East Asia and Pacific
As part of our series of 25 years in 25 days, we start with 1991, the year Mongolia joined the World Bank, IFC, and IDA. The Articles of Agreement were signed on February 14, 1991 on the eve of the Mongolian lunar new year, Tsagaan Sar. Mongolia greeted the year of the female iron sheep as the 155th member of the World Bank.
Mongolia’s first Country Economic Memorandum was titled “Toward a Market Economy”, and it wrestled with the immediate macroeconomic challenges of runaway inflation and falling output. The official exchange rate was 40 MNT per US$. Price reform was among the most crucial elements of a reform program aimed at stabilizing the economy. While noting economic risks, the report also noted that “Mongolia's medium-term development prospects include its well educated labor force, abundant agricultural and natural resources and the basic resilience of the rural economy.”
This past autumn, I saw a shocking headline: Forest fires in Indonesia were creating as many greenhouse gas emissions as the entire United States economy.
Between June and October 2015, an estimated 2.6 million hectares—or 4.5 times the size of Bali— burned to clear land for production of palm oil, the world’s highest value non-timber forest crop, used in food products, cosmetics, biofuels.
Recently, along with Vice President for Sustainable Development Laura Tuck and Indonesia Country Director Rodrigo Chaves, I visited South Sumatra, one of the provinces hardest hit by the fires.
We saw scrubby fire-adapted landscapes that had replaced biodiversity-rich peat swamp forests.
We spoke with local communities who explained how they covered doors and windows with wet towels, to help reduce the smoke. These families are among the half million people who suffered from fire-related respiratory infections, skin and eye ailments; their children were among the 4.6 million students who missed school last year due to fires, some for weeks at a time.
While some of these families lost earnings or assets due to the fires, others spoke of how fire improves soil quality.
When the water is poor, people get sick: they have diarrhea; their growth is stunted; they die. When the air is poor, people get sick: they cough; they cannot leave their beds; they die. However, they do not look sick when there is lead in their blood. You cannot look at a child who has an unhealthy blood lead level (BLL) and say, "This is not right. Something must be done," because in most cases, there is nothing to see.
Lead (Pb) exposure—which is making headlines in the U.S. because of recent events in Flint, Michigan-- is a major source of critical environmental health risks. But the problem is subtle: Affected children do not perform as well in school. They are late to read. They are slow to learn how to do tasks. Perhaps a few more children are born with cognitive deficits. Perhaps these children have less impulse control. Perhaps they exhibit more violence.
These symptoms are not always understood as an environmental or a public health problem – or indeed a development problem. Instead, people will say it is an issue of morals or of education. They will discipline the children, and then they will take themselves to task and ask how and why they are failing to raise these children correctly. Furthermore, they will have no idea that the problem is in the children’s blood.
Young children are particularly vulnerable to lead exposure. Studies have documented that exposure leads to neuropsychological impacts in children--including impaired intelligence, measured as intelligence IQ losses--at blood lead levels even lower than 5 micrograms of lead per deciliter of blood (µg/dL). So, clearly, the effect occurs at even very low BLLs.
Coauthored with Darwin Marcelo Gordillo, Infrastructure Economist at the World Bank Group and Ruth Schuyler House, Consultant, the World Bank Group
Given the current slowdown of the Chinese economy, many are trying to predict the impact on the world’s economy as well as the regional trickledown effects. Countless developing countries are focused on building ties with large-scale, global economies like those of the U.S., OECD, India, and China. But perhaps it’s time to consider what role enhanced regional integration can play -- not only as a way to enhance connectivity with larger markets, but also as an important risk management measure to protect countries’ economies in the event of economic downturns in the world’s larger markets.
This sort of regional integration can be accomplished by better connecting infrastructure such as roads, rail, and maritime routes – sectors that are good candidates for public-private partnerships (PPPs). This could bring benefits to Southeast Asia, the part of the world we work in, as well as many other regional economies.
