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Global Economy

Regional integration as a risk management tool for Southeast Asian countries

Cledan Mandri-Perrott's picture

Coauthored with Darwin Marcelo Gordillo, Infrastructure Economist at the World Bank Group and Ruth Schuyler House, Consultant, the World Bank Group

Night in Bangkok, Thailand
Credit: Mike Behnken / Flickr

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.
 
 

Global Economic Prospects January 2016: Regional integration and spillovers

Derek H. C. Chen's picture
A key risk to global growth in 2016 is that a number of emerging markets slow simultaneously. Following a decade of deepening integration among emerging markets and developing countries, weakness in a few major emerging markets could spread to set back activity across the emerging market and developing country world. The January 2016 Global Economic Prospects report examines regional integration and the possibility of spillovers from growth shocks at the global and regional level.

18 years later, in Romania

Victor Neagu's picture
 
Brasov University, Romania circa 1979

I first moved to Romania in 1998. It was a very different place back then. Stalls of CDs, clothing, pretzels (“covrigi”), and inexpensive electronic gadgets walled the sidewalks of a street that was the artery connecting my neighborhood with the more central parts of the north-eastern city of Iasi.

A sense of hardship was in the air. The city was grey. The collapse of the communist regime left many struggling for a better life in a new system that was striving for the rule of law, democracy and a free market economy.

As a 15-year old student back in those days, I was able to cross the border between Moldova and Romania with my school card. It had a glued color photo of me and my hand-written grades. One time, a border guard asked me if I was a good student. Modesty was not a choice if you wanted to cross the border, or so I felt at the time. He skipped through my grades, smiled and wished me a safe journey.

I moved back to Romania on February 1st of this year. This time as a 33-year old World Bank staff. It has been 18 years, but now I can call Romania home again.

Malaysia’s long race to competitiveness

Laura Altinger's picture
Have you ever felt like you are in a race and each time you pass another competitor, more keep showing up ahead on the race track in an endless marathon? Well, countries striving to be competitive face a similar predicament. No matter how hard they try to improve their competitiveness, cut the red tape and reduce burdensome regulations, other countries are doing the same, but even quicker.

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.
 

Quote of the week: Mariana Mazzucato

Sina Odugbemi's picture

Mariana Mazzucato“If we actually look at the few countries that have achieved smart, innovation-led growth, you’ve had this massive government involvement. How can we square that with the whole austerity discourse?”

-Mariana Mazzucato, an economist and author of The Entrepreneurial State: debunking public vs. private sector myths, which was featured on the 2013 books of the year lists of the Financial Times and Forbes. She is also the RM Phillips Professor in the Economics of Innovation at the University of Sussex, SPRU. She has also blogged for the World Bank in the past. 

Accelerating economic growth and job creation in Bangladesh

Sanjay Kathuria's picture
Instructor and Students at the Bangladesh Korea Technical Training Center, Chittagong
Instructor and Students at the Bangladesh Korea Technical Training Center, Chittagong.
Credit: Mahfuzul Hasan Bhuiyan

Bangladesh has a major opportunity to address one of its most pressing development challenges: creating 20 million new jobs over the next decade.  And the trade agenda will be a centerpiece of any strategy that seeks to address this challenge.
 
Join me for a Facebook Q/A chat on January 28 to discuss this and other findings from the recently released report Toward New Sources of Competitiveness in Bangladesh co-authored with Mariem Mezghenni Malouche.
 
Below are some 4 highlights from the report, which we will be discussing. I look forward to your questions and a vibrant discussion!
 

  1. Bangladesh will need to expand its linkages with neighboring countries such as China and India as well as other Asian countries like Japan and South Korea.  Not only are these very large markets, they are also potential sources of greater foreign direct investment.  What are the critical steps that will allow this to happen?  How can the recently signed Motor Vehicles Agreement between Bangladesh, Bhutan, India and Nepal help?  What are the barriers to Bangladesh’s venturing into new markets?

  2. Bangladesh will need to gradually diversify its export base into new product areas while also strengthening its position as the second-largest garment producer in the world (after China).  Our report explores the critical challenges that could allow this to happen.  In your view, what challenges lie ahead if Bangladesh tries to diversify its exports?  Can you name some prospective industries (for diversification)? What will be the role of foreign direct investment in this diversification?  What kind of reforms are needed to attract more domestic as well as foreign direct investment?

  3.  

Global economic prospects: sluggish emerging market activity to weigh on global growth in 2016

Carlos Arteta's picture

Global economic growth is projected to pick up modestly in 2016 to 2.9 percent after a disappointing 2015, the January 2016 Global Economic Prospects report says.  Growth slowed last year to a 2.4 percent rate, 0.4 percentage points below earlier projections, amid falling commodity prices and weak flows of trade and capital.

Growth is expected to edge up this year as advanced economies grow more solidly, commodity prices stabilize, China continues to gradually rebalance its economy and global financial conditions remain benign despite rising United States interest rates.  Even so, the forecast is lower than projections of six months ago, principally due to the simultaneous slowdown in major emerging market economies.
 

Demography should guide policies in the world’s centers of poverty and fragility

Hans Lofgren's picture
What role could demographic policy play in the countries with the highest poverty rates and the lowest level of human development, which often also suffer most from conflict and violence? A crucial role.

This is a key message in the Global Monitoring Report 2015/2016 – Development Goals in an Era of Demographic Change, recently issued by the World Bank and the IMF. The countries in this category are labeled “pre-dividend,” (see Figure 1); two thirds of the world’s countries most affected by fragility, conflict and violence belong to this group.

Figure 1. Global Monitoring Report Demographic Country Typology: Pre-dividend countries.
Source: World Bank. 2015. Global Monitoring Report.

Did data miss the Arab Uprisings?

Mohamed Younis's picture
Cairo's Tahrir Square, Egypt. Hang Dinh / Shutterstock.com

In the build up to the Arab uprisings, data was doing its part to deceive those who follow the region closely. Tunisia and Egypt provide great examples. Both nations closed the first decade of the century implementing the kind of classic economic reforms often praised by western-based multilateral and international organizations. Extremely qualified, intelligent and well-meaning experts on both countries took an objective look at reforms, GDP trajectories and other traditional metrics, such as infant mortality rates, poverty reduction, etc., and concluded that these countries, while not perfect, were moving forward along a path of increasing correction. A few weeks later, both nations were in complete political upheaval.  

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