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By John West. Posted March 23, 2012
East Asia’s substantially market-led economic integration is a very complex process and is leading to some surprising effects. One example is that of Australia’s booming trade and investment with the People’s Republic of China (PRC), which is pushing up the value of the Australian dollar, and consequently enticing Australian companies to outsource business processing services to the Philippines. Over the past decade, Australia has enjoyed one of the best economic performances of any OECD country. While many structural reforms over the past few decades and sound macroeconomic management have underpinned this, Australia’s closer relationship with the PRC has also played a major role.
By Tommy Koh. Posted March 18, 2012
Eighteen years ago, the World Bank published a landmark book, The East Asian Miracle. The report praised eight Asian economies for their rapid and sustained economic progress and highlighted the fact that they seemed to have evolved a model which combined growth with equity. What is the situation today? Today we have growth, but with much less equity. All our societies have grown more unequal, as measured by the gini coefficient and the ratio of average incomes of the top 20% and the bottom 20%. According to the World Bank’s latest statistics, the gini coefficient for Singapore was 0.48 in 2010. In the case of the People’s Republic of China (PRC), the gini coefficient has risen from around 0.30 in the early 1980s to around 0.47 in 2009. Some social scientists have warned that inequality which exceeds the gini coefficient of 0.4 could lead to social unrest. Even without social unrest, great inequality is a threat to social cohesion and harmony. The current trend in Asia is fundamentally objectionable because it is inconsistent with the very purpose of development which is to benefit all citizens. ADB is, therefore, right to make inclusive growth one of its three agendas in its Strategy 2020 document.
The services sector is becoming increasingly important in modern economies. In many of the most developed economies, it can represent two–thirds or even three–quarters of all economic activity. Even in developing economies, the services sector often accounts for a significant share of economic output and employment. International trade in services is also increasing in importance, and has been growing more rapidly than goods trade over recent years. It has also proven to be more resilient to the global financial crisis and resulting trade collapse. It has long been recognized that services trade can influence economic and social outcomes through a variety of mechanisms.
By Stephen Groff. Posted March 1, 2012
The current macroeconomic environment is far more unpredictable and difficult than just a few years ago. Asia’s central banks must evolve in order to adapt to this new landscape. Usually, a central bank’s role is to keep inflation low and stable. But with recent upheavals and financial market turmoil, they have also been charged with maintaining financial stability. To do this, central banks must increasingly work together and coordinate with other authorities. Such coordination—central to the region’s successful navigation of the 2008–2009 global financial crisis— does have implications for central bank objectivity. Central banks do not want to lose their often hard-won independence—an important factor in their operational effectiveness.
By Deborah Brautigam. Posted February 27, 2012
Concerns have been expressed in the Western media that Chinese aid to Africa represents a form of “new colonialism.” However, comparing Chinese and US health programs in Africa suggests that the two have more in common than might be expected. Both countries’ health efforts in the region share similarities in terms of objectives, priorities and challenges. Foreign aid from the PRC and the US is provided not only as development assistance but also as a tool of soft power. Both the PRC and the US shape some of their health efforts to boost friendship and goodwill across Africa. Public opinion polls suggest that both countries are generally viewed positively by Africans.
By David I. Steinberg. Posted February 21, 2012
The remarkable, surprising, and extensive reformist policies of the new Republic of the Union of Myanmar have sparked interest throughout the international community. As one of the world’s last bastions of both relative isolation and new opportunities, Myanmar has recently become a magnet to which many are drawn. Governments, international non-profit organizations, and businesses are exploring what they might do in a state marred by intense poverty but possessing abundant natural resources. With a literate and diverse population and a myriad of business opportunities, Myanmar entices with many diverse possibilities for rapid growth and social equity. Hotels are filling up with tourists who now feel more comfortable going to that once exotic land, and embassies may well expand staffs to handle more foreign assistance. Many more international NGOs will join the fifty or so already there, and those that are well established may increase staffs as needs become more visible and access increases.
By Stefan Collignon. Posted February 13, 2012
The crisis in the eurozone is critically important for Asia. At a distinguished speaker seminar at ADBI on 1 December 2011, three eminent European economists examined the crisis and put forward tentative solutions. In this post based on the seminar transcripts, Stefan Collignon outlines his hopes and fears for the single currency. We are in the midst of a very severe crisis. It is not clear that the euro will survive, and if the euro does not survive then the European Union will not survive, and if the EU does not survive than I am not sure how much longer we will have peace in Europe.
By Charles Wyplosz. Posted February 10, 2012
The crisis in the eurozone is critically important for Asia. At a distinguished speaker seminar at ADBI on 1 December 2011, three eminent European economists examined the crisis and put forward tentative solutions. In a post based on the seminar transcripts, one of the speakers, Charles Wyplosz, identifies some of the mistakes that have been made in the response to the crisis and puts forward three scenarios for its resolution. Since late 2009 the European debt crisis has worsened because of the wrong policy responses by European politicians. Some progress has been made but we are not yet there. We have a historic disaster with global implications on the way and unless a miracle happens I am pretty pessimistic about the future.
By Gloria Pasadilla. Posted February 6, 2012
The movement of workers within the ASEAN region has been on the rise over the last two decades. In Malaysia, for example, the number of foreign workers grew from less than 250,000 in 1990 to more than 2 million in 2007, about 67% of whom come from ASEAN countries. Singapore, Brunei Darussalam and Thailand have become major labor recipients, while the other ASEAN countries are labor senders (Figure 1). However, the ease of labor flows within ASEAN is not matched by the portability of migrants’ social security benefits. Some hosting countries have nationality conditions or minimum residency requirements that prevent migrants from participating in social security schemes.
By Yuqing Xing. Posted February 1, 2012
On 11 December 2011 the People’s Republic of China (PRC) marked the 10th anniversary of its entry into the World Trade Organization. The PRC’s trade statistics over the past decade have been impressive: despite the fragile global recovery, its exports surged 31% to reach $1.6 trillion in 2010, more than six times the value in 2000. For the first time, the PRC overtook Germany to become the world’s largest exporter. The PRC’s high-tech exports were valued at $490 billion and accounted for 31% of its total exports in 2010. A report from European Commission in 2009 concluded that the PRC had surpassed the United States, Japan and the 27 states of the European Union to emerge as the world’s largest high-tech exporter. According to statistics from the US Department of Commerce, in 2010 the PRC even ran a $94 billion surplus in advanced technology products to the US, an undisputed world leader in technology innovation.
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