- Middle-income Asian economies face risks of experiencing a sustained slowdown in economic growth, falling into what is known as the "middle-income trap".
- Empirical analysis finds the probability of a marked, decade-long fall in growth is about 1.5 times higher for middle-income economies than for advanced or low-income countries.
- However, whether a country experiences a slowdown depends on the quality of its policies, institutions, and structural features like trade openness and infrastructure development. Strengthening these areas can help middle-income Asian economies avoid falling into the trap.
This document discusses fiscal policy challenges and opportunities in Latin America given recent economic slowdowns. It notes that while public education spending has increased to OECD levels, challenges around quality and equity remain. Infrastructure investment has been historically low across much of Latin America. Some countries like Chile and Colombia have seen private investment offset declines in public funding, while countries like Argentina, Brazil and Mexico drive lower regional trends. The document advocates for sector-specific skill development and policies to formalize labor markets and reduce informality, particularly among middle-income workers, in order to boost productivity.
Boosting private investment for growth and competitiveness in Argentina. A view from the OECD
OECD EMnet Business Meeting on Latin America
Buenos Aires, 14 November 2017
This document summarizes a project on youth inclusion between the EU and OECD. It identifies key challenges facing youth globally, such as high unemployment, skills mismatches, and lack of participation in decision-making. The project aims to support countries in developing evidence-based youth policies and increasing youth involvement in national development. It will work with 10 selected countries in different regions to develop tools and country studies on youth well-being and policies. The project expects to produce national action plans and recommendations to better promote youth inclusion through international cooperation.
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?
Apresentação em inglês, do diretor do Centro de Desenvolvimento da OCDE, Mario Pezzini, sobre as perspectivas de desenvolvimento global 2013 e velocidade das políticas industriais num mundo em mudança. Apresentação mostrada na “Conferência Internacional sobre Sustentabilidade e Promoção da Classe Média”, ocorrida em 25 de setembro de 2013. Veja mais na matéria: http://ow.ly/poL9G
This document discusses fiscal policy challenges and opportunities in Latin America given recent economic slowdowns. It notes that while public education spending has increased to OECD levels, challenges around quality and equity remain. Infrastructure investment has been historically low across much of Latin America. Some countries like Chile and Colombia have seen private investment offset declines in public funding, while countries like Argentina, Brazil and Mexico drive lower regional trends. The document advocates for sector-specific skill development and policies to formalize labor markets and reduce informality, particularly among middle-income workers, in order to boost productivity.
Boosting private investment for growth and competitiveness in Argentina. A view from the OECD
OECD EMnet Business Meeting on Latin America
Buenos Aires, 14 November 2017
This document summarizes a project on youth inclusion between the EU and OECD. It identifies key challenges facing youth globally, such as high unemployment, skills mismatches, and lack of participation in decision-making. The project aims to support countries in developing evidence-based youth policies and increasing youth involvement in national development. It will work with 10 selected countries in different regions to develop tools and country studies on youth well-being and policies. The project expects to produce national action plans and recommendations to better promote youth inclusion through international cooperation.
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?
Apresentação em inglês, do diretor do Centro de Desenvolvimento da OCDE, Mario Pezzini, sobre as perspectivas de desenvolvimento global 2013 e velocidade das políticas industriais num mundo em mudança. Apresentação mostrada na “Conferência Internacional sobre Sustentabilidade e Promoção da Classe Média”, ocorrida em 25 de setembro de 2013. Veja mais na matéria: http://ow.ly/poL9G
Economic and policy implications of greater global integration OECD Economic ...OECD, Economics Department
The document discusses how economic integration has increased globally since the 1990s through greater trade, financial, and supply chain links. While this has boosted living standards, it has also amplified the transmission of external shocks across borders. As a result, domestic policies need to take more account of external factors, and collective, multilateral policy responses are important to address common challenges and mitigate spillover risks from external shocks. Strengthening domestic resilience and maintaining open, rules-based international cooperation are also key to managing the implications of deepening global integration.
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
Peru's economic freedom score is 68.6, making its economy the 41st freest globally. This is an improvement of 1 point from the previous year. Peru ranks 5th out of 29 countries in South and Central America, with a score above regional and world averages. Despite challenges, Peru has achieved around 7% annual growth over 5 years through business reforms and trade agreements. Weaknesses include inadequate protection of property rights and corruption.
Medef - La France peut-elle retrouver le chemin d'une croissance forte ?Lionel Sanchez ✔
- The document discusses the challenges posed by secular stagnation and the need for stronger policy action to escape the low-growth trap. It notes that exceptionally low interest rates create both financial distortions and opportunities for fiscal initiatives.
- To boost growth, the document argues for targeted structural reforms combined with collective fiscal initiatives focused on quality investment in infrastructure and human capital. Maintaining open markets through domestic policies that support workers is also key.
- Escaping the low-growth trap requires weaving together fiscal, structural, and trade policies to strengthen both short-term and long-term growth in an inclusive manner.
China - A Country in Transition to a New Normaltutor2u
This is a revision presentation on key developments in the Chinese economy - designed for A level economics students preparing for their exams in June 2016
The OECD Economic Outlook report finds that while global growth is expected to modestly pick up, it remains below historical norms. Productivity and wage growth have been subdued and financial stability risks persist. More needs to be done to ensure the benefits of structural trends like technology and trade are shared by all. An integrated policy approach is needed, including making the international system more equitable, implementing domestic reforms, and helping displaced workers adapt to new opportunities.
The document analyzes recent economic developments in South Africa. It finds that the South African economy has been slowing and falling behind its emerging market peers in growth rates. Political tensions have also risen under President Jacob Zuma, which has weakened the ruling ANC party's popularity. The rand and bonds have underperformed while the stock market has performed better. South Africa faces challenges of high unemployment, deficits, and reliance on mining while also benefitting from its human capital and infrastructure compared to other African nations.
Even if the economic outlook for Latin America shows a relatively positive picture for the coming years it is important to know that the General Regional Economic Forecast was trimmed from 4.2% to a 3.9%, by the FMI.
Crecimiento y convergencia de la economia de nicaragua desde el modelo de solowMaria FJ
This document analyzes the economic growth of Nicaragua from 1994-2017 using the Solow-Swan model of economic growth. It summarizes the economic history and evolution of Nicaragua, provides an overview of the Solow growth model, and outlines the methodology used to estimate the model for Nicaragua. The results suggest the Solow model fits the data reasonably well. However, the model cannot fully explain Nicaragua's economic growth as parameters change over time and it does not account for technological change.
This document provides an analysis report on Brazil submitted by students to their professor. It includes an acknowledgment, table of contents, and sections on Brazil's introduction, background, inflationary conditions, growth rate, current account, and macroeconomic overview. Some key points are that Brazil has the 10th largest economy in the world, experienced GDP growth of 2.2% in 2013 but contraction of 0.5% in Q3 2013, had an inflation rate of 5.91% in December 2013 with food and transport prices rising the most, and recorded a current account deficit of $8.68 billion in December 2013.
