Dots on the world map – they are coral atolls and volcanic islands spread across a vast swath of the Pacific Ocean with names as exotic as their turquoise water, white sand and tropical foliage.
Twelve Pacific Island countries are members of the World Bank. Between them they are home to about 11 million people, much less than one percent of the global population.
One of them, Kiribati, consists of 33 atolls and coral islets, spread across an area larger than India, but with a land mass smaller than New Delhi. With less than 10,000 inhabitants, Tuvalu is the World Bank’s smallest member country.
Despite such remote and tiny landscapes, the Pacific Island countries – including Fiji, Palau, Samoa, Tonga, Vanuatu, Solomon Islands, Marshall Islands, Papua New Guinea, the Federated States of Micronesia and Timor-Leste – represent far more than meets the eye.
Indonesia’s national statistics agency (Badan Pusat Statistik, BPS) released quarterly national accounts statistics on February 5. Any quarterly data release creates a flurry of interest (well, at least amongst macroeconomists and economy-watchers hungry for the latest update on near-term growth trends). But this is a particularly important release because, as well as providing data for the final quarter of 2014, it also incorporates two significant revisions to Indonesia’s GDP statistics: (1) it shifts the basis of the computation from the year 2000 to 2010, and (2) it adopts a significantly updated methodology and presentation of the statistics (updating Indonesia’s national accounts from the 1993 System of National Accounts [SNA] to SNA 2008).
What do these revisions tell us about Indonesia’s economy that we didn’t know before? One change immediately stands out: total output in current prices is about 4.4 percent larger than previously estimated in 2014 (and 5.2 percent larger on average over 2010-2014). This is a significant change, adding IDR 448 trillion, or about USD 35.5 billion at the current market exchange rate, to the estimated size of the economy as of 2014. Roughly a third of the extra measured output is due to the incorporation of new kinds of economic activity under SNA 2008, and about two-thirds comes from more accurate measurements of previously-measured kinds of output, according to BPS.
Image "Pro Pit" by Aaron Webb is licensed under CC BY-NC-SA 2.0
“Never let an opportunity pass by, but always think twice before acting,” says a Japanese proverb with particular pertinence for East Asia today.
Plunging oil prices present a significant opportunity for most of the region’s developing countries to strengthen the competitiveness of their economies and take advantage of the ongoing global recovery.
The drop in oil prices — over 50% since mid-2014 — reflects several years of increasing oil supply, particularly in North America, along with decreased geopolitical risks to global production, OPEC’s efforts to maintain production levels and market share, and weaker-than-expected global growth last year. These factors are likely to persist, with oil prices expected to remain low through at least 2016.
Most countries in East Asia, including Japan, benefit from the price decline because they are oil importers. They can expect more rapid economic growth, lower inflation and improved current account balances.
If you could make one New Year’s wish for your country, what would it be?
For many Malaysians, Prime Minister Najib Razak’s wish for “a safer, more prosperous, and more equal society” likely resonated with their hopes for 2015.
Malaysians appear to be increasingly concerned about income inequality. According to a 2014 Pew Global survey, 77% of Malaysians think that the gap between the rich and poor is a big problem. The government has acknowledged that inequality remains high, and that tackling these disparities will be Malaysia’s “biggest challenge” in becoming a high-income nation.
How can Malaysia narrow the gap between the rich and poor? Global experience suggests two possible levers to achieve a more equitable income distribution.
Buildings now dot the skyline of Bonifacio Global City in Metro Manila, which hosts, among others, the offices of the World Bank and the International Finance Corporation. Who would have thought that this former military camp could be transformed into a bustling economic center in less than ten years? And, with the rise of commercial buildings and residential condominiums following the area’s fast-paced growth, we see a growing demand for electricity that causes stress on the environment and resources.
In 1954, the World Bank’s first mission report on Malaya – as the soon-to-be-independent country was called then – expressed concern about its development prospects. The mission was “favorably impressed with Malaya’s economic potentialities and prospects for expansion.” But it questioned whether the “rates of economic progress and additions to employment opportunities can move ahead of or even keep up with the pace at which the population and the labor force are growing.”
Sixty years and 25 million more Malaysians later, hindsight proved such worries overdone as income per capita climbed from USD 250 at the time of the report to over USD$10,000 today.
With its successful economic and social development, Malaysia is now actively moving into a new role as a global development partner—supporting other countries in ending poverty and sharing lessons from its journey to become a regional economic powerhouse. This new role is a natural fit for a nation in transition toward a high-income status, and a big gain for the rest of us.
Every minute, dozens of people in East Asia move from the countryside to the city.
The massive population shift is creating some of the world’s biggest mega-cities including Tokyo, Shanghai, Jakarta, Seoul and Manila, as well as hundreds of medium and smaller urban areas.
From my house in northern Quezon City, I drive more than two hours every day to get to the office in Bonifacio Global City, which is about three cities away where I come from, and two cities away from the capital Manila. It’s a journey that should only take around half an hour under light traffic. That is a total of four hours on the road a day, if there is no road accident or bad weather. It takes me an hour longer whenever I use the public transport system. Along with hundreds of thousands of Metro Rail Transit (MRT) commuters, I have to contend with extremely long lines, slow trains, and frequent delays due to malfunctions. This has been my experience for several years. Many of us might be wondering: why have these problems persisted?
When one thinks of businesses operating in countries that are still struggling to protect and provide for human rights, a narrative can easily spring to mind involving unscrupulous businesses happily taking advantage of weak labor laws, a lack of minimum wage and poor environmental controls. But, in many places, the reality is very different. Not only is the private sector itself adversely impacted by weak human rights protections but, more than this, businesses are themselves having to take up a leadership role to compensate for weaknesses that exist at a national level.
I began my professional career as a sub-district and district level administrator in India-a position that makes one responsible for pretty much everything- from making sure the water comes out of the taps and the garbage is collected in the morning to helping pull accident victims out from horrific accidents and facing down stone-pelting mobs. This early experience of being thrown into the deep end of the pool gives me a somewhat pragmatic sense of perspective and equanimity. But I still recall the horror and overwhelming grief that I felt when the full impact of the 2004 Tsunami started becoming clear. In Indonesia alone approximately 220,000 people lost their lives.