The Philippines is at a fork in the road. Despite good results on the growth front, trends observed in trade competitiveness, Global Value Chain (GVC) integration and product space evolution, send worrisome signals. The country has solid fundamentals and remarkable human assets to leapfrog into the 4th Industrial Revolution – where the distinction between goods and services have become obsolete. Yet it does not get the most out of this growth, especially with regards to long-term development prospects. In order to do so, the government will have to make the right policy choices.
In 1950, the average working-age person in the world had almost three years of education, but in East Asia and Pacific (EAP), the average person had less than half that amount. Around this time, countries in the EAP region put themselves on a path that focused on growth driven by human capital. They made significant and steady investments in schooling to close the educational attainment gap with the rest of the world. While improving their school systems, they also put their human capital to work in labor markets. As a result, economic growth has been stellar: for four decades EAP has grown at roughly twice the pace of the global average. What is more, no slowdown is in sight for rising prosperity.
High economic growth and strong human capital accumulation are deeply intertwined. In a recent paper, Daron Acemoglu and David Autor explore the way skills and labor markets interact: Human capital is the central determinant of economic growth and is the main—and very likely the only—means to achieve shared growth when technology is changing quickly and raising the demand for skills. Skills promote productivity and growth, but if there are not enough skilled workers, growth soon chokes off. If, by contrast, skills are abundant and average skill-levels keep rising, technological change can drive productivity and growth without stoking inequality.
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- Knowledge and Skills
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- East Asia and Pacific
- Solomon Islands
- Papua New Guinea
- Micronesia, Federated States of
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As we celebrate World Water Day, I find myself thinking about my work and one central question: how do you reach 8 million Filipinos with no access to clean water? I remember growing up in Pampanga, a province north of Manila, and visiting my aunt’s house every weekend where I had to pump water from a deep well and carry buckets so we could water plants, wash clothes, and clean the backyard pig pen. Fortunately, these days there’s always water from the faucet so we don’t work as hard to do chores.
But the story isn’t the same for everyone. While our local water utility largely improved its services over the years, I can’t say the same for the rest of the country, especially in rural areas. While there are already over 4,700 water utilities in the Philippines, about half are very small and unregulated.
As in much of the rest of the developing world, developing countries in East Asia and the Pacific (EAP) have made progress in closing many gender disparities, particularly in areas such as education and health outcomes. Even on the gender gaps that still remain significant, more is now known about why these have remained “sticky” despite rapid economic progress.
Ensuring that women and girls are on a level playing field with men and boys is both the right thing to do and the smart thing to do. It is right because gender equality is a core objective of development. And it is smart because gender equality can spur development. It has been estimated, for instance, that labor productivity in developing East Asia and Pacific could be 7-18% higher if women had equal access to productive resources and worked in the same sectors and types of jobs as men.
“So what now after the May 2016 elections?”
We asked this question at an event for the Knowledge for Development Community (KDC) network a few months before the May 9 national and local elections. The KDC was formed by the World Bank office in Manila in 2002 to promote knowledge sharing of development issues. It’s a network composed of 19 universities, non-government organizations and think tanks across the country. We turned to the largest segment in our network – students – and asked: “What do you want from your next leaders?”
Spearheaded by Silliman University based in the Visayas in Central Philippines, the KDC organized youth discussions in three cities in each of the major island groups: Luzon, Visayas and Mindanao. St. Paul University Philippines handled the discussions in Tuguegarao in Luzon, Silliman University for Dumaguete, and the Western Mindanao State University for Zamboanga based in Mindanao. The project involved 30 youth representatives in each city: 15 in-school and 15 out-of-school. Its composition was not just sensitive to, but also affirmed, the equal value of the out-of-school youth in development processes.
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.
In the last three decades, East Asia has reaped the demographic dividend. An abundant and growing labor force powered almost one-third of the region’s per capita income growth from the 1960s to the 1990s, making it the world’s growth engine.
Now, East Asia is facing the challenges posed by another demographic trend: rapid aging. A new World Bank report finds that East Asia and Pacific is aging faster – and on a larger scale – than any other region in history.
More than 211 million people ages 65 and over live in East Asia and Pacific, accounting for 36 percent of the global population in that age group. By 2040, East Asia’s older population will more than double, to 479 million, and the working-age population will shrink by 10 percent to 15 percent in countries such as Korea, China, and Thailand.
Across the region, as the working-age population declines and the pace of aging accelerates, policy makers are concerned with the potential impact of aging on economic growth and rising demand for public spending on health, pension and long-term care systems.
As the region ages rapidly, how do governments, employers and households ensure that hard-working people live healthy and productive lives in old age? How do societies in East Asia and Pacific promote productive aging and become more inclusive?
The days that I spent on the Big Cities project taught me how to handle different people from all walks of life, who were diagnosed HIV positive. Working there, I learned that HIV/AIDS does not choose its victims, whether rich or poor.
One of them happened to be my close friend. I really didn’t know how to tell him about his HIV status. It was hard… really hard to be his HIV counselor. It was difficult putting myself in his shoes, for example, when this diagnosis must’ve felt like the end of the world for him. But I knew that I had to be strong for my friend.
I wondered how I could help him if I wasn’t strong myself, so I promised him that I would do my best to support him, which was similar to what I do for other people living with HIV.
The latest cyclical warming of Pacific Ocean waters, first observed centuries ago and formally tracked since 1950, began earlier this year and already has been felt across Asia, Africa and Latin America.
Weather experts predict this El Niño will continue into the spring of 2016 and could wreak havoc, because climate change is likely to exacerbate the intensity of storms and flooding in some places and of severe drought and water shortages in others.
El Niño’s impacts are global, with heavy rain and severe flooding expected in South America and scorching weather and drought conditions likely in the Horn of Africa region.