Global growth has returned to pre-crisis levels, but reforms have been modest. While some countries took significant steps to promote business and boost skills/innovation, progress on education was limited. Reforms helped workers cope with changing jobs but intensity varied across areas. Coherent multi-dimensional reforms across firms, skills, and workers could maximize synergies and share benefits broadly over time.
According to Luiz de Mello, Deputy Head of Staff of the Organisation for Economic Co-operation and Development, Latin America has gone a long way in improving economic performance and fostering social development. Some countries have done better than others, depending on their specific conditions and policy settings. Where reforms have been made to strengthen the public finances, build human capital and improve the business environment, increased prosperity has been accompanied by a better distribution of the benefits of growth. But the continent also faces common challenges. Further improvements in education, skills and the investment climate will be essential for enhancing the region’s economic growth prospects and building more resilient, innovative societies.
Dr Dev Kambhampati | Doing Business in Malawi - 2013 Country Commercial Guide...Dr Dev Kambhampati
This document provides an overview and guide for doing business in Malawi, including:
- Malawi has a population of over 15 million and an economy based primarily on agriculture, with tobacco, tea, and sugar as major exports.
- Opportunities exist in agricultural equipment, used vehicles, and telecom equipment, while challenges include poor infrastructure, high costs, and bureaucracy.
- The guide covers topics such as finding agents, establishing an office, selling to the government, intellectual property protection, and provides resources for researching the market.
The document analyzes the political, economic, social, and technological (PEST) factors affecting Latin America in 2012. It finds that while the region faces challenges like weak institutions and infrastructure, overall economic growth is relatively positive at 4.1% due to stability and emerging markets. The largest economies like Brazil, Mexico, Chile, and Colombia are leading growth, while countries such as Venezuela and Argentina face greater economic and political instability. Innovation and addressing weaknesses will be important for the region to sustain its progress.
Brazilian Scenario - Trends and Challenges to keep IT investmentsCisco do Brasil
The document discusses trends and challenges facing IT investments in Brazil. It notes Brazil experienced a "macroeconomic rollercoaster" in the past 7 years, with high expectations giving way to weak economic growth. Key issues include falling commodity prices, a weakening currency, high inflation and interest rates, and reduced consumption and investments. Digital transformation opportunities exist but the economic outlook remains challenging without policy and economic reforms.
Chile is seen as the best country in Latin America for setting up banking business due to its strong democracy, low political risk, and good economic policies. The Chilean economy is open and resilient, though exposed to external shocks, and has a low unemployment rate. In 2015, China established an offshore yuan clearing network in Chile, the first in Latin America, following a currency swap agreement between the two countries. Some Chinese banks like China Construction Bank and Bank of China already have a presence in Chile, showing opportunities for further business development.
The document is a newsletter from STANLIB, an investment management company. It discusses various topics related to the South African and global economic and investment environment.
The main article analyzes five options for growing South Africa's economy in the current challenging conditions: 1) Increasing government spending, but debt levels are already high; 2) Private business expansion and new ventures, but confidence is low; 3) Increasing exports, but world trade growth is slow; 4) Boosting household consumption, but job losses are a risk; 5) Public-private partnerships to develop infrastructure, which could attract private funding and ease the government's budget. None of the options on their own are seen as sufficient to meaningfully lift growth
This document analyzes Brazil's standing as an investment destination by evaluating its progress in basic requirements, efficiency enhancers, and technological readiness. Regarding basic healthcare and education requirements, Brazil has a two-tiered public and private healthcare system and has experienced improvements in health indicators like life expectancy and reduced infant mortality in recent decades. However, poor health still reduces worker productivity and earnings. Overall the analysis evaluates where Brazil excels and needs improvement across various factors important for competitiveness.
The world of shipping and trade has changed dramatically in the last 10 years and continues to evolve. Large port infrastructure investments require proper planning, which is possible even in shifting markets.
The document discusses the benefits of exercise for mental health. Regular physical activity can help reduce anxiety and depression and improve mood and cognitive functioning. Exercise causes chemical changes in the brain that may help protect against developing mental illness and improve symptoms for those who already suffer from conditions like anxiety and depression.
The document discusses the benefits of exercise for mental health. Regular physical activity can help reduce anxiety and depression and improve mood and cognitive function. Exercise causes chemical changes in the brain that may help protect against mental illness and improve symptoms.
Economic and policy implications of greater global integration OECD Economic ...OECD, Economics Department
The document discusses how economic integration has increased globally since the 1990s through greater trade, financial, and supply chain links. While this has boosted living standards, it has also amplified the transmission of external shocks across borders. As a result, domestic policies need to take more account of external factors, and collective, multilateral policy responses are important to address common challenges and mitigate spillover risks from external shocks. Strengthening domestic resilience and maintaining open, rules-based international cooperation are also key to managing the implications of deepening global integration.
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
Peru's economic freedom score is 68.6, making its economy the 41st freest globally. This is an improvement of 1 point from the previous year. Peru ranks 5th out of 29 countries in South and Central America, with a score above regional and world averages. Despite challenges, Peru has achieved around 7% annual growth over 5 years through business reforms and trade agreements. Weaknesses include inadequate protection of property rights and corruption.
Medef - La France peut-elle retrouver le chemin d'une croissance forte ?Lionel Sanchez ✔
- The document discusses the challenges posed by secular stagnation and the need for stronger policy action to escape the low-growth trap. It notes that exceptionally low interest rates create both financial distortions and opportunities for fiscal initiatives.
- To boost growth, the document argues for targeted structural reforms combined with collective fiscal initiatives focused on quality investment in infrastructure and human capital. Maintaining open markets through domestic policies that support workers is also key.
- Escaping the low-growth trap requires weaving together fiscal, structural, and trade policies to strengthen both short-term and long-term growth in an inclusive manner.
China - A Country in Transition to a New Normaltutor2u
This is a revision presentation on key developments in the Chinese economy - designed for A level economics students preparing for their exams in June 2016
The OECD Economic Outlook report finds that while global growth is expected to modestly pick up, it remains below historical norms. Productivity and wage growth have been subdued and financial stability risks persist. More needs to be done to ensure the benefits of structural trends like technology and trade are shared by all. An integrated policy approach is needed, including making the international system more equitable, implementing domestic reforms, and helping displaced workers adapt to new opportunities.
The document analyzes recent economic developments in South Africa. It finds that the South African economy has been slowing and falling behind its emerging market peers in growth rates. Political tensions have also risen under President Jacob Zuma, which has weakened the ruling ANC party's popularity. The rand and bonds have underperformed while the stock market has performed better. South Africa faces challenges of high unemployment, deficits, and reliance on mining while also benefitting from its human capital and infrastructure compared to other African nations.
Even if the economic outlook for Latin America shows a relatively positive picture for the coming years it is important to know that the General Regional Economic Forecast was trimmed from 4.2% to a 3.9%, by the FMI.
