Following the massive earthquake in Jogjakarta, Indonesia, in 2006, the city and surrounding areas were faced with having to build or rehabilitate about 300-thousand homes.
The government had the option of hiring 1,000 contractors to build 300 houses each. Or we could have 300 thousand people working to build one house each - their own homes.
With the Government of Indonesia in the lead, we took the latter approach in supporting Indonesia’s efforts to rebuild communities. This is the REKOMPAK way.
What goes up must come down.
The end of the commodities boom is a wake-up call for Indonesia, as the reversal in economic transformation has adversely impacted employment growth in recent years. How can Indonesia continue to create jobs for its growing labor force?
Jobs in manufacturing and services offer a solution, as historical patterns of job creation have shown.
In the past 20 years (excluding the economic crisis of 1997-1999), manufacturing and services have been important sources of job creation, while employment in agriculture continues to decline. From 1990 to 2015, jobs in agriculture fell to 34% from 56% of all employment, while service sector work has surged to 53% from 34%, and manufacturing jobs have increased from 10% to 13%.
Thailand has come a long way and represents an impressive development story: it has drastically reduced the number of poor people from nearly 70% of the population in 1986 to 11% in 2013 and its economy grew at an average annual rate of 7.5% in the late 1980s and early 1990s, creating jobs that helped pull millions of people out of poverty.
However, challenges remain as there are still 11% – 7 million – of the population living below the poverty line, and another 7 million or so who remain highly vulnerable to falling back into poverty. Although inequality has declined over the past 30 years, the distribution in Thailand remains unequal compared with many countries in East Asia. Significant and growing disparities in household income and consumption can be seen across and within regions of Thailand, with pockets of poverty remaining in the Northeast, North, and Deep South. Today, the Thai economy faces headwinds, and growth has been modest. Export competitiveness is sliding, and a severe drought is expected to weigh on off-season rice production. Poverty is expected to continue to fall at a slower rate, with poor households concentrated in rural areas affected by falling agricultural prices. The country is now at a critical time since the new draft constitution won approval by a majority.
In the past several decades Malaysia has witnessed strong economic growth and has become one of Asia’s newly industrialized countries. In one generation it transitioned successfully from low to upper-middle-income status, due in large part to outward looking policies, trade, and foreign direct investments (FDI) — which contributed to the successful diversification of the economy. Today, Malaysia faces the challenge of escaping the middle-income trap as its productivity slows and it becomes less competitive.
Free trade agreements (FTAs) such as the Trans-Pacific Partnership (TPP) and Malaysia EU-FTA bring the potential for greater market access for Malaysia. This new generation of free trade agreements offers opportunities for Malaysia to strengthen reforms beyond tariff reduction, covering commitments such as competition and investment policies, non-tariff measures, intellectual property rights, labour standards, and opening up government procurement for competition. With a market-friendly government and a strong track record of reforms, there are new opportunities for reinvigorating structural reforms to support private sector-led economic growth. Accelerating productivity growth is a key element of the 11th Malaysia Plan, which aims to bring Malaysia to high income status by 2020.
The success story means the Southeast Asian nation that overcame a vicious civil war now is classified as a lower-middle income economy by the World Bank Group (WBG).
The new classification this year is based on thresholds set by the WBG in a system with roots in a 1989 paper that outlined the methodology. The table below shows the different levels of classification based on Gross National Income (GNI):
|Threshold||GNI in July 2016|
|Lower-middle income||$1,026 - $4,035|
|Upper-middle income||$4,036 - $12,475|