Since the mid-1980s, durable reforms coupled with prudent macroeconomic management have brought steady progress to the South Asia region, making it one of the world’s fastest growing regions. Real GDP growth has steadily increased from an average of about 3 percent in the 1970s to 7 percent over the last decade. Although growth trajectories varied across countries, reforms supported strong per capita income growth in the region, lifting over 200 million people out of poverty in the last three decades. Today, South Asia accounts for one-fifth of the world’s population and, thanks to India’s increasing performance, contributes to over 15 percent of global growth. Looking ahead, the authors find that South Asia is poised to play an even bigger role in the global economy, in both relative and absolute terms. India has overtaken China as the fastest growing large economy and South Asia’s contribution to global growth is set to increase, while more mature economies decelerate. Greater economic diversification, with an expansion of the service sector, improvements in education, and a still sizable demographic dividend are among the key elements underpinning this performance. Based on demographic trends, more than 150 million people in the region are expected to enter the labor market by 2030. This young and large workforce can be South Asia’s strength, if supported by a successful high-quality and job-rich growth strategy. Amid a changing global economic landscape, the authors argue that South Asia will need to leverage on all sectors of the economy in a balanced way, supporting improvements in agricultural productivity and a sustainable expansion of manufacturing, while promoting higher-skill services, to achieve this goal.
It is well known that Taiwan and South Korea, both former Japanese colonies, achieved rapid growth and industrialization after 1960. The performance of former European and American colonies (Malaysia, Singapore, Burma, Vietnam, Laos, Cambodia, Indonesia, and the Philippines) has been less impressive. Some scholars have attributed the difference to better infrastructure and greater access to education in Japan’s colonies. Anne Booth examines and critiques such arguments in this ambitious comparative study of economic development in East and Southeast Asia from the beginning of the twentieth century until the 1960s. Booth takes an in-depth look at the nature and consequences of colonial policies for a wide range of factors, including the growth of export-oriented agriculture and the development of manufacturing industry. She evaluates the impact of colonial policies on the growth and diversification of the market economy and on the welfare of indigenous populations. Indicators such as educational enrollments, infant mortality rates, and crude death rates are used to compare living standards across East and Southeast Asia in the 1930s. Her analysis of the impact that Japan’s Greater Asian Co-Prosperity Sphere and later invasion and conquest had on the region and the living standards of its people leads to a discussion of the painful and protracted transition to independence following Japan’s defeat. Throughout Booth emphasizes the great variety of economic and social policies pursued by the various colonial governments and the diversity of outcomes. Lucidly and accessibly written, Colonial Legacies offers a balanced and elegantly nuanced exploration of a complex historical reality. It will be a lasting contribution to scholarship on the modern economic history of East and Southeast Asia and of special interest to those concerned with the dynamics of development and the history of colonial regimes.
During the 1990s, the governments of South Asian countries acted as ‘facilitators’ to attract FDI. As a result, the inflow of FDI increased. However, to become an attractive FDI destination as China, Singapore, or Brazil, South Asia has to improve the local conditions of doing business. This book, based on research that blends theory, empirical evidence, and policy, asks and attempts to answer a few core questions relevant to FDI policy in South Asian countries: Which major reforms have succeeded? What are the factors that influence FDI inflows? What has been the impact of FDI on macroeconomic performance? Which policy priorities/reforms needed to boost FDI are pending? These questions and answers should interest policy makers, academics, and all those interested in FDI in the South Asian region and in India, Pakistan, Bangladesh, Sri Lanka and Pakistan.
Human capital is an important factor for economic growth in South Asia. Between 1981 and 2010, human capital contributed about 22% of annual gross domestic product per worker growth in India. During the same period, it contributed around 21% in Bangladesh, and 16% in Sri Lanka. However, education and skills remain the binding constraint. Raising the quality of education and skills in South Asia's workforce can play a critical role in catching up to the level of development of the People's Republic of China, the Republic of Korea, and other successful Southeast Asian economies. This study reviews the development of human capital in South Asia and analyzes contributing factors to human development including policies and strategies that countries in South Asia follow.
