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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 »

recovery

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.

Growth in China continues to influence East Asia’s economic recovery, two new World Bank reports say

Submitted by James I Davison on Tue, 2009-11-03 23:10

Regionally speaking, developing countries in East Asia and Pacific have rebounded surprisingly quickly from the financial crisis and global recession. But according to a report just released by the World Bank, the regional economic picture isn’t as rosy when China is taken out of the equation. The latest East Asia and Pacific Update report, an assessment of the economic health of the region released every six months, is titled “Transforming the Rebound into Recovery.” The rebound, the report says, was driven in part by large and timely fiscal stimulus spending led by China and Korea. Still, despite the well-performing economies of Indonesia and Vietnam, developing East Asia excluding China is projected to grow at just around 1 percent in 2009. And for Cambodia, Malaysia and Thailand, GDP is contracting.

The China Quarterly Update – a separate report released at the same time as the latest regional assessment and focusing specifically on the Chinese economy – gives a more complete picture of why the country has seen such robust economic growth and what the future may hold. The Bank now projects China to see GDP growth of 8.4 percent for 2009, says the report. The report’s lead author (and blogger) Louis Kuijs wrote an accompanying blog post, which can be read here.

I really recommend taking some time to explore the findings of both reports by visiting the East Asia Update and China Quarterly pages, where you can also download high resolution graphs and watch video interviews with the economists. Also, you'll be able to ask two World Bank economists questions about the regional report in an online chat taking place Thursday, November 12, at 10 a.m. DC time (15:00 GMT or 11:00 p.m. in Beijing). Send your questions now for a better chance of getting them answered.

More Vietnam in pictures: fighting and mitigating natural disasters

Submitted by Claudia Gabarain on Fri, 2009-10-16 13:59

As advanced by my colleague James a few days ago, here's a second slideshow on natural disasters in Vietnam, this time showing prevention and mitigation measures put in place across the country. Again, the photos are striking. And the actions, varied and ingenious.

 

Vietnam in pictures: The human toll of natural disasters

Submitted by James I Davison on Wed, 2009-10-14 16:02

Some of my colleagues in the Vietnam office of the World Bank, working with Sai Gon Tiep Thi newspapers, recently organized a photo contest and exhibition on the topic of natural disasters. I thought I’d share some of the finalist entries, which are remarkable in their composition and relevance. It’s important to note that these pictures are not related to the disasters that have hit several East Asian and Pacific countries in recent weeks. Nevertheless, I highly recommend taking a few minutes to click through the pictures below, which focus on the human toll of natural disasters in Vietnam. Check back in a couple days for more photos from the same contest.

Are China’s banks having a "good crisis"?

Submitted by James Seward on Wed, 2009-10-07 15:17
The crisis certainly hit China hard, but the spillover to banks has been minimal thus far. Photo courtesy of randylane under a Creative Commons license.

The story of the current financial crisis is well-known now and much has been written.  Indeed, we’re now at the point where many observers are indicating that the crisis is now at an end.  It would seem that the immediate financial sector impacts are leveling off, but in many countries the economic recovery will likely take a long time.  However, a number of emerging markets have come out of the crisis in relatively stable shape.  China is the most prominent example.  In fact, one might say that China is having a “good crisis” in certain ways as it has lifted its prominence – it is the one large country seen as leading the world out of this global crisis.  The same applies for China’s financial system given that many of its banks are now the largest in the world and (at least on the surface) posting strong performance. 

Philippines flooding: Responding to a disaster in real time

Submitted by Abhas Jha on Wed, 2009-09-30 15:04
Flood affected areas in Metro Manila Region and Rizal Province, Philippines. Hi-res version. Canadian Space Agency Image processing, map created 29/09/2009 by UNITAR/UNOSAT.

Saturday morning, September 26, in Washington, DC: I am driving my daughter to class. I check my Blackberry and see an urgent email from Mukami, our Disaster Management team member in Manila, asking me to call her. (I need to stop reading emails at red lights. It’s probably against the law and it’s certainly obsessive).

