Professor Professor Hiroyuki Taguchi - Doctor of Social Sciences (Waseda University) commenced the seminar from a macroeconomic angle with a focus on Abenomics’ influence and the question of tackling mid-income trap in Vietnam. The seemingly dry subject was turned into a fruitful feast of novel information, ideas and well thought-out explanations.
The small and medium scale enterprises (SMEs) sector has been identified as a critical sector for
the various roles it plays in the socio-economic development of an economy. Such roles include employment
generation, bedrock of entrepreneurial development, avenue for investment and innovation, poverty reduction
and economic growth. It is also a source of forward and backward linkages to multinational corporations
(MNCs) which will engender foreign direct investment and local technological development. In Nigeria, the
SMEs are faced with many challenges which include limited access to fund; lack of capacity of managers etc.
These have undermined the growth, development and sustainability of the sector. It is in order to ameliorate
these numerous challenges that government over the years have formulated and implemented several policies
to develop, encourage and sustain SME success in Nigeria. The study is aimed at drawing important lessons
from the success stories of German Mittlestand by importing, adopting or adapting their characteristics. The
Mittlestand was chosen as a benchmark because the sector is resilient and was able to weather economic storms
during the economic meltdown than many of their competitors. Important lessons that could be learnt by
Nigeria’s SMEs include amongst others, the importance of investing in human resources through the adoption
of Germany’s dual vocational system; production of high quality goods and services; investing in research and
development; provision of after sales services; having a sound business plan that consents to business
inheritance, etc. On the part of government, the lessons that could be learnt include: provision of critical
infrastructure; creating enabling environment for small businesses; passing and enforcing the local content bill
etc
Relationship between growth, financial development and income inequality.
- Is there nonlinearity in the relationship?
- What are the factors that affect the degree of impact of financial development on income inequality?
The wave of Economic reforms appeared on India’s shores in 1991, much after china’s and other south East Asian countries such as Malaysia, Singapore and Hong Kong. Due to economic reforms, however delayed they were, Indian economy were able to brake the shackles of heavy protectionism and license raj. Economic reforms (1980s reforms and 1991 reforms) did bring out the economy from the shameful reference of so called “Hindu Growth rate” of witnessing almost stagnant 3.5% GDP growth rate. Since independence India being a country with a demographic reality which are both challenging and unique, has a perennial problem of providing employment to millions of job seekers. The other fact which is unique to India only is that service sector contribution into growth rate has risen sharply in the developing countries’ economies like India in nineties, and, therefore, have become a self propelling and dynamic sector in the accelerated growth in the economies.
This study focuses on service sector as a vector of Indian globalization. The impact of new economic reforms which acted as a catalyst for service sector is to be reviewed as they opened door for the growth rate of the country and made India a destination of FDI inflow and out flow but that increased growth rate is not translated in providing employment to the millions.
The small and medium scale enterprises (SMEs) sector has been identified as a critical sector for
the various roles it plays in the socio-economic development of an economy. Such roles include employment
generation, bedrock of entrepreneurial development, avenue for investment and innovation, poverty reduction
and economic growth. It is also a source of forward and backward linkages to multinational corporations
(MNCs) which will engender foreign direct investment and local technological development. In Nigeria, the
SMEs are faced with many challenges which include limited access to fund; lack of capacity of managers etc.
These have undermined the growth, development and sustainability of the sector. It is in order to ameliorate
these numerous challenges that government over the years have formulated and implemented several policies
to develop, encourage and sustain SME success in Nigeria. The study is aimed at drawing important lessons
from the success stories of German Mittlestand by importing, adopting or adapting their characteristics. The
Mittlestand was chosen as a benchmark because the sector is resilient and was able to weather economic storms
during the economic meltdown than many of their competitors. Important lessons that could be learnt by
Nigeria’s SMEs include amongst others, the importance of investing in human resources through the adoption
of Germany’s dual vocational system; production of high quality goods and services; investing in research and
development; provision of after sales services; having a sound business plan that consents to business
inheritance, etc. On the part of government, the lessons that could be learnt include: provision of critical
infrastructure; creating enabling environment for small businesses; passing and enforcing the local content bill
etc
Relationship between growth, financial development and income inequality.
