The recent debate on whether it makes more sense to measure Gross Domestic Product (GDP) in Ringgit or in Dollars is a healthy one. It reflects a sound interest by many segments of Malaysian society in statistics that measure economic development and how it changes people’s living standards. This is the fundamental question: what does GDP really mean in the daily life of Malaysians. There are sound arguments on both sides and, in a way, both are right, depending on what perspective is taken.
Vietnam has achieved remarkably high and inclusive GDP growth since the late 1980s. GDP growth per capita increased three-and-a-half-fold during 1991-2012, a performance surpassed only by China. The distribution of growth has been as remarkable as its pace: the bottom 40% of the population’s share in national income has remained virtually unchanged since the early 1990s, ensuring that the rapid income gains got translated into shared prosperity and significant poverty reduction.
GDP growth, however, has been operating on a lower trajectory since 2008. This has led to questions regarding the sustainability of the growth process, and, with it, Vietnam’s ability to bounce back to about 7-8% per capita growth. Analysts have voiced concerns over declining total factor productivity growth and growing reliance on capital accumulation. Moreover, a number of competitiveness issues routinely get raised by private investors, including: a widening skills gap, limited access to finance, relatively high trade and transport logistics costs, an overbearing presence of the SOEs, and heavy government bureaucracy that makes it difficult for businesses to operate in Vietnam.
Kể từ cuối thập kỷ 80 của thế kỷ trước, Việt Nam đã có tốc độ tăng trưởng kinh tế cao với lợi ích bao trùm. GDP bình quân đầu người tăng 3,5 lần trong giai đoạn 1991-2012 — chỉ sau Trung Quốc. Cùng với tốc độ tăng trưởng, phân bố tăng trưởng cũng là một thành tích rất đáng ghi nhận: phần thu nhập quốc gia dành cho nhóm 40% dân nghèo nhất hầu như không thay đổi kể từ đầu thập kỷ 1990 tới nay, điều này đảm bảo rằng tăng trưởng kinh tế được phân phối cho mọi tầng lớp và giảm nghèo một cách đáng kể.
Tuy nhiên, kể từ 2008, tăng trưởng GDP đã đi theo một quỹ đạo thấp hơn. Qua đó đã nảy sinh một số câu hỏi về mức độ bền vững của tăng trưởng và liệu Việt Nam có thể khôi phục mức tăng GDP bình quân đầu người 7-8% hay không. Các nhà phân tích quan ngại về xu thế giảm tăng trưởng năng suất nhân tố tổng hợp và mức độ phụ thuộc ngày càng nhiều vào tích tụ vốn. Thêm vào đó, các nhà đầu tư tư nhân cũng thường xuyên nêu các vấn đề liên quan đến năng lực cạnh tranh như kỹ năng ngày càng thiếu, khó tiếp cận vốn, chi phí thương mại và kho vận tương đối cao, độc quyền của các doanh nghiệp nhà nước và bộ máy hành chính cồng kềnh gây cản trở hoạt động của doanh nghiệp.
Mongolia’s mining revenues are set to soar in the coming years, but here people talk about the need to save for the future.
Surely building infrastructure, educating young Mongolians, improving healthcare and creating jobs is important? Surely by achieving these development goals Mongolia is providing for the next generation? These are great questions. Mongolia must do these things. But they in turn depend on efforts to prevent boom and bust and provide financial assets for future generations. Saving some of the revenues in good times is part of effective natural resource management.
Available in: монгол хэл
There is good news coming out of Mongolia, the land of the eternal blue skies. The economy racked up a second quarter of high growth: the third quarter came in at 20.8 percent, topping the equally amazing second quarter of 17.3 percent (year-on-year GDP growth), as discussed in the World Bank's latest Mongolia Quarterly Update. And while this growth spurt originated in the mining sector, with Oyu Tolgoi—a mega copper and gold mine—getting ready to start producing in 2012 and a whole battery of other, smaller mines producing at full capacity, the high growth is quite broad-based. Even manufacturing is doing well.
(Available in Chinese)
This is the first blog post I write after revisiting China’s recent economic developments, the outlook, and policy implications as part of writing our latest China Quarterly Update. After this general overview I will in a few days write one on some interesting medium term trends on relative prices and the relative importance of external trade in China’s economy (they are also discussed in the Quarterly).
The term “normalization” has been used a lot lately in relation to the composition of growth and macroeconomic policy stance, also in China. But it is hard to avoid it. During 2010, China’s composition of growth started to “normalize”—as in look like it typically does—after the spectacular developments in 2009, when a massive government-led domestic demand surge offset a huge contraction in exports. Later in 2010, the macroeconomic policy stance also started to “normalize”. I guess many of us use the word “normalization” to describe or prescribe a macro policy stance that would be in line with the “normalized” economic outlook, as opposed to a particularly tight stance.
(Also available in Chinese)
As an economist monitoring the macroeconomic developments of the Chinese economy, dealing with data is one of my main jobs. I am so happy that now I have a new tool to handle data and make economic analysis. It is the World Bank Open Data platform launched recently. Based on my user experience till now, I found two features of it are specially worth highlighting:
The rapidly rising economic weight of developing countries – now in its third decade, rather than a product of the crisis, is notable for several interrelated developments:
• Developing economies as a whole have been growing faster than advanced economies since the 1970s, on both aggregate and per capita terms. (Read more about growth poles - .pdf)
• The margin between these growth rates has risen of late, although growth paths have become more synchronized. Decoupled in trend terms, more coupled in cyclical terms? (There is an abundant discussion of “decoupling”: see one example here and one here)
A couple of weeks ago the Bank released its half-yearly economic assessment of developing countries in the East Asia and Pacific region. The report confirmed the robust recovery of the region's economies overall, but flagged a number of emerging risks, particularly around the return of large capital inflows and appreciating currencies.