Crecimiento y convergencia de la economia de nicaragua desde el modelo de solowMaria FJ
This document analyzes the economic growth of Nicaragua from 1994-2017 using the Solow-Swan model of economic growth. It summarizes the economic history and evolution of Nicaragua, provides an overview of the Solow growth model, and outlines the methodology used to estimate the model for Nicaragua. The results suggest the Solow model fits the data reasonably well. However, the model cannot fully explain Nicaragua's economic growth as parameters change over time and it does not account for technological change.
This document provides an analysis report on Brazil submitted by students to their professor. It includes an acknowledgment, table of contents, and sections on Brazil's introduction, background, inflationary conditions, growth rate, current account, and macroeconomic overview. Some key points are that Brazil has the 10th largest economy in the world, experienced GDP growth of 2.2% in 2013 but contraction of 0.5% in Q3 2013, had an inflation rate of 5.91% in December 2013 with food and transport prices rising the most, and recorded a current account deficit of $8.68 billion in December 2013.
Global growth has returned to pre-crisis levels, but reforms have been modest. While some countries took significant steps to promote business and boost skills/innovation, progress on education was limited. Reforms helped workers cope with changing jobs but intensity varied across areas. Coherent multi-dimensional reforms across firms, skills, and workers could maximize synergies and share benefits broadly over time.
According to Luiz de Mello, Deputy Head of Staff of the Organisation for Economic Co-operation and Development, Latin America has gone a long way in improving economic performance and fostering social development. Some countries have done better than others, depending on their specific conditions and policy settings. Where reforms have been made to strengthen the public finances, build human capital and improve the business environment, increased prosperity has been accompanied by a better distribution of the benefits of growth. But the continent also faces common challenges. Further improvements in education, skills and the investment climate will be essential for enhancing the region’s economic growth prospects and building more resilient, innovative societies.
Dr Dev Kambhampati | Doing Business in Malawi - 2013 Country Commercial Guide...Dr Dev Kambhampati
This document provides an overview and guide for doing business in Malawi, including:
- Malawi has a population of over 15 million and an economy based primarily on agriculture, with tobacco, tea, and sugar as major exports.
- Opportunities exist in agricultural equipment, used vehicles, and telecom equipment, while challenges include poor infrastructure, high costs, and bureaucracy.
- The guide covers topics such as finding agents, establishing an office, selling to the government, intellectual property protection, and provides resources for researching the market.
The document analyzes the political, economic, social, and technological (PEST) factors affecting Latin America in 2012. It finds that while the region faces challenges like weak institutions and infrastructure, overall economic growth is relatively positive at 4.1% due to stability and emerging markets. The largest economies like Brazil, Mexico, Chile, and Colombia are leading growth, while countries such as Venezuela and Argentina face greater economic and political instability. Innovation and addressing weaknesses will be important for the region to sustain its progress.
Brazilian Scenario - Trends and Challenges to keep IT investmentsCisco do Brasil
The document discusses trends and challenges facing IT investments in Brazil. It notes Brazil experienced a "macroeconomic rollercoaster" in the past 7 years, with high expectations giving way to weak economic growth. Key issues include falling commodity prices, a weakening currency, high inflation and interest rates, and reduced consumption and investments. Digital transformation opportunities exist but the economic outlook remains challenging without policy and economic reforms.
Chile is seen as the best country in Latin America for setting up banking business due to its strong democracy, low political risk, and good economic policies. The Chilean economy is open and resilient, though exposed to external shocks, and has a low unemployment rate. In 2015, China established an offshore yuan clearing network in Chile, the first in Latin America, following a currency swap agreement between the two countries. Some Chinese banks like China Construction Bank and Bank of China already have a presence in Chile, showing opportunities for further business development.
The document is a newsletter from STANLIB, an investment management company. It discusses various topics related to the South African and global economic and investment environment.
The main article analyzes five options for growing South Africa's economy in the current challenging conditions: 1) Increasing government spending, but debt levels are already high; 2) Private business expansion and new ventures, but confidence is low; 3) Increasing exports, but world trade growth is slow; 4) Boosting household consumption, but job losses are a risk; 5) Public-private partnerships to develop infrastructure, which could attract private funding and ease the government's budget. None of the options on their own are seen as sufficient to meaningfully lift growth
This document analyzes Brazil's standing as an investment destination by evaluating its progress in basic requirements, efficiency enhancers, and technological readiness. Regarding basic healthcare and education requirements, Brazil has a two-tiered public and private healthcare system and has experienced improvements in health indicators like life expectancy and reduced infant mortality in recent decades. However, poor health still reduces worker productivity and earnings. Overall the analysis evaluates where Brazil excels and needs improvement across various factors important for competitiveness.
The world of shipping and trade has changed dramatically in the last 10 years and continues to evolve. Large port infrastructure investments require proper planning, which is possible even in shifting markets.
The document discusses the benefits of exercise for mental health. Regular physical activity can help reduce anxiety and depression and improve mood and cognitive functioning. Exercise causes chemical changes in the brain that may help protect against developing mental illness and improve symptoms for those who already suffer from conditions like anxiety and depression.
The document discusses the benefits of exercise for mental health. Regular physical activity can help reduce anxiety and depression and improve mood and cognitive function. Exercise causes chemical changes in the brain that may help protect against mental illness and improve symptoms.
1) After the Asian financial crisis, Asian economies shifted to more flexible exchange rate regimes to reduce vulnerability to currency crises, while still maintaining some intervention to prevent large fluctuations. This created more room for monetary policy autonomy.
2) Equity market integration has increased within ASEAN and globally, indicating financial shocks can spread rapidly across Asian markets. The risk of contagion may increase if foreign investors treat ASEAN equities as one asset class.
3) Capital controls can help reduce financial contagion risks if used prudentially, such as taxes on short-term inflows. However, unilateral imposition could be harmful, so a regional guideline would help coordinate macroprudential controls.
Este documento analiza las perspectivas económicas de América Latina en 2017, centrándose en la juventud, las competencias y el emprendimiento. Señala que la región enfrenta desafíos como un lento crecimiento, altos niveles de pobreza y desigualdad, así como una baja productividad. Sin embargo, la gran proporción de jóvenes en la región, incluido Panamá, ofrece una oportunidad para impulsar el crecimiento si se empodera a los jóvenes con mejores oport
South Asian countries have experienced economic growth in recent decades but it has not been inclusive or sustainable. Poverty remains high at around 40% due to a lack of investment in human capital like education and health. Social spending as a percentage of GDP is lower in South Asia than in Sub-Saharan Africa. For growth to be inclusive and sustainable, South Asian countries need reforms like improving governance, boosting regional connectivity and cooperation, investing in people, and liberalizing trade and mobility. Civil society will need to advocate for these reforms to realize the promise of inclusive growth across South Asia.
This document summarizes consumer trends and the expansion of retail markets in growing ASEAN economies. It finds that ASEAN countries are experiencing significant economic growth driven by large populations of young people and growing middle classes. While there are differences between countries, surveys find common trends in maturing consumption across major ASEAN cities. The retail markets in Southeast Asia currently exhibit high growth and offer potential for further expansion. However, government policies and infrastructure development present risks that companies must consider when entering these markets.