- Is there nonlinearity in the relationship?
- What are the factors that affect the degree of impact of financial development on income inequality?
The wave of Economic reforms appeared on India’s shores in 1991, much after china’s and other south East Asian countries such as Malaysia, Singapore and Hong Kong. Due to economic reforms, however delayed they were, Indian economy were able to brake the shackles of heavy protectionism and license raj. Economic reforms (1980s reforms and 1991 reforms) did bring out the economy from the shameful reference of so called “Hindu Growth rate” of witnessing almost stagnant 3.5% GDP growth rate. Since independence India being a country with a demographic reality which are both challenging and unique, has a perennial problem of providing employment to millions of job seekers. The other fact which is unique to India only is that service sector contribution into growth rate has risen sharply in the developing countries’ economies like India in nineties, and, therefore, have become a self propelling and dynamic sector in the accelerated growth in the economies.
This study focuses on service sector as a vector of Indian globalization. The impact of new economic reforms which acted as a catalyst for service sector is to be reviewed as they opened door for the growth rate of the country and made India a destination of FDI inflow and out flow but that increased growth rate is not translated in providing employment to the millions.
Triggers to watch out for:
1. Breaking down GDP Numbers
2. Equity Valuations Update
3. Why ICICI Prudential Accrual Funds
4. Investment Philosophy
Have a detailed insight into a monthly equity and fixed income market outlook.
Read the full document to know more.
Economic theories speculate that savings generate investment which in turn creates employment opportunities that give birth to demand, prices, profit and more production expansion. This expansion if properly utilized will lead to economic growth of a country. This paper attempts to investigate the causal relationship between domestic savings, domestic investment and economic growth in Nigeria. The study uses annual time series data from 1970-2015. Augmented Dickey-Fuller unit root test, Johansen cointegration, fully modified least squares; Vector error correction model (VECM) and Granger causality test based on Toda-Yamamoto procedure were employed in this study. The results shows that all variables are integrated of order one and hence cointegrated. The study finds domestic investment as having positive and significant impact on economic growth in Nigeria in the long-run. The economic impacts of domestic saving and investment on economic growth in the short-run are found to be low, permanent and long lasting. The VECM model has identified a sizeable speed of adjustment by 68.78% for correcting disequilibrium annually for achieving long term equilibrium steady state position. The Granger causality test result shows statistical evidence of bidirectional causality between domestic investment and economic growth and bidirectional causality between domestic savings and domestic investment in the short-run. However, there is no short-run Granger causality between domestic savings and economic growth. The study recommends that promoting investment for higher economic growth is a better policy strategy for Nigeria. Enhancing investment growth through savings is also a policy option suitable for short-run to long-run as evidenced by this study.
Alejandro Werner - Latin America and the Caribbean
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O evento abordou a questão das perspectivas latinoamericanas diante das mudanças impostas, entre outros fatores, pela desaceleração da China e pela gradual normalização da política monetária dos EUA.
O encontro foi organizado em três painéis, que incluiram desde estudos de casos nacionais — Argentina, Brasil, Chile, Colômbia e México — a apresentações mais abrangentes da economia da região como um todo ou parte dela.
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Dr. Alejandro Díaz-Bautista
Professor of Economics and Researcher at
El Colegio de la Frontera Norte (COLEF)
Profesor Investigador del Colef. Miembro del SNI Conacyt.
adiazbau@hotmail.com
Prepared for the Conference at the Faculty of Economics, University of Colima, April 29-30, 2010. Colima, Colima, Mexico.
Preparado para la Conferencia en la Facultad de Economía de la Universidad de Colima, para los estudios en Cuenca del Pacífico en la Universidad de Colima, los días 29 y 30 de abril de 2010.
Financial sector has always been potential ingredient in bringing growth in an economy, the indirect impact of
financial markets and institutions through saving mobilization and credit expansion is of extraordinary importance.
