The paper analyzes the economic performance of the five large market economies of East Asia -- Korea, Thailand, the Philippines, Malaysia and Indonesia -- during the last two decades. It focuses on the key factors explaining their remarkable economic and social progress. It examines the current economic difficulties resulting from marked increase in oil prices since 1979, a short rise in interest rates on international lending, and sharp slowing down of growth in international trade. It then identifies the main economic issues for the 1980s. It argues that the challenge for East Asian countries during the next decade is to reduce their current account balance of payments deficits without any significant downward adjustment in growth and while ensuring continued progresss in reduction of absolute poverty. The burden of achieving these goals will fall mainly on economic management and policies. Increased efficiency in the use of economic resources especially of investment and energy resources will be central to the effort.