Consumer Trends and Expansion of Retail Markets in Growing ASEAN Economies No...Utai Sukviwatsirikul
This document summarizes consumer trends and the expansion of retail markets in growing ASEAN economies. It finds that ASEAN countries are experiencing significant economic growth driven by large populations of young people and growing middle classes. While there are differences between countries, surveys reveal common trends in maturing consumption across major ASEAN cities. The retail markets in Southeast Asia currently exhibit high growth and offer potential for further expansion. However, government policies and infrastructure development present risks that companies must consider when entering these markets.
Paper on Emerging Economies by Abhishek PandeAbhishek Pande
1. The document discusses financial reforms in emerging Asian economies. It analyzes policies around fiscal consolidation, sustainable growth, and increased economic cooperation within Asia.
2. Key points include the importance of resolving policy uncertainty in advanced economies to support Asian growth, deeper fiscal and financial integration in Europe, and opportunities for greater trade and financial integration within Asia.
3. The paper recommends setting up financial oversight agencies in emerging Asian nations to coordinate regulation and support sustainable development goals in the region.
Chapter 4 The Political Economy of Energy Subsidy Reform Indonesia - Lontoh B...cesarkudo
Indonesia: Pricing Reforms, Social Assistance, and the Importance of Perceptio ............133
Introduction ........................................................................................................................133
Country Economic and Political Context ...........................................................................134
Reform of Gasoline and Diesel Subsidies ..........................................................................142
Understanding the Circumstances That Enabled Reform .................................................174
Conclusions .......................................................................................................................189
Annex 4A Political Chronology of Indonesia ......................................................................190
Annex 4B Chronology of Energy Subsidies .......................................................................194
Notes ..................................................................................................................................196
References .........................................................................................................................198
Beaton, Lontoh, Wai-Poi
This document discusses the development of Asia's financial systems. It notes that while Asia's financial systems demonstrated resilience during the global financial crisis, development of the financial sector still lags behind real economic growth. Asia's financial systems remain bank-dominated with underdeveloped capital markets and limited access to financial services, especially in low-income countries. Further developing Asia's financial systems is important to support continued economic growth and development in the region.
Comme tous les mois, l’équipe d’économistes de PwC publie une note sur la situation macro-économique mondiale. Ce mois-ci focus sur la zone euro, la Malaisie, et les difficultés des pays émergents - notamment des "Fragile 5".
The document discusses factors that will impact future global economic growth, including declining working age populations in many countries, decreasing investment rates worldwide, and uncertain prospects for innovation and policy reforms. It argues that post-crisis growth is unlikely to return to pre-crisis levels due to these factors constraining potential growth. To boost medium-to-long term growth, policymakers should pursue structural reforms to improve business climates, education systems, and remove other obstacles, rather than relying solely on short-term stimulus policies. Global cooperation is also needed to promote open trade, financial, and labor policies.
Social insurance and social protection in ASEAN: status, challenges and ways...Fauziah Zen
This document discusses the current status of social insurance and social protection in ASEAN countries, the challenges they face, and potential ways forward. It finds that while ASEAN countries have committed to enhancing social welfare, there is significant variation in progress across members. Demographic trends point to rapid aging populations, which will increase social security demands. Coverage of pension and healthcare programs is generally low and inadequate. Regional migration is high but constrained by various country policies. Establishing a social protection floor and addressing challenges of aging societies and migration will be important for ASEAN's vision of social welfare.
Financial developemnt and economic growth in ten Asian countries.pdfHanaTiti
The document presents a thesis submitted by Duong Dinh Trieu to the University of Economics in Ho Chi Minh City, Vietnam and the Institute of Social Studies in The Hague, Netherlands as part fulfillment of the requirements for a Master of Arts in Development Economics. The thesis examines the relationship between financial development and economic growth in ten Asian countries using data from 1980 to 2012, with the goal of determining how financial development indicators influence economic growth and providing policy recommendations.
http://pwc.to/1cpYR81
En octobre, les décideurs de partout dans le monde se sont réunis à Washington DC pour faire le bilan des perspectives économiques mondiales. Pour la première fois depuis 2010, le pronostic d’une reprise soutenue pour les économies développées devrait être positif.
This presentation by Arsenio M. Balisacan, Chairman, Philippine Competition Commission, was made during the discussion “How can competition contribute to fairer societies?” held during the 17th OECD Global Forum on Competition on 29 November 2018. More documents and presentations on this topic can be found at oe.cd/cfs.
The document discusses economic growth in India from 1950-2006, dividing it into four phases. Phase I from 1950-1965 saw average growth of 3.8% annually. Phase II from 1965-1981 saw slower growth of 3.2% annually. Phase III from 1981-1988 witnessed an acceleration to 4.8% growth. Finally, Phase IV from 1988-2006 had the highest growth of 6.3% annually on average. There is debate around the causes of growth acceleration and role of economic reforms, with some arguing it was minor reforms in the 1980s and others crediting more substantial reforms from the 1990s onwards.
The document discusses the sluggish economic recovery in the US despite massive monetary expansion by the Federal Reserve. It provides the following key points:
1) Most of the money from quantitative easing programs has remained as excess reserves held by banks at the Federal Reserve rather than flowing into the real economy or increasing bank lending.
2) Money supply has grown but credit growth and velocity of money remain low, restraining economic growth.
3) Investment remains subdued due increased uncertainty from issues like the ongoing Eurozone crisis.
4) Infrastructure investment is proposed as an alternative driver of growth and employment given the lagging housing sector recovery.
IED's Hyun Son was invited to deliver a lecture on inclusive growth at the Stephen Zuelling Graduate School of the Asian Institute of Management. Her lecture dealt with issues on measurement and operationalization of inclusive growth for Asia and the Pacific. Dean moderated the lecture, which was attended by around 50 participants
The Global Risk Nexus: Economics, Politics, Policy & Markets - MSCI Instituti...Jay Pelosky
I use the Global Risk Nexus framework to develop original insights into the investment landscape. Given where we are calendar wise the Politics and Policy sections are definitely worth a look.
D&B's 2013 mid-year Global Economic Outlook gives an update on regional insights, upgrades and downgrades for countries around the world so far in 2013, as well as a prediction for these economies through 2017.
Dun&Bradstreet ha publicado un Estudio sobre la Perspectiva del riesgo en la economía mundial para 2017.
Éstas son las principales conclusiones del estudio:
- La recuperación de la recesión de finales de la primera década del 2000 sigue siendo el mayor reto de los últimos tiempos.
- Se ha rebajado la previsión de crecimiento mundial de 2013 debido a la incertidumbre en torno a los indicadores cuantitativos y a los crecientes riesgos políticos, riesgos amplificados sobre los niveles de deuda de la OCDE, y el reequilibrio estructural en los mercados emergentes.
