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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 »

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The winds of change are blowing in Malaysia

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.

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

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.

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

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.

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

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.

Doing Business 2010: Indonesia, China and the Philippines among countries noted for at least one reform

Earlier today, the World Bank released its annual Doing Business report, which tracks business regulation reforms and ranks emerging economies on the “ease of doing business.” In East Asia and Pacific, 71 percent of the countries have undertaken at least one positive reform – with Indonesia being the region’s most active reformer, according to the report (pdf). Among other things, Indonesia cut the time required to start a business and the number of days to transfer a property.

Improving investment climate important to boost economic growth in Thailand

The investment climate is the fundamental socio-economic framework in which firms operate – the macroeconomic and trade policies they face, the labor and financial markets in which they recruit and raise money, the available infrastructure and imposed regulations, as well as all other areas of public policy impacting on private business.

In Thailand, the uncertain political situation since 2006 has negatively affected the country’s economy. The Productivity and Investment Climate Survey, which was fielded in 2007 at a time of great political instability and policy uncertainty, clearly reflected the pessimistic views of business managers. One interesting finding of the recently released Thailand Investment Climate Assessment Update is that instability and economic policy uncertainty became major issues – firms that perceived it a major or severe obstacle doubled from one-third in 2004 to two-thirds in 2007.

Internet usage in China jumps to 338 million people, latest data show

Internet usage in China continues to grow, and the latest figures released by the Chinese government’s Web research organization show that the total number of online users, at 338 million, surpasses the population of the United States. The impressive statistics – which reflect a 13.4 percent jump from 2008 – had a number of blogs and news sites buzzing late last week. The full report is available in Chinese here (pdf), and WSJ’s China Journal blog has a nice roundup of the findings in English here.

The growth in China – and the rest of East Asia and the world for that matter – is nothing new. Last year, we shared 2008 comScore statistics showing Asia’s internet audience growing faster than all other regions worldwide. And according to more recent information from comScore, the Asia-Pacific region has the highest global share of internet users, at 41 percent (although it’s important to note that the penetration rate of the region is only around 17 percent of the population – well below most other regions – according to this web stats site).

We’ve seen that increased connectivity through mobile phones and the internet may lead to improved economic growth, job creation and good governance, as well as other activities like mobile banking. And as more people, particularly in developing countries, get connected, this growth trend clearly seems to be a positive one.

Image credit: TimYang.net at Flickr under a Creative Commons license.

Convenient solutions to an inconvenient truth: How old-fashioned conservation helps deal with climate change

So much is being written about climate change. The heat is on, so to speak, to find new solutions to increasingly dire predictions from ever more detailed data and refined models. Many conservationists are setting great store by the promise afforded by RED (Reducing Emissions through Deforestation) and REDD (add Degradation). It is only a few more months before we learn whether the leaders of the world reach agreement of whether to move forward and unlock the money which could – forest governance permitting – cause a major boost to the funding and rationale for forest conservation.

Meanwhile, a new World Bank report has revealed that conservationists have actually been doing climate change projects all along; they just hadn’t realized it. New technological fixes aren’t essential to taking positive action.

Inquiring minds: Cambodian students worry about their country's future

It's been a very enriching experience to listen to the reactions of these 1200 or so college students.

Over the past couple of weeks, thanks to my colleagues Saroeun and Sophinith, I have traveled to various universities in Cambodia to present the findings of the World Bank’s growth report for the country. It's been a very enriching experience to listen to the reactions of these 1200 or so students. It was also nice to see the dynamism of these universities and these students.

Most interesting was the focus of their questions. Although the report is focused on medium- and long-term trends, many questions were about the impact of the global economic crisis. My answer: Cambodia is very exposed to the crisis given its openness and reliance on foreign investment, and despite the strong resilience of its rural economy.

There were also many questions about extractive industries. The answer is in Chapter 5 of the report: there remain considerable uncertainties about the potential in oil and gas and in mining, with in fact practically no major proven commercially viable reserve so far.

Bangkok's Skytrain an example of the good infrastructure and services Thailand needs

It takes me just a few minutes to get to my office roughly two kilometers away. Before the Skytrain came along, the very same journey could take anywhere between 15-45 minutes.

At 2:30 p.m. on a weekday, the Skytrain in Bangkok, Thailand, was still pretty crowded. I squeezed myself into a small space near the doors, waiting to exit at the next stop. Suddenly, a cheery sound of music wafted through the air before a woman, standing not far from me, shouted a "Hello" into her tiny cellular phone.

"I'm on the train, two stops away from you," she told the caller. "Will get there in a heartbeat."

That got me thinking. Getting somewhere in a heartbeat was – at least until 1999 – a luxury no Bangkokian could afford (unless they owned a private helicopter). I remembered when this city's traffic jams topped the list of things that would come to mind when people thought of Bangkok. (The next down in that list would probably be air pollution, but that's a subject for a later discussion!).