By employing Autoregressive Distributed Lags (ARDL) approach impact of financial sector on economic growth of
Tanzania is examined. The results show that, in both long-run and short-run, financial development exerts significant
but negative effect on economic growth contrary to our expectations. The study employs the ratio of broad money to
GDP (financial depth) as a proxy measure of financial development, along with inflation rate, real interest rate, real
exchange rate, share on of investment to GDP, proportion of development expenditure to total expenditure and
dummy for structural reforms as control variables during our estimations. Results also suggest non-existence of
causality between financial development and economic growth. Thus the study suggests strengthening data
availability on flow of credit from financial institution to the public is necessary to materialize the effect of financial
sector in Tanzania
Wald Test Analysis of the Impact of Nigerian Stock Market on Economic Growthpaperpublications3
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This paper discusses the Irish economy’s recent growth performance and considers its medium-and-long-term prospects for growth. A range of policy reforms to increase the economy’s long-run potential output are identified. The best way to sustain productivity growth is to increase investment in education and skills, particularly early years learning; to increase investment in the production, diffusion and use of new ideas, and to increase investment in productivity enhancing infrastructure.
Publication: RITES Journal July 2014
Organization: Rail India Technical and Economic Service (RITES)
Source: www.rites.com
Date: July 2014
Summary: RITES Ltd., Government of India Enterprise was established in 1974, under the aegis of Indian Railways. It publishes an annual journal and discusses topics of contemporary significance.
Note: Please visit www.compad.in for more information
The study examines the factors underlying the jobless and wageless recovery in the Nigerian
economy. The study administered questionnaire to elicit information in randomly selected states in the six geopolitical
zones namely: Abuja, Bauchi,
Triggers to watch out for:
1. Breaking down GDP Numbers
2. Equity Valuations Update
3. Why ICICI Prudential Accrual Funds
4. Investment Philosophy
Have a detailed insight into a monthly equity and fixed income market outlook.
Read the full document to know more.
Economic theories speculate that savings generate investment which in turn creates employment opportunities that give birth to demand, prices, profit and more production expansion. This expansion if properly utilized will lead to economic growth of a country. This paper attempts to investigate the causal relationship between domestic savings, domestic investment and economic growth in Nigeria. The study uses annual time series data from 1970-2015. Augmented Dickey-Fuller unit root test, Johansen cointegration, fully modified least squares; Vector error correction model (VECM) and Granger causality test based on Toda-Yamamoto procedure were employed in this study. The results shows that all variables are integrated of order one and hence cointegrated. The study finds domestic investment as having positive and significant impact on economic growth in Nigeria in the long-run. The economic impacts of domestic saving and investment on economic growth in the short-run are found to be low, permanent and long lasting. The VECM model has identified a sizeable speed of adjustment by 68.78% for correcting disequilibrium annually for achieving long term equilibrium steady state position. The Granger causality test result shows statistical evidence of bidirectional causality between domestic investment and economic growth and bidirectional causality between domestic savings and domestic investment in the short-run. However, there is no short-run Granger causality between domestic savings and economic growth. The study recommends that promoting investment for higher economic growth is a better policy strategy for Nigeria. Enhancing investment growth through savings is also a policy option suitable for short-run to long-run as evidenced by this study.
Alejandro Werner - Latin America and the Caribbean
O Instituto Brasileiro de Economia (IBRE), da Fundação Getulio Vargas (FGV), realizou, no dia 19 de setembro de 2014, o seminário internacional A América Latina e as Novas Condições Econômicas Mundiais.
O evento abordou a questão das perspectivas latinoamericanas diante das mudanças impostas, entre outros fatores, pela desaceleração da China e pela gradual normalização da política monetária dos EUA.
O encontro foi organizado em três painéis, que incluiram desde estudos de casos nacionais — Argentina, Brasil, Chile, Colômbia e México — a apresentações mais abrangentes da economia da região como um todo ou parte dela.
Confira as fotos do evento e mais informações no site do FGV/IBRE: http://bit.ly/YdyhyL
Dr. Alejandro Diaz-Bautista, Korea Mexico Economy Presentation, University of...Economist
“Competitiveness and Economic Growth. An Analysis of Mexico and Korea.” Crecimiento Económico y Competitividad. Un Análisis de México y Corea.