- Más optimismo en cuanto al crecimiento de América del Norte, gracias a un proceso de saneamiento acelerado.
- Además, más optimismo en cuanto a las perspectivas de crecimiento de 2014 a 2017 con respecto a la previsión de comienzos de 2013.
- Sin embargo, todavía hay vientos en contra de la flexibilización monetaria, del reequilibrio fiscal en los EE.UU. y del reequilibrio chino.
- The passage summarizes Pakistan's economic growth and challenges over recent years. It notes that GDP growth has been stuck at around 3-4% annually, below Pakistan's potential of 6.5%, due to various domestic and external shocks. These include floods, a security crisis, energy shortages, and global economic issues.
- The economy showed modest signs of recovery in 2011-12, with estimated GDP growth of 3.7% compared to 3% the previous year. Agriculture grew 3.1% and manufacturing 1.8% while services grew 4%.
- However, growth remains below potential and structural issues remain like challenges to sustaining high growth, low inflation, and balanced external payments. Re
DARI REVOLUSI MELALUI REFORMASI MENUJU INDONESIA SEHARUSNYA Rian
The document discusses the financial crisis in Indonesia from 1997-1998 and its aftermath. It analyzes the sources and development of the crisis, including monetary, economic, social, and political dimensions. It examines the crisis' impact on unemployment, income, and GDP. The crisis marked a transition from the New Order government to a period of political reform. Solutions discussed include improving human resources, information systems, public services, and implementing good governance through a strategy focused on excellent return on services.
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The document discusses frameworks for international cooperation to implement the 2030 Agenda. It outlines three types of policy actions: universal implementation, provision of global public goods, and international cooperation with less developed countries. It presents the 2030 Agenda cooperation framework, which involves national sustainable development strategies, provision of global public goods, and international development cooperation. It also discusses various modalities of cooperation, contributions to providing global public goods, and the roles of the G20 and Development Working Group in strengthening international cooperation.
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1. 47
3. Is Middle-Income Asia at Risk of a
Sustained Growth Slowdown?
Slower growth in China, India, and Vietnam;
prospects of persistently low growth in advanced
economies; imminent demographic aging across
large parts of East Asia—all have raised concerns
in recent years about risks of a sustained growth
slowdown in emerging Asia. In middle-income
economies, fears of a “middle-income trap”
have been growing.1 And indeed, as highlighted
in Chapter 1, although Asia’s potential growth
remains higher than that of other regions, various
estimation techniques point to a reduction in
trend growth since the 2008 global Ànancial
crisis.
This chapter examines the question further. It
Àrst identiÀes empirically the factors that induce
sustained growth slowdowns and assesses whether
and why middle-income economies may be more at
risk than their low- and high-income counterparts.
It then reviews the strengths and weaknesses of
several emerging Asian economies relative to risks
of a sustained slowdown and highlights the policy
reforms needed to alleviate such risks. The main
Àndings are the following:
• Taken at face value, economic history suggests
that a number of emerging Asian economies
run the risk of falling into a middle-income
trap. The new estimates in this chapter
suggest that the probability of a marked fall
in growth that will last for at least a decade is
indeed higher—about 1.5 times higher within
a given Àve-year time span—for middle-
income economies (MIEs) than for advanced
Note: The main authors of this chapter are Shekhar
Aiyar, Romain Duval, Damien Puy, Yiqun Wu, and
Longmei Zhang. It is based on Aiyar and others (2013).
1 The term “middle-income trap” has been recently
popularized by Eichengreen, Park, and Shin (2012, 2013),
but it appeared in a number of earlier papers, including
the Growth Report of the Commission on Growth and
Development (2008).
economies (AEs) or low-income countries
(LICs).
• However, whether a country will experience
a sustained growth slowdown depends on
the quality of its policies and institutions as
well as on a range of structural features of its
economy. Middle-income Asian economies
often compare favorably to their emerging
market counterparts on many of these
dimensions, such as the structure and intensity
of their international trade, the quality of
institutions or—for now—demographics.
By contrast, some of them perform worse
on infrastructure, which remains a key policy
priority in a number of emerging market
economies and LICs across the region. There
remains also room for institutional—not
least regulatory—reforms, as well as for fully
mobilizing untapped pools of labor to cope
with the challenge of an aging population.
Reforms in these areas will help alleviate the
middle-income trap. To various degrees and
under different forms, these institutional
reform priorities are also relevant for more
advanced Asian economies, such as Japan
and Korea.
What Is a Sustained Growth
Slowdown?
The middle-income trap is the phenomenon of
hitherto rapidly growing economies stagnating at
middle-income levels and failing to rise to the high-
income levels of advanced economies. This has
often happened as a result of a sharp and persistent
slowdown after a period of relatively strong growth.
For instance, several Latin American economies, such
as Brazil, Mexico, and Peru, entered a long period of
stagnation in relative living standards after growth
durably slowed in the late 1970s and early 1980s
2. 48
REGIONAL ECONOMIC OUTLOOK: ASIA AND PACIFIC
(Figure 3.1).2 By contrast, the four Asian Tigers
(Hong Kong SAR, Korea, Singapore, and Taiwan
Province of China) continued to grow rapidly after
attaining middle-income status and thereby reached
income levels comparable to those of advanced
countries (Figures 3.1 and 3.2). However, over the
past two decades, the experience of several other
Asian MIEs has been more mixed, reÁecting in part
the transitory but large effect on living standards of
the Asian crisis of the late 1990s. Malaysia has been
more successful than Indonesia, with Thailand falling
in between, but in all three cases convergence to
living standards in advanced economies stalled for a
decade after the Asian crisis, regaining momentum
only in recent years. China’s trajectory has so far
outstripped even that of the earlier East Asian
success stories, but the Chinese economy is still at a
rather early stage of its convergence process. With
their income per capita currently standing at 10
percent to 40 percent of average G-7 levels, China,
India, Indonesia, Malaysia, the Philippines, Thailand,
and Vietnam all face the challenge of sustaining their
convergence process (Figure 3.3).
2 Figure 3.1 shows GDP per capita—as a logarithm so
that the slope can be read as the growth rate—once
it has reached $3,000 in 2005 international dollars
(data from Heston, Summers, and Alen, 2012). The
$3,000 level is chosen as an illustrative threshold for
middle-income countries; the analysis elaborates on the
definition of a middle-income country more carefully.
The main proximate driver of a sustained
slowdown in growth has often been a persistent
decline in the growth of total factor productivity
(TFP), a crude measure of technological progress.
TFP growth can be calculated in various ways;
here, contributions to GDP growth are calculated
for physical capital, human capital, working-age
population, and the residual is called TFP growth
(for details, see Aiyar and others, 2013). Growth
slowdowns have indeed been concomitant with a
fall in TFP growth in, for example, selected Latin
American economies in the 1970s and 1980s
and, to a lesser extent, in the ASEAN-4 countries
(Indonesia, Malaysia, the Philippines, and Thailand)
in the aftermath of the Asian crisis. To sum up,
Figure 3.1
Past Growth Trajectories1
95
100
105
110
115
120
125
130
1 6 11 16 21 26 31 36 41 46 51 56 61
logGDPpercapita(period1=100)
Korea
Taiwan Province
of China
China
Indonesia
Mexico
Peru
Malaysia
Brazil
Thailand
Source: Heston and others (2012); and IMF staff calculations.
