Just as Asian economies started to recover from the global recession, policymakers and markets have started to worry about unwarranted asset price increases.
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 serves as a platform for discussion and the sharing of knowledge.
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
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.
The economic data for the third quarter of 2009, released almost two weeks ago, confirmed an impressive recovery in China’s economy, supported by very large fiscal and monetary stimulus. Real GDP growth rose to 8.9 percent year-on-year in the third quarter. This is clearly good news, for China and many other countries whose economies are benefiting at the moment from strong demand from China. As the World Bank economic team for China (which I'm part of) argues in more detail in the new China Quarterly Update, it also means that it is time to consider a less expansionary macroeconomic policy stance and focus more on the structural reforms needed to rebalance the economy and get more growth out of the domestic economy on a sustained basis.
It’s not as if China has not been hit by the global recession. China’s real economy has been hit hard. Exports fell sharply since November last year, and the contribution of net external trade to GDP growth was minus 3.6 percent points in the first three quarters of this year – with the negative contribution particularly large in the third quarter (in year-on-year terms).
Editor's note: This post is part of Blog Action Day on climate change. For more information, visit blogactionday.org.
Apologies for having been out of touch since Carbon Expo. I needed a break, and summer in Croatia proved one can have a life beyond international development and carbon finance. Climate change, however, very much stayed on my mind with reports of wildfires in the United States and Greece. Clearly, one cannot escape all-encompassing global change, in particular when negotiations have now started in earnest on a post-2012 treaty to reduce carbon emissions and provide financing for developing countries.
Some still think that climate change is just a buzz topic and will quietly disappear from global attention. Let me assure you that many people in East Asian and Pacific countries would disagree. They are hit by natural disasters, which in recent years not only steadily increased in frequency, but also in intensity.
|Red deer from the Mongolia Red List for Mammals.|
The Red Books and Red Lists, produced regularly by the International Union for Conservation of Nature, are fundamental tools in the monitoring of the conservation status of the world’s animals and plants. On publication, the news they generate is very significant but generally rather depressing. However, these global Red Lists have their limitations at national levels – when species are nationally very common but globally threatened – or when species are very rare and threatened, with no global conservation concern whatsoever.
Take the Red Deer in Mongolia for example. Globally this is formally of ‘Least Concern’ (pdf) – the lowest category – because it has an enormous range, is managed for hunting in many countries, and effectively protected in others. But in Mongolia, its status is the highest possible ‘Critically Endangered’ (pdf).
As China’s economy seems to be recovering, many people here have expressed concerns about inflation. I was able to air my views on the subject in an Op-Ed in China’s main English language newspaper, the China Daily, together with two other experts.