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East Asia & Pacific is facing some great development challenges today: urbanization, protection of the environment, the need to find renewable energy sources and many others. This site wants to create a conversation around those important issues. More »

November 2009

Possible asset bubbles in Asia: how to avoid them?

Submitted by Louis Kuijs on Thu, 2009-11-19 22:43

Just as Asian economies started to recover from the global recession, policymakers and markets have started to worry about unwarranted asset price increases. While the worries are global, especially in the case of stock markets, the risks of asset prices bubbles seem particularly high in Asia, where abundant liquidity is driving up prices of all sorts of assets, from Hong Kong and Singapore real estate to Chinese art.

Where is the liquidity coming from? Capital inflows have received a lot of attention lately. Financial capital is flowing into Asia, attracted by the continent’s relatively good economic prospects. More important, for most economies, is a dramatic easing of domestic monetary conditions since late 2008 that has fueled domestic liquidity.

In part, the easing of monetary conditions in Asia was deliberate, a policy response to sharp weaker growth. However, some of the easing of monetary conditions was not deliberate. Economies with an exchange rate somewhat or completely fixed to the US dollar and fairly open capital markets are “importing” the loose US monetary policy. In some economies, those imported monetary conditions sit oddly with domestic economic conditions. In many Asian economies, spare capacity is much smaller than in the US and cyclical unemployment much lower.

The winds of change are blowing in Malaysia

Submitted by Philip Schellekens on Wed, 2009-11-18 01:26

The winds of change are blowing in Malaysia, as the government is taking on an ambitious agenda of structural reform. The objective is to climb up the income ladder and join the league of high-income economies. This is a difficult challenge – one which not many countries have successfully met in the post-war period.

Against this backdrop, the World Bank’s launch of a new report on the Malaysian economy (full disclosure: I lead the team who authors the report) is timely. The Malaysia Economic Monitor, which will be published twice a year, aims to provide context to the challenges facing Malaysia and serve as a platform for discussion and the sharing of knowledge.

New Google feature lets users quickly search World Bank development data

Submitted by James I Davison on Tue, 2009-11-17 10:24

If you haven’t already taken the time to do some development-related Googling after last week’s announcement that World Bank statistics are now available through the ubiquitous search engine’s public data tool, I’d suggest exploring the exciting new feature. Now, anyone can easily access 17 World Development Indicators by searching for them in Google. Give it a try by searching for the GDP of China or CO2 emissions of Indonesia or exports of Thailand – or another country and any of these indicators.

When you click on the search result, an interactive chart page shows you how the data have changed over time and allows you to compare to other countries (or the world). (You can also embed the chart, like the one below.) For example, take a look at how the GDP growth rate of China compares to Indonesia, Thailand and the Philippines in the last 50 years.

To further explore the data, check out another nifty tool, also launched last week by the World Bank. DataFinder lets you research more about these development indicators and see how they look on an interactive map. Read more about DataFinder here.

Your questions about East Asia and Pacific's rebound from the crisis, answered by World Bank economists

Submitted by Claudia Gabarain on Sun, 2009-11-15 23:01

Almost like an audience-customized appendix to the World Bank's East Asia and Pacific Update November 2009, the live online chat held last Thursday by the regional Chief Economist, Vikram Nehru, and the lead author of the report, Ivailo Izvorski, answered a good number of questions in detail.

From diversifying Cambodia's economy to the right moment to suspend governments' stimulus packages, Vikram and Ivailo also touched on the effect of a weak US dollar in East Asian economies, on the challenges to generate domestic growth in export-dependent economies, and on the risks of inflation and asset price bubbles in the region, among others. Take a look at the transcript.

Faith in conservation: Representatives of multiple religions commit to protecting the planet

Submitted by Tony Whitten on Fri, 2009-11-13 15:08
Prince Philip and UN Secretary-General Ban Ki-moon discuss the Buddhist 8-Year Plan at an event dedicated to faith and conservation. (Photo courtesy of ARC/Richard Stonehouse)

A Grand Mufti, a Rabbi, an Archbishop, a Daoist Master, and a Shinto priest went into a bar . . .

This may read like the start to a bad joke, but it happened last week in Windsor, England (though let’s be clear that the bar was serving only hot drinks and chocolate cookies). It was all part of the “Many Heavens, One Planet” Celebration organized by ARC and UNDP, at which all the major faith traditions launched “Long Term Commitment Plans for Protecting the Living Planet.” They were honored at a special ceremony in Windsor Castle, hosted and attended by both HRH The Duke of Edinburgh and United Nations Secretary-General HE Ban Ki-moon.

Innovative ideas to save the planet (and East Asia Pacific region) from climate change

Submitted by James I Davison on Thu, 2009-11-12 16:13
David Manalo's organization wants to distribute unique floating generators to provide electricity to people in a remote part of the Philippines.

The theme of this year’s global Development Marketplace – a competitive grant program created by the World Bank – seems particularly relevant to an issue that is all too familiar to developing countries in the East Asia and Pacific region: adaptation to climate change. More than 1,700 submissions were received for the 2009 competition, vying for 25 grants of up to $200,000 each and proposing innovative ways to protect the poor, who are most vulnerable to the effects of climate change. This week, 100 finalists are visiting the Bank’s headquarters in Washington, DC, to share their ideas during the cleverly named event: “100 Ideas to Save the Planet.”