1 GDP per capita is in 2005 PPP adjusted terms. The slope of each series
reflects the growth rate. Period = 1 defined as the year when GDP per capita
for the country considered reached US$ 3,000 in PPP terms.
Figure 3.2
GDP per Capita Convergence in the Four Asian
“Tigers”
(PPP GDP per capita as percent of G7 average PPP GDP per capita)
180
0
20
40
60
80
100
120
140
160
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
Hong Kong SAR
Singapore
Korea
Taiwan Province
of China
Source: Heston and others (2012); and IMF staff calculations.
Figure 3.3
GDP per Capita Convergence in Seven Emerging
Asian Economies
(PPP GDP per capita as percent of G7 average PPP GDP per capita)
0
5
10
15
20
25
30
35
40
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
China
India
Indonesia
Malaysia
Philippines
Thailand
Vietnam
Source: Heston and others (2012); and IMF staff calculations.
3. 3. IS MIDDLE-INCOME ASIA AT RISK OF A SUSTAINED GROWTH SLOWDOWN?
49
even though physical capital, human capital, and
employment are key drivers of economic growth,
they matter less for sustained slowdowns in growth,
which seem to coincide primarily with lower TFP
growth. In the ASEAN-4 countries in recent years,
TFP gains have been fairly solid but still smaller
than before the global Ànancial crisis (Figure 3.4),
and therefore the risk of a TFP-driven growth
slowdown remains a relevant policy concern.
Are Middle-Income Economies Different?
The focus of the remainder of this chapter is on
sizable and sustained slowdowns in growth in Asian
MIEs, which here are China, India, Indonesia,
Malaysia, the Philippines, Thailand, and Vietnam.3
The methodology used to identify sustained
slowdowns in growth is described in Box 3.1.
Although the methodology captures, as expected,
several slowdown episodes in ASEAN economies
in the late 1990s, overall the frequency of growth
slowdowns has been lower in Asia than in any other
region over the past Àve decades (Figure 3.5).
3 These countries all have GDP per capita above the
$2,000 threshold (2005 PPP), used here to discriminate
between low- and middle-income economies.
There seems to be a middle-income trap, as
MIEs turn out to be disproportionately likely to
experience growth slowdowns (Figure 3.6). Indeed
the probability of an MIE experiencing such an
episode within a given Àve-year time span is about
1.5 times greater than for low- or high-income
countries, and this ratio is greater the longer the
time horizon considered. This Ànding is illustrated
here assuming a GDP per capita threshold for
low-income economies of $2,000 (2005 PPP) or
Figure 3.4
Contributions to ASEAN Growth before and after
the Global Financial Crisis1
(In percentage points of GDP)
0
1
2
3
4
5
6
7
2003–07
2010–12
2003–07
2010–12
2003–07
2010–12
2003–07
2010–12
Contribution from labor Contribution from human capital
Contribution from physical capital Contribution from TFP
GDP per capita growth (in percent)
Philippines Thailand Indonesia Malaysia
Source: IMF staff calculations.
1 Calculations rely on specific methodological assumptions and are subject to
limitations, e.g., they do not account for hours worked. See Aiyar and others
(2013) for details.
Figure 3.6
There Seems to Be a Middle-Income Trap1
(In percent)
0
2
4
6
8
10
12
14
Low-income
Frequencyofslowdowns
Middle-income High-income
Source: IMF staff calculations. See Aiyar and others (2013) for details.
1 The figure considers a low income threshold of US$2,000 and a high
income threshold of US$15,000 in PPP terms, but is robust to a range of
alternative thresholds.
Figure 3.5
Frequency of Past Sustained Growth
Slowdown Episodes by Region
(In percent)
0
2
4
6
8
10
12
14
16
18
Asia&Pacific
Sub-Saharan
Africa
Total
LatinAmerica
&theCarribean
MiddleEast&
NorthAfrica
Europe&
NorthAmerica
Source: IMF staff calculations. See Aiyar and others (2013) for details.
4. 50
REGIONAL ECONOMIC OUTLOOK: ASIA AND PACIFIC
less and a threshold for high-income economies of
$15,000 or more, as these particular cut-off points
generate a country classiÀcation that is close to
the World Bank’s gross national income (GNI) per
capita classiÀcation.4 However, it is robust to a wide
4 The most recent World Bank classification with data for
2010 is as follows in terms of GNI per capita: low income,
$1,005 or less; lower middle income, between $1,006 and
$3,975; upper middle income, between $3,976 and $12,275;
and high income, $12,276 or more. Applying this
classification to the sample and comparing it with the
$2,000/$15,000 thresholds used in this chapter yields an
overlap of 97 percent between the two methodologies;
only eight countries are classified differently.
range of alternative income thresholds for deÀning
middle income (see Aiyar and others, 2013).
What Explains the Likelihood of
Getting Trapped?
In order to identify the drivers of growth
slowdowns, new empirical analysis is performed
over a sample of 138 countries covering in some
cases 11 Àve-year periods (1955–2010). Probit
regressions are run to estimate the impact on
the likelihood of a sustained slowdown of a
wide range of structural, policy, and institutional
factors which have been identiÀed as potential
Box 3.1
Identifying Sustained Slowdowns in Growth
So-called conditional convergence growth theory predicts that economies should gradually slow down as they
converge to their steady-state GDP per capita path, which in turn depends on a range of country-speciÀc
factors including, inter alia, rates of investment in physical and human capital. To rule out such gradual, expected
slowdowns from the analysis, and also to focus more clearly on TFP-driven shifts in the growth of per capita
income, episodes of sizable and sustained slowdowns are identiÀed for a sample of 138 countries over 11 Àve-
year periods (1955–2009) as follows. First, following a conditional convergence framework, per capita GDP
growth is regressed on the lagged income level and standard measures of physical and human capital; for any
country at any given point in time, the estimated relationship yields a predicted rate of growth, conditional on
its level of income and factor endowments. Second, residuals are computed as actual minus predicted rates of
growth; a positive (negative) residual means that the country is growing faster (slower) than expected. Third, and
Ànally, country i is identiÀed as experiencing a growth slowdown in period t if the following two conditions hold:
residuali
t – residuali
t–1 < p(0.20) (1)
residuali
t+1 – residuali
t–1 < p(0.20) (2)
Here p (0.20) denotes the 20th percentile of the empirical distribution of differences in residuals from one time
period to another. Condition (1) deÀnes a growth slowdown: it says that between periods t – 1 and t the country’s
performance relative to the expected pattern deteriorated sufÀciently to place the country-period observation in
the bottom quintile of changes in the residual between successive time periods. Condition (2) deÀnes a sustained
slowdown: by examining the difference in residuals between periods t – 1 and t + 1, that is, over a 10-year period,
it rules out episodes in which growth slows down in the current period only to recover in the next.