Dr. Alejandro Díaz-Bautista
Professor of Economics and Researcher at
El Colegio de la Frontera Norte (COLEF)
Profesor Investigador del Colef. Miembro del SNI Conacyt.
adiazbau@hotmail.com
Prepared for the Conference at the Faculty of Economics, University of Colima, April 29-30, 2010. Colima, Colima, Mexico.
Preparado para la Conferencia en la Facultad de Economía de la Universidad de Colima, para los estudios en Cuenca del Pacífico en la Universidad de Colima, los días 29 y 30 de abril de 2010.
Financial sector has always been potential ingredient in bringing growth in an economy, the indirect impact of
financial markets and institutions through saving mobilization and credit expansion is of extraordinary importance.
By employing Autoregressive Distributed Lags (ARDL) approach impact of financial sector on economic growth of
Tanzania is examined. The results show that, in both long-run and short-run, financial development exerts significant
but negative effect on economic growth contrary to our expectations. The study employs the ratio of broad money to
GDP (financial depth) as a proxy measure of financial development, along with inflation rate, real interest rate, real
exchange rate, share on of investment to GDP, proportion of development expenditure to total expenditure and
dummy for structural reforms as control variables during our estimations. Results also suggest non-existence of
causality between financial development and economic growth. Thus the study suggests strengthening data
availability on flow of credit from financial institution to the public is necessary to materialize the effect of financial
sector in Tanzania
Wald Test Analysis of the Impact of Nigerian Stock Market on Economic Growthpaperpublications3
Abstract: The increased level of participation of the private and public investors at the floor of the stock exchange and in various public offers of quoted companies shows the trend of transformation of the Nigerian stock market over the years and this has attracted and embraced the attention and interest of international investors causing an increase in capital inflow into the country but does this enhance Nigeria’s economic growth? This paper therefore examines the impact of Nigerian stock market on the country’s economic growth between 1981 and 2013 using Wald test analysis and Linear multiple regression (OLS) techniques. The economic growth was proxied by Gross Domestic Product (GDP) while various stock market variables such as market capitalization, Total New Issues Volume of Transaction and total listed equities and government stock were considered. The result obtained in this finding shows that stock market has positive and significant impact on economic growth in Nigeria for a sustainable and improved growth. Some policy recommendation were made among which are the slacking of trading impediments, encouragement of more private limited liability companies and informal sector operators to access stock market for fresh capital among others.
This paper discusses the Irish economy’s recent growth performance and considers its medium-and-long-term prospects for growth. A range of policy reforms to increase the economy’s long-run potential output are identified. The best way to sustain productivity growth is to increase investment in education and skills, particularly early years learning; to increase investment in the production, diffusion and use of new ideas, and to increase investment in productivity enhancing infrastructure.
Publication: RITES Journal July 2014
Organization: Rail India Technical and Economic Service (RITES)
Source: www.rites.com
Date: July 2014
Summary: RITES Ltd., Government of India Enterprise was established in 1974, under the aegis of Indian Railways. It publishes an annual journal and discusses topics of contemporary significance.
Note: Please visit www.compad.in for more information
The study examines the factors underlying the jobless and wageless recovery in the Nigerian
economy. The study administered questionnaire to elicit information in randomly selected states in the six geopolitical
zones namely: Abuja, Bauchi,
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This study focuses on service sector as a vector of Indian globalization. The impact of new economic reforms which acted as a catalyst for service sector is to be reviewed as they opened door for the growth rate of the country and made India a destination of FDI inflow and out flow but that increased growth rate is not translated in providing employment to the millions.
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1. Secret of Japanese Economy
- Macroeconomic Issues in Japan & Vietnam –
March 2015
Hiroyuki Taguchi
Issues to be discussed
Where is Japanese economy going by “Abenomics”?
