in short, become growth-friendly welfare states.

Finally, the tigers are important as economic bellwethers. They are unusually exposed to deep global cycles: in technology, finance and geopolitics. The manufacturing tigers have dominated narrow slices of the technological supply chain, focusing on techniques and chips that are vital for high-speed 5G networks and "big data" processing.