The growth slowdown episodes identiÀed via this conditional convergence framework overlap to a large extent
with those that would be derived from an absolute convergence approach under which per capita GDP growth
would be regressed only on the lagged income level in the Àrst stage; in fact, the correlation coefÀcient between
both sets of episodes is 0.97. This suggests that when it comes to sustained shifts away from the convergence
path, growth slowdowns are largely synonymous with TFP slowdowns. This might be because slowdowns in
factor accumulation have been either more gradual (e.g., human capital accumulation) than, or concomitant with
(e.g., physical capital accumulation) TFP slowdowns.
Note: The main author of this box is Romain Duval.
5. 3. IS MIDDLE-INCOME ASIA AT RISK OF A SUSTAINED GROWTH SLOWDOWN?
51
drivers of economic growth in previous literature.5
Extensive robustness checks for the results are
then performed by means of Bayesian averaging
techniques.6 Figure 3.7 lists, for the full and MIEs
samples, the main explanatory variables found to
have a statistically signiÀcant and robust impact
in the exercise and also reports their impact on
the likelihood of a growth slowdown.7 In general,
consistent with the focus on the determinants
of sustained slowdowns, it is a deterioration in
fundamentals that matters. However, the levels of
5 Due to the poor quality or coverage of certain data, a
few potential drivers of growth slowdowns could not
be tested with a reasonable degree of confidence. One
example is income inequality and the broader issue
of whether more inclusive growth is likely to be more
sustainable, especially in MIEs.
6 Two approaches are considered, namely the weighted
average least squares (WALS) methodology developed
by Magnus, Powell, and Prüfer (2010) and the more
standard Bayesian model averaging (BMA) developed
by Leamer (1978) and popularized by Sala-i-Martin,
Doppelhoffer, and Miller (2004).
7 More precisely, Figure 3.7 reports the impact on the
likelihood of a growth slowdown from a shift in the
value of each explanatory variable from the median to
the 75th percentile of the (latest available) cross-country
distribution of that variable.
explanatory variables are also inÁuential in some
cases, pointing to threshold effects—that is, certain
fundamentals matter only when they are either very
weak or very strong, such as infrastructure.
In a nutshell, sound economic institutions (strong
rule of law, limited government involvement
in the economy, avoidance of overly stringent
regulation of product, labor, and credit markets)
as well as favorable demographics (low old-
age dependency ratio, in particular, possibly
reÁecting its impact on aggregate saving and/
or productivity) and trade structure (exports
diversiÀcation, regional trade integration,
proximity to larger markets) can all reduce the
likelihood of a growth slowdown. By contrast,
strong capital inÁows as well as investment
booms, while good for growth, also entail risks of
bust further down the road;8 because boom-bust
cycles can have long-lasting adverse effects on
living standards, avoiding them can support trend
growth.
The same factors matter for MIEs, but with
notable speciÀcities. Reducing government
involvement in the economy and easing stringent
regulations both matter disproportionately once
middle-income status is reached. This may be
because they facilitate private sector development
and encourage innovation over absorption of
existing technology, both of which are key
to graduating into the ranks of high-income
economies. Likewise, insufÀcient road and
telecommunication infrastructure emerges as a
potential risk factor for growth, suggesting that
infrastructure development matters more once the
low-income stage of development has been passed.
Are Middle-Income Asian Economies
at Risk of a Sustained
Growth Slowdown?
The results from the empirical analysis can be used
to assess the relative strengths and weaknesses of
8 For similar reasons, a high and growing share of
manufacturing in the economy is also found to increase
slowdown risks (result not reported here).
Figure 3.7
The Impact of Changes in Fundamentals on the
Probability of a Sustained Slowdown1
(In percent; shift from median to 75th percentile of distribution of
explanatory variable)
−6
−4
−2
0
2
4
6
8
L.Strongruleoflaw
L.Smallgovernment
D.Smallgovernment
D.Lightregulation
L.Dependencyratio
L.Roadnetwork
L.Telephonelines
L.Grosscapitalinflows
D.Investmentshare
D.Tradeopenness
D.Grosscapitalinflows
L.Distance
L.Regionalintegration
Full sample Middle-income sample
Institutions Demography Infrastructure Macroeconomic
factors
L.Weakexport
diversification
Trade structure
Source: IMF staff calculations. See Aiyar and others (2013) for details.
1 L. stands for the lagged level while D. stands for the lagged difference of the
explanatory variable.
6. 52
REGIONAL ECONOMIC OUTLOOK: ASIA AND PACIFIC
Figure 3.9 averages country rankings across each
of the Asia, Latin America, and Middle East and
North Africa (MENA) regions so as to compare
these regions as a whole.
Asian MIEs appear to differ in their risk factors
(Figure 3.8). Compared with others in the region,
each Asian MIE in terms of its exposure to risks
of a sustained growth slowdown. As an illustration,
Figure 3.8 ranks each of the 28 MIEs in the sample,
including seven in Asia (China, India, Indonesia,
Malaysia, the Philippines, Thailand, and Vietnam),
along Àve broad categories: economic institutions,
trade structure, infrastructure, demographics (old-
age dependency ratio, as projected by 2020), and
macroeconomic factors (investment, capital inÁows).
In each category, rankings are computed for
simplicity as simple averages of the rankings on the
variables belonging to this category. The results are
shown in the form of “spider webs:” the larger the
area within each country’s “spider web,” the better
its current settings in the dimension considered.9
9 Figures 3.8 and 3.9 are qualitatively consistent with, but
do not strictly follow, the empirical analysis. First, with
the exception of the “macroeconomic factors” category,
only the levels of the explanatory variables are used for
the computation of rankings, while the empirical analysis
identifies a mix of levels and differences as drivers of
slowdown probabilities. Second, in each category, the
overall ranking is computed as a simple average of
rankings on the variables belonging to this category,
implicitly assigning them equal weights. Third, they
exclude some variables from consideration.
Figure 3.8
Strengths and Weaknesses of Asian MIEs1
0
7
14
21
28
Institutions
Dependency
ratio
InfrastructureMacroeconomic
factors
Trade
structure
Indonesia Malaysia Philippines Thailand
0
7
14
21
28
Institutions
Dependency
ratio
InfrastructureMacroeconomic
factors
Trade
structure
China India Vietnam
Source: IMF staff calculations. For details on underlying statistics and data sources, see Aiyar and others (2013).
1 Latest available observations on each individual variable, with the exception of dependency ratios, which are projected 2020 values. See Aiyar and others (2013)
for details. Institutions includes small government involvement in the economy, strong rule of law, and light regulation; infrastructure includes telephone lines and road
networks; macroeconomic factors includes low gross capital inflows, the change over 2008–12 in capital inflows and trade openness, and the (negative of the) change
in the investment-to-GDP ratio; trade structure includes strong regional integration and low GDP-weighted distance. Numbers in the panels represent a simple average
of the rankings along each individual variable.