How to avoid “middle income trap” in Vietnam
2. Economic Position of Japan
in the World Ranking (189 countries)
Population (million, share%, 2013)
GDP per capita (US$, 2013)
GDP (trillion US$, share%, 2013)
No.1 China
1,360 (19.4)
No.2 India
1,243 (17.7)
No.3 United States
316 (4.5)
No.10 Japan
127 (1.8)
No.1 Luxembourg
112,473
No.2 Norway
100,579
No.3 Qatar
98,986
No.24 Japan
38.468
No.1 United States
16.8 (22.4)
No.2 China
9.5 (12.7)
No.3 Japan
4.9 (6.6)
IMF World Economic Outlook Database, October 2014
7. Fisher Equation: 𝑟 = 𝑖 − 𝜋 𝑒
real interest rate nominal interest rate expected inflation
Rate
0
negative
Nominal
Interest
Rate
Expected
Inflation
Real
Interest
Rate
7
Deflation “Liquidity Trap”, Increase in Real
Interest Rate, Deflation Spiral
8. Abenomics (Dec. 2012 –): Three Arrows
Time
GDP
Growth Strategy
for revitalizing economy:
towards 2% growth trend over the upcoming decade
Fiscal & Monetary Policy
for ending “Deflation”:
towards 2% inflation within 2 years
9. Fiscal & Monetary Policies
Fiscal Policy:
- Economic Stimulus Packages on Jan. & Dec. 2013 and
Dec. 2014 for revitalizing SMEs and regions
Monetary Policy (Unconventional):
- Quantitative Easing – more than double “monetary
base” raising inflationary expectations
- Qualitative Easing – portfolio rebalances
Progress:
- Yen depreciation, upturn in stock prices & firm profits
- Inflation: around 1% (FY2014, est., excluding consumption-tax effect)
- GDP growth: -0.5% (FY2014, est.) consumption-tax effect
10. Fiscal Problem in Japan
Ministry of Finance
Japan
Greece
Portugal
Spain
Huge Government Gross Debt
relative to GDP in 2014 (%)
Government Bond Holders
Domestic Share (%)
231.9
191.6
137.9
104.8
95
29
14
57
Fiscal Consolidation Plan: To Make Primary Balance Surplus by 2020
11. Growth Strategy
To Enhance Productivity in Domestic Market
- Create “National Strategic Special Zones” for Deregulation
- Reduce Effective Corporate Tax (34.6% 2X%)
- Reform Agricultural Sector by Farmland Consolidation and
Deregulating Agricultural business
- Reform Electricity System by Unbundling Generators and
Distributors
- Reform Health Care System by Promoting the Use of
Generic Medicine, etc.
To Earn in Overseas Markets
- Raise FTA Trade Ratio from 19% to 70% by 2018 through
Facilitating TPP, RCEP, etc.
- Supporting Overseas Activities of Japanese Companies
12. International Comparison of Effective Corporate Tax
34.6%
Japan California France Germany China Korea U.K. Singapore
(U.S.)
40.8
%
33.3
% 29.6
%
25.0
%
24.2
% 23.0
%
17.0
%
Ministry of Finance
2X %
12
Example: Reduction of Effective Corporate Tax
13. -20.0
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
20.0
25.0
30.0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
tril. yen
Goods & Services Balance Income Balance Current Balance
181 215
250 226
268 256 265 296 325
0
100
200
300
400
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
tril. yen Net Foreign Assets
Earning in Overseas Markets
External Balance in Japan
Income Balance is in Surplus though Trade balance is in deficit
Ministry of Finance
13
14. Asian Economies
Branch
Factories in
B Country
Headquarter of
Japanese Firm in Japan
Factories in A
Country
14
Repatriation of Profits
remitted earnings of
subsidiary
Earning though Global Value Chains
Win-win Relationship
15. Economic Integration of Japan with ASEAN
Intra-Trade Ratio in 2010
= Intra-Trade / Trade with the World
Japan-ASEAN
27%
ASEAN+6
(Japan, China, Korea, Australia, New Zealand, India)
45%
Japan-US
8%
UN Comtrade
16. 1820 1950 2010 2050 2050
Asian Century
Middle
Income Trap
ADB Scenarios
Asia
59%
Europe
32%
Others
Asia
15%
North
America
23%
Europe
52%
Others
Asia
31%
North
America
25%
Europe
34%
Others
Asia
51%
China 22%
India 14%
N.America
15%
Europe
18%
Others
Asia
32%
North
America
23%
Europe
26%
Others
16
Asian Century or Middle Income Trap?