I call Mukami on her cell-phone. She says that Manila has seen some of the worst flooding in its history after Typhoon Kestana dumped 16.7 inches of rain in just 12 hours on Saturday. The Government is immediately looking for satellite images to help in the search and rescue efforts. Some World Bank staff were still unaccounted for. She also asks about what other assistance the Bank can offer the Government in the aftermath of this disaster.

Regional Finance Roundup: Is East Asia leading the world out of the crisis?

Submitted by James Seward on Tue, 2009-09-29 16:30

Given that Asia is now widely seen as leading the world out of the crisis, it is fitting that the role of Asia was more prominently recognized in the global economic system in the recent G20 meeting held in Pittsburgh.  Since we last looked in July, the outlook for the emerging markets of East Asia has continued to brighten.  The latest regional forecasts come from the Asian Development Bank in its Asian Development Outlook (pdf) published last week.  It points to “the rapid turnaround in [Asia’s] largest, less export-dependent economies” and predicts that “the regional economy is now poised to achieve a V-shaped rebound.”  These are very positive words indeed!  As the graph below shows, the ADB has in fact upgraded its growth forecasts for a number of economies for 2009.

Although the signs are pointing upwards, performance is still mixed in a number of key areas.

Philippines: Surviving Tropical Storm Ondoy - Ketsana

Submitted by Dave Llorito on Tue, 2009-09-29 09:45
For 24 hours last Saturday, Typhoon Ondoy dumped 455 millimeters of rain on Luzon, causing massive floods and destroying lives and property in Metro Manila. (Photo courtesy of IRRI Images under a Creative Commons license)

Muelmar Magallanes, an 18 year-old construction worker, had already saved 30 people from the raging floodwaters last Saturday. Shivering and exhausted, he dived back into the murky waters to save a mother and a baby girl who were bobbing up and down among the floating debris and brought them to safety. Then he was gone, swept away by the torrents. His body was found the following day.

Magallanes is one of the more than 240 casualties caused by Tropical Storm Ondoy (international name: Ketsana). For 24 hours last Saturday, Typhoon Ondoy dumped 455 millimeters of rain (double the volume brought to New Orleans by Hurricane Katrina) on Luzon, causing massive floods in Metro Manila and the adjoining regions, destroying lives and property, and creating anguish and devastation in the metropolis.

Health restored? Uncertainty in forecasting Thailand's economic outlook

Submitted by Frederico Gil Sander on Tue, 2009-09-22 14:05

In Laos, the government has reportedly already healed the economy from the economic flu. But in Thailand, there seems to be more uncertainty about the health of the economy, and some commentators are not ready to call the recession over. The Thai economy contracted by 4.9 percent from the previous year in the second quarter of 2009, better than the 7.1 contraction posted in the first quarter. What can we expect for the rest of 2009 and 2010?
 
This is very timely question for all World Bank economists in East Asia, who are currently finalizing their forecasts for the upcoming East Asia and Pacific Update economic report, to be launched in November. On my end, I am writing this post from Cambodia, where I am meeting with palm readers, fortune tellers and other economic healers to ensure highly accurate forecasts. Let me offer a preview of what the soothsayers are saying.

China's import surge: standard economic theory prevails

Submitted by Louis Kuijs on Wed, 2009-08-05 17:07

When China’s government started to work on and implement its massive stimulus program in November last year in light of a rapid deterioration of the world economy, economists working on China had to work out what it all meant for China’s growth, the composition of growth, and the rest of the world.

Many foreign observers doubted that the stimulus would be effective enough to boost domestic demand in the first place. But even among those with higher expectations in this regard—like we at the World Bank—many wondered what the stimulus would mean for the rest of the world.

Usually, when one country grows much faster than other countries, we expect imports into that country to rise much faster than exports (or, fall much less). However, in the case of China, exports had for quite some time been outgrowing imports by a large margin and many were skeptical that this would change even as economic conditions were changing in a pronounced way.