Figure 3.9
Strengths and Weaknesses of Asian MIEs
Relative to Other Emerging Regions
0
7
14
21
28
Institutions
Dependency
ratio
InfrastructureMacroeconomic
factors
Trade
structure
Emerging Asia Latin America
Middle East & North Africa
Source: IMF staff calculations. See Aiyar and others (2013) for details.
Note: For definition of variables, see note to Figure 3.8.
7. 3. IS MIDDLE-INCOME ASIA AT RISK OF A SUSTAINED GROWTH SLOWDOWN?
53
India, the Philippines, and Thailand are exposed
to a larger risk of growth slowdown stemming
from subpar infrastructure. Improving economic
institutions is a further challenge for India and the
Philippines, as well as for China and Indonesia.
China’s relative risk factors also relate to its post-
crisis increase in investment, while Malaysia’s
include its strong capital inÁows—both, which
are captured here in the macroeconomic factors
category, have supported growth but also involve
potential vulnerabilities.
On average, MIEs in Asia are less exposed to the
risk of a sustained growth slowdown than MIEs
in other regions (Figure 3.9). However, their
relative performance is weaker on institutions.
Indeed there remains ample room for easing
stringent regulations in product and, in some
cases, labor markets. On infrastructure, middle-
income Asia fares, on average, somewhat better
than other regions, but there is wide cross-country
heterogeneity, and the particular indicators
selected by the empirical analysis cover only road
transport—an area in which Asian MIEs do
reasonably well in international comparison—and
telecommunications. In practice, several countries
in the region need to develop new infrastructure
and upgrade existing infrastructure in energy,
public transit systems, freight, and ports. On
macroeconomic factors, while Asia’s recent growth
has typically beneÀted from its comparatively
strong capital inÁows and increased investment
rates, these also come with risks. In order to
continue making the most of these growth factors,
as the Asian Tigers did in the past, economic
rebalancing—primarily in China—as well as
prudential regulation to limit the build-up of
excessive capital inÁows and cushion the impact
of any sudden stop, should remain high on the
region’s policy agenda (as highlighted in Chapter 1).
Other dimensions appear to be relative strengths. In
particular, regional integration and vertical supply
chains in Asian MIEs compare favorably with Latin
American and MENA economies. Even India and
Indonesia, which in this category lag behind the
other Asian economies considered, are well situated
compared to the broader sample.
Can Emerging Asia Get Old before It
Gets Rich?
On demographics, the picture is mixed. Until
now, dependency ratios have been typically low in
Asian MIEs, including compared with their Latin
American and MENA counterparts. However,
working-age population growth is already slowing
down across the region, and dependency ratios
are projected to rise sharply, albeit to varying
degrees and at different horizons (Figure 3.10).
Over the next decade, only China, Thailand, and
Vietnam are expected to experience some pickup
in the ratio, while India, the Philippines—where
dependency ratios remain comparatively high but
are coming down rapidly—and to a lesser extent
Indonesia will see a decline in the ratio as they
enjoy a “demographic dividend.” Beyond the 10-
year horizon, with the notable exception of India
and the Philippines, a generalized deterioration is
foreseen, with China and Thailand being hardest
hit. Government policies will have to adapt by
building “aging proof” pension systems, under
which effective retirement ages adjust to increases
in life expectancy. They will also need to facilitate
greater female participation in the labor force and
fully mobilize untapped pools of labor resources in
informal sectors.
Figure 3.10
Overall Dependency Ratios1
(Ratio of population aged 0–14 and 65+ to aged 15–64; in percent)
30
40
50
60
70
80
90
100
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
China India Indonesia Malaysia
Philippines Thailand Vietnam
Sources: U.N. Population Database; and IMF staff calculations.
1 Dependency ratio projected using the U.N. medium fertility scenario.
8. 54
REGIONAL ECONOMIC OUTLOOK: ASIA AND PACIFIC
Catching up to advanced economies’ living
standards will ultimately require shifting from
a development model based on technology
absorption to one that fosters innovation. Indeed,
consistent with their current development stage,
most Asian MIEs are lagging behind advanced
economies on various innovation indicators such
as the number of patents per capita or the degree
of sophistication of their exports. Many of the
areas for further reform highlighted above—
for example, improving infrastructure, easing
stringent product and labor market regulations,
further deepening trade integration—will help on
this front, but other policies can also help output
move up the value chain. In particular, as Asian
MIEs continue to develop, their governments will
have a role to play in raising R&D spending and
tertiary education attainment, two key areas for
innovation outcomes (for their empirical relevance
for the middle-income trap, see Eichengreen,
Park, and Shin, 2013). There usually remains
signiÀcant room for improvement on both fronts,
although China appears to outperform regional
peers in the innovation area10 and is also catching
up rapidly on tertiary education enrollment
(Figures 3.11 and 3.12).
Finally, good policies are helpful not only to avoid
the middle-income trap, but also in advancing
growth elsewhere in Asia. Improvements in
infrastructure, regulation, trade openness, and
education are all needed to deliver and sustain
strong growth in LICs. Likewise, in higher-income
economies like Japan and Korea, increasing
competition in product markets, improving
innovation policies, reducing labor market dualism
through job protection reform, and addressing the
demographic aging challenge by fostering greater
female participation in the labor force are all key
challenges to raise trend growth.
10 In this area, China’s performance now compares with
some of the advanced economies in terms of both
inputs (e.g., R&D spending) and outcomes (e.g., number
of triadic patents—those filed simultaneously in Europe,
Japan, and the United States—per capita).
Figure 3.11
Tertiary Education Enrollment1
(In percent of eligible age group)
0
10
20
30
40
50
60
70
India
Indonesia
Vietnam
China
Philippines
Malaysia
Thailand
Asia
LatinAmerica
G7
MiddleEast&
NorthAfrica
Sources: UNESCO database.
1 Tertiary education enrollment is classfied as total enrollment in ISCED 5 and
6 regardless of age. Eligible population is the 5-year age group starting from
the official secondary school graduation age. China, Thailand, and Vietnam
data are as of 2011; India, Indonesia, and Malaysia, 2010; the Philippines,
2009; Latin America, 2005-11; Middle East and North Africa, 2008-11; G7
(excluding Germany), 2009–10.
Figure 3.12
Research and Development Expenditure1
(In percent of GDP)
0.0
0.5
1.0
1.5
2.0
2.5
Indonesia
Philippines
Vietnam
Thailand
Malaysia
India
China
LatinAmerica
Asia
G7
MiddleEast&
NorthAfrica
Sources: World Bank, World Development Indicators; UNESCO database;
and country authorities.
1 Latest available data: Malaysia, 2006; India, the Philippines, and Thailand,
2007; China and Indonesia, 2009; Vietnam, 2010; Latin America, 2006–10;
Middle East and North Africa, 2009–11; G7, 2009–10.