% Share to the World GDP
Scenarios: ADB (2011), Actual data: Suehiro (2014)
17. 1960s 1970s 1980s 1990s 2000s 2010s
High Income
Upper Middle Income
Lower Middle Income
Low Income
$ 12,746
$ 4,125
$ 1,045
Japan 1967 Korea 1994
Argentina
Malaysia 1991 → 2020
Thailand 1966 → 2010 → 2031
China 1998 → 2010 → 2026
Vietnam 2008 → 2058
17
Where are Middle-Income Economies going?
Income Classifications are based on World Bank (2014a) and Suehiro (2014).
The year in red shows the year when an economy will reach “High Income”, estimated by OECD (2013).
$1,740 (2013)
18. “Aged” means “over 65 years old”. When the ratio of the aged persons exceed 7%, 14% and 21%, the
society is called “Aging Society”, “Aged Society” and “Ultra-Aged Society”, respectively. UN (2010).
Japan
Korea
China
Thailand
Vietnam
Malaysia
India
Projections
1960s 1970s 1980s 1990s 2000s 2010s 2020s 2030s 2040s 2050s 2060s-
1970 1995 2008
1999 2017 2027
2000 2025 2037
2001 2024 2038
2018 2033 2047
2020 2046 2073
2024 2052 2076
Aging Society>7% Aged Society>14% Ultra-Aged Society>21%
Aging & Aged in Asia
19. 19
Period of Demographic Dividend in Asia
Japan
Korea
China
Thailand
Vietnam
Malaysia
India
Projections
1940s 1950s 1960s 1970s 1980s 1990s 2000s 2010s 2020s 2030s 2040s
1932 <60> 1992
1965 <48> 2013
1966 <48> 2014
1969 <46> 2015
1967 <46> 2014
1964 <57> 2021
1964 <74> 2040
The “Demographic Dividend” is defined as the period in which the year-on-year change rate of the ratio of
working-age population (15-64 years old) is positive. The figures in the arrow show starting year, period,
ending year respectively. Suehiro (2014).
20. 20
How to Avoid “Middle Income Trap”
Middle Income Trap:
Factor (Labor & Capital) -driven Growth
Diminishing Returns Inability to Compete with
Low-Income and High-Income Economies
How to Avoid Middle Income Trap:
Productivity (TFP) -driven Growth
Technology & Innovation; Industrial Upgrading;
Human Resource Development; Infrastructure;
Institution, etc. --- Global Value Chains through FDI
Gill & Kharas (2007), ADB (2011), OECD (2013), Suehiro (2014)
Aging Society in Asian Economies
21. Growth Accounting in Asian Economies
China
Korea
Malaysia
Vietnam
Thailand
India
Japan
TFP Contribution
Capital
Contribution
Labor
Contribution
3.1 4.5 1.0 8.7
Annual Growth Rate
in 1970-2012
1.6 4.1 1.0 6.7
0.5 4.4 1.4 6.3
1.7 2.3 1.7 5.7
1.9 2.4 1.3 5.6
1.4 2.4 1.5 5.3
0.7 2.0 2.7
APO (2014)
22. 22
For Participating in Global Value Chains ---
“Fragmentation” Theory:
Lower Factor Prices (e.g. Lower wages) + Lower Service-link
Costs (e.g. Logistics) Accept GVCs
Jones and Kierzkowski (2005), World Bank (2014b), and World Bank (2014c).
GNI per capita 2013
<USD>
Logistics Performance Index 2014
<Ranking among 160 Countries>
Singapore 54,040 5
Malaysia 10,430 25
China 6,560 28
Thailand 5,340 35
Indonesia 3,580 53
Philippines 3,270 57
Vietnam 1,740 48
India 1,570 54
Lao PDR 1,450 131
Myanmar 1,113 145
Cambodia 950 83
25. 25
Issues: Industrial Upgrading in GVCs
Need to Raise Local Value Embedded in Exports
Source: OECD-WTO TiVA Database and IMF WEO Data for per capita GDP, Taguchi (2014)
26. 26
GVCs along with “Economic Corridors”
Three Economic Corridors in
Greater Mekong Sub-region
North-South Corridor
East-West Corridor
Southern Corridor
27. 27
Income Distribution among Asian Economies
Convergence: Less Developed Countries Grow Faster
IMF World Economic Outlook Database, October 2014
GDP per capita
2000, $
Japan 37,304
Singapore 23,793
Brunei 18,477
Korea 11,948
Malaysia 3,992
Thailand 1,983
Philippines 1,055
China 941
Indonesia 800
India 463
Vietnam 402
Cambodia 299
Lao PDR 292
Myanmar 222
Real GDP Growth Rate in 2000-2013, Annual %
0.8
5.4
1.2
4.1
4.7
4.0
5.0
10.0
5.4
6.5
7.8
7.3
9.6
7.0
28. 28
Is the Kuznets Curve still Valid?