Indonesia, the world's fourth most populous country, is undergoing a profound transformation that could lead to a variety of outcomes, from the consolidation of democracy to return to authoritarianism or military rule, to radical Islamic rule, or to violent disintegration. The stakes are high, for Indonesia is the key to Southeast Asian security. The authors examine the trends and dynamics that are driving Indonesia's transformation, outline possible strategic futures and their implications for regional stability, and identify options the United States might pursue in the critical challenge of influencing Indonesia's future course. Steps the United States might take now include support for Indonesia's stability and territorial integrity, reestablishment of Indonesian-U.S. military cooperation and interaction, aid in rebuilding a constructive Indonesian role in regional security, and support for development of a regional crisis reaction force. A continued strong U.S. presence in the Asia-Pacific region will reinforce the U.S. role as regional balancer.
South Asia has performed well over the past 25 years in reducing poverty, improving human development and increasing growth, but faster progress with poverty reduction will require a higher rate of growth. This book shows that the development performance is not a puzzle but largely explained by good policies. Countries in the region have maintained good macroeconomic environments, opened up their economies to greater domestic and international competition, and reduced the role of corrupt and inefficient public enterprises.
Growth in developing Asia is holding up against external headwinds. Robust domestic demand supported the region's large economies, and oil prices above expectations boosted prospects for many oil and gas exporters. Consumer prices are picking up with rising global fuel and food prices, but moderate inflation in several Asian economies has kept the regional average in check. Downside risks to the outlook are intensifying. If tightened more than investors expect, US monetary policy could accelerate capital outflow from Asian economies and put further depreciation pressure on regional currencies. Any escalation of the trade conflict could disrupt cross-border production links. Most economies remain robust, but policy makers must be ready to respond. In the years since the Asian financial crisis of 1997–1998, sound domestic macroeconomic fundamentals and buoyant external conditions have supported developing Asia's rise to become an engine of the global economy. However, the changing global landscape poses new challenges to the maintenance of macroeconomic stability. This Update explores the key pockets of vulnerability and the policy options available to manage them. To fortify the region against heightened uncertainty, policy makers may need to deploy the full range of policy tools, while forging and safeguarding the sound fundamentals that support economic, social, and political stability.
This report analyzes how closer regional connectivity and economic integration between South Asia and Southeast Asia can benefit both regions, with a focus on the role played by infrastructure and public policies in facilitating this process. It examines major developments in South Asian–Southeast Asian trade and investment, economic cooperation, the role of economic corridors, and regional cooperation initiatives. In particular, it identifies significant opportunities for strengthening these integration efforts as a result of the recent opening up of Myanmar in political, economic, and financial terms. This is particularly the case for land-based transportation—highways and railroads—and energy trading. The report’s focus is on connectivity in a broad sense, covering both hardware and software, including investment in infrastructure, energy trading, trade facilitation, investment financing, and support for national and regional policies.
The countries that make up Southeast Asia are seeing an incredible resurgence in their economic power. Over the past fifty years, their combined wealth has reached the same level as the United Kingdom and, taken together, they are on track to become the fifth-largest world economy. But that stability and success has drawn the attention of the second largest world economy--China. The emerging superpower is increasingly involved in Southeast Asia as part of the ongoing global realignment. As China deepens its influence across the region, the countries of Southeast Asia are negotiating spaces for themselves in order to respond to--or even challenge--China's power. This is the first book to survey China's growing role in Southeast Asia along multiple dimensions. It looks closely and skeptically at the multitude of ways that China has built connections in the region, including through trade, foreign aid, and cultural diplomacy. It incorporates examples such as the operation of Confucius Institutes in Indonesia or the promotion of the concept of guangxi.China's Footprints in Southeast Asia raises the question of whether the Chinese efforts are helpful or disruptive and explores who it is that really stands to benefit from these relationships. The answers differ from country to country, but, as this volume suggests, the footprint of hard and soft power always leaves a lasting mark on other countries' institutions.