The majority of economically developed countries have educational systems based from the bottom up. That is, the educational systems cater to the least common denominator. They provide equal or at least similar educational quality to all students regardless of wealth in order to create a truly meritocratic society where talent is more important than wealth.
However, many of the economically underdeveloped nations in Asia have diverged from this model, choosing instead to minimize education spending. The United Nations set the precedent that nations should devote at least 6% of the GDP to education spending. However, only two Asian nations surpass this threshold: Maldives and Uzbekistan. In the majority of Asian nations, the only hope that students have for a sufficient education is private education. As a result, over 50% of the world’s private schools (not including tertiary education) are located in Asia, despite Asia’s low average GDP per capita. This leads to societies with little upward socioeconomic mobility. After all, education plays a key role in determining one’s economic future, and students from wealthier families will invariably have greater opportunities. Although morally wrong, this is also economically inefficient. A meritocratic economic model increases competition and thus economic growth.
The issue of education highlights greater woes for the ‘Asian tiger’ economies. The majority of these nations have posted record economic growth in the past two decades. However, income inequality has also risen dramatically in these nations. Their newfound wealth is disproportionately confined to the wealthy. While economic inequality and a burgeoning upper class is generally conducive to economic growth, high economic inequality tends to lead to social unrest, which can cripple a nation’s economy and political structure. The last large-scale experiment with laissez faire capitalism was in Europe during the Industrial Revolution; at that time, most of Europe’s monarchs were disposed. In Russia, it led to the birth of Communism. While some of these developments, such as the birth of democracy, were beneficial for citizens, the abrupt change in government led to economic stagnation for a long period. This is almost entirely as a result of a lack of spending on public education.
Another downfall of economic inequality is the volatility of markets. The two times in American history when income inequality was the highest were in 1929 and 2008. Both were the years preceding a huge market recession. The fact of the matter is that providing institutions to benefit the rich leads to the creation of larger enterprises able to acquire smaller ones. Corporations should never be large enough to be politically powerful, but a laissez faire capitalism model allows for that.
If developing Asian nations hope to achieve sustainable economic growth, they must adopt an educational model to cater to students of all economic backgrounds in order to reduce income inequality, market volatility, and prevent citizen unrest.