Globally, around 2 billion people do not use formal financial services. In Southeast Asia, there are 264 million adults who are still “unbanked”; many of them save their money under the mattress and borrow from so-called “loan sharks”, paying exorbitant interest rates on a daily or weekly basis. Recognizing the importance of financial inclusion for economic development, the leaders of the Association of South East Asian Nations (ASEAN) have made this one of their top priorities for the next five years.
Last week, the World Bank Group presented the latest data on financial inclusion in ASEAN to senior representatives of the ministries of finance and central banks of all 10 ASEAN member countries (Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam). The session, held in Kuala Lumpur, is one of the joint activities the new World Bank Research and Knowledge Hub and Malaysia is undertaking to support financial inclusion around the world.
Malaysia is already a very competitive country. Today it ranks 18 out of 189 economies in the World Bank Group’s Doing Business Index. Yet, its ambition is to become more competitive. And it wants to overtake some countries on the way up. Malaysia has long recognized that a concerted cross-ministerial and public-private collaboration is needed to do just that.
Malaysia’s Special Task Force to Facilitate Business (PEMUDAH), was established in 2007 to improve the ease of doing business in Malaysia. Testament to its success was Malaysia’s surge to 6th position in the 2014 Doing Business, up from 12th place in 2013 and 18th in 2012, placing it in the same league as Singapore, Hong Kong, and the United States. But since then, Malaysia has been challenged to keep up with the rapid pace of business reforms across the globe.
To discuss some of the key infrastructure challenges faced by its client countries, the World Bank recently hosted its first International Conference on "Sustainable Development through Quality Infrastructure” in Tokyo, Japan. But what exactly do we mean by "quality infrastructure", and what role can it play in creating resilient, sustainable cities?
At the time, the country was still opening up to the outside world, and the Bank had just set up a small office there. I recently returned to Vietnam after 15 years, this time as the Bank’s Global Lead for Land. I saw a completely different country: while the old city charm is still there, Hanoi has transformed to the point that it is really difficult to recognize… as if I had landed in Japan, China, or any other Southeast Asian country.
The airport used to be one gate; now, it is a modern airport not much different from any airport in Western Europe or the United States. I remember that, when I worked in Vietnam in the mid-90s, GDP per capita was averaging US$200, and around 50% of people lived in extreme poverty. Today, GDP per capita has soared to about US$2000, while extreme poverty has dropped to around 3% according to the US$1.9/day extreme poverty line... An impressive achievement in less than 20 years.
My trip to Vietnam had the goal of helping the government modernize and automate the land administration system. In the early 90s, the country launched an ambitious reform program to transform the land use model from communal farming to individual household ownership by breaking up the communal land structure and distributing land to individual households. This reform was then credited with changing Vietnam from a net importer of rice to one of the largest rice exporters in the world in only a few years.
In accordance with the Land Law of 1993, the first Land Use Certificates (LUCs) issued under the program were in the name of the “head of household”, i.e. in the name of men only. Later on, the Vietnamese government, with support from the World Bank, strove to change things around by issuing LUCs bearing both the wife’s and the husband’s names.
Asian societies are aging, and Thailand is aging rapidly. Already over 10 percent of the Thai population, or more than 7 million people, are 65 years old or older. By 2040, a projected 17 million Thais above 65 years of age will account for more than a quarter of the population. Together with China, Thailand already has the highest share of elderly people of any developing country in East Asia and Pacific, and it is expected to have the highest elderly share by 2040. A recent World Bank report, Live Long and Prosper: Aging in East Asia and Pacific (pdf), discusses aging in Asia and how countries can address the resulting challenges, and take advantage of emerging opportunities.
In many ways, aging is a consequence of longer life expectancy due to development success in Thailand: people live longer, and fertility has come down rapidly from the unsustainably high levels of earlier decades. However, every success brings new challenges and aging is no exception. For example, the size of the working age population in Thailand is expected to shrink over 10 percent by 2040. Thailand has exhausted its “demographic dividend”, and future growth and improvement in living standards will largely come from increases in productivity. In addition, households headed by elderly Thais are twice as likely to be poor as those in their 30s and 40s, and in most cases are not covered by formal sector pension schemes.