I spent some time yesterday walking around the marketplace and meeting a few of the 20 or so finalists representing East Asian and Pacific countries. (The grant winners will be announced Friday. Visit the DM blog for more coverage of this year’s event.) The people I talked to were passionate and eager to share their projects, which are focused on helping people deal with extreme weather that may be caused or worsened by climate change.

China's engagement in Africa increases – and so does the debate around it

Submitted by Philip Karp on Tue, 2009-11-10 16:24

The issue of China-Africa engagement has been in the headlines this week as leaders from China and from across the African continent gathered in Egypt for the Fourth Heads of State Summit of the Forum on China-Africa Cooperation (FOCAC) where Chinese Premier Wen Jiabao announced China’s latest round of pledges of development support to Africa, including US$10 billion in concessional loans over the next three years. This latest round of pledges will no doubt further accelerate China’s growing importance as a source of trade, investment, and aid to African countries.

The magnitude of China’s engagement is indeed impressive. Two-way trade between China and Africa has grown at more than 40 percent per year since the year 2000, reaching nearly US$107 billion in 2008. Chinese foreign direct investment in Africa is also growing rapidly, topping US$5.4 billion last year, according to China’s Minister of Commerce, and more than 1,600 Chinese companies are reported to have invested in Africa. China has been particularly significant as a source of financing for investment in infrastructure, having announced commitments just shy of US$16 billion over the period 2001-2006, according to study released last year by the World Bank’s Africa Region (pdf).

Submit questions on East Asian and Pacific economy for Nov. 12 online chat

Submitted by James I Davison on Tue, 2009-11-10 12:37

The World Bank’s latest economic assessment of developing countries in the East Asia and Pacific region, released a week ago, came to some interesting conclusions and attempted to answer a lot of questions on a complex subject. Notably, the report’s authors pointed to the major role China has played in the region’s swift rebound from the crisis.

Later this week, two World Bank economists will be answering your questions about the report in a live online chat. On Thursday, Nov. 12, at 10:00 a.m. Washington DC time (15:00 GMT or 11:00 p.m. Beijing time), join Ivailo Izvorski, lead economist and author of the report, and Vikram Nehru, Chief Economist for the East Asia and Pacific region to send questions and read their answers. You’re strongly encouraged to submit your questions in advance.

Experts give urgent call to save wild tigers

Submitted by Tony Whitten on Mon, 2009-11-09 16:07
There is a great deal of passion surrounding the subject of tiger conservation, and there was a great deal of energy at the recent Global Tiger Workshop in Kathmandu, Nepal. (Photo courtesy of catlovers under a Creative Commons license.)

I’m writing this in Kathmandu, Nepal, at the end of the Global Tiger Workshop, the latest event leading up to the Tiger Summit expected to be held late next year in Vladivostok. This process all began with the major launch of the Global Tiger Initiative (GTI) in Washington, DC, in June 2008, and direct engagement with the tiger range countries on the issue of illegal wildlife trade really took off in Pattaya, Thailand, in April this year with ASEAN-WEN and other partners.

This was no ordinary World Bank-facilitated meeting inasmuch as National Geographic filmed the event, and it included a kilometer-long, elephant-led parade of children calling for the conservation of tigers. The GTI team keyed into the Asian and global media through op-eds, press releases, and YouTube. It also had significant support from the highest levels of the Nepali government which excelled itself not just in organizational support and hospitality, but also in commitments for tiger conservation – i.e. plans to double the size of one of its top tiger habitats, Bardia National Park. As remarked by Eric Dinerstein, World Wildlife Fund-US Chief Scientist, there has not been such a positive period for the future of Nepal’s tigers in all the 35 years he has been living in and visiting Nepal.

In Thailand, finding the way back into growth: Step 1, switch the supply chains back on

Submitted by Frederico Gil Sander on Wed, 2009-11-04 12:35

As part of its regular monitoring of the corporate sector in Southeast Asia, the World Bank economic team I am part of in Thailand has been working on a short case study of supply chains of Japanese multinational companies (MNCs) in the electrical and electronics (E&E) industry. We wanted to hear directly from firms about how the crisis affected them, how they were able to adjust so quickly to the drop in demand, what the rebound looked like, and what were the prospects going forward to upgrade along the value chain. I have learned a great deal from these interviews, and have become convinced that supply chains are central to understanding the current crisis in Thailand and East Asia more generally.

Some facts: the crisis had a disproportionate impact on manufacturing. In Thailand, manufacturing represents about 40 percent of GDP, but contractions in manufacturing value added have accounted for about 75 percent of the contraction of headline GDP. Within manufacturing, the auto and E&E industries account for the bulk of the contraction. Most of the output in those industries is exported, and more than three-fourths of the decline in Thai exports during the crisis was due to falls in shipments from the auto and E&E industries. My conclusion is that the magnitude of the crisis in Thailand has been driven primarily by these two industries.