Industrial transition from agriculture to manufacturing / urban
sector increases inequality Shrinking agriculture sector reduces
inequality, trickle-down effect (Kuznets 1955) Evidence by
Barro (2008) with a turning point being 3,050 US$
Technical progress and globalization has recently increased
inequality based on skill & knowledge (ADB 2012; Palma 2011;
Piketty 2013)
?
Income Distribution among Asian People
Inequality has enlarged recently
29. 29
Poverty Headcount Ratio --- Decline
<at $2 a day (PPP) (% of population)>
World Bank Indicators
0
20
40
60
80
100
120
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Malaysia Thailand China Vietnam Philippines Indonesia India
30. 30
Quintile Ratios --- Mixed Outcomes
<the ratio of the per capita expenditure of the top 20% to that of the bottom 20%>
0
2
4
6
8
10
12
Malaysia China Thailand Indonesia Philippines Vietnam India
11.4
5.1
8.8
4.1
8.6
5.6
4.8
11.3
9.6
7.1
6.6
8.3
5.9 5.7
1990s 2000s
ADB (2012)
31. 31
Role of Japan for Asian Economies
Asian Economies
Productivity
Aging
Society
Income
Inequality
Middle
Classes
Environment
Depopulation
Japan’s Role
Strengthen GVCs =
Technological Transfer
Export Infrastructure
Sharing Lessons of Aging,
Environment, etc.
Invest in Soft Industries
such as “Contents”
32. References
ADB 2011. ASIA 2050: Realizing the Asian Century.
ADB 2012. Asian Development Outlook 2012: Confronting Rising Inequality in Asia.
APO (Asian Productivity Organization) 2014. APO Productivity Databook 2014.
Barro, R. 2008. Inequality and Growth Revisited. Working Paper Series on Regional Economic
Integration No.11, ADB.
Gill, I. & Kharas, H. 2007. An East Asian Renaissance: Ideas for Economic Growth, World Bank.
Jones, R.W. and Kierzkowski, H. 2005. International Trade and Agglomeration: An Alternative
Framework. Journal of Economics, 10(S1), 1-16.
Kuznets, S. 1955. Economic Growth and Income Inequality, American Economic Review, 65:1-29.
OECD 2013. Economic Outlook for Southeast Asia, China and India 2014: Beyond the Middle-Income
Trap, OECD Publishing.
Palma, J.G. 2011. Homogeneous Middles vs. Heterogeneous Tails, and the End of the ‘Inverted-U’: The
Share of the Rich is What It’s All About. Cambridge Working Papers in Economics (CWPE) No.1111.
Piketty, T. 2013. Capital in the Twenty-First Century. Éditions du Seuil, Harvard University Press .
Suehiro, A. 2014. Emerging Asian Economy, Iwanami (Japanese).
Taguchi, H. 2014. Dynamic Impacts of Global Value Chains Participation on Asian Developing
Economies, Foreign Trade Review, 2014, 49(4):1-14.
UN (United Nations) 2010. World Population Prospects: The 2010 Revision.
World Bank 2014a. Updated Income Classifications. See the site below.
http://data.worldbank.org/news/2015-country-classifications.
World Bank 2014b. Indicators. See http://data.worldbank.org/indicator.
World Bank 2014c. Connecting to Compete 2014 - Trade Logistics in the Global Economy - The
Logistics Performance Index and Its Indicators.
For “Abenomics”, see http://japan.kantei.go.jp/ongoingtopics/abenomics.html. 32