Asia's Developing Future

Developing Asian countries must introduce more comprehensive public welfare programs for the elderly as their economies transition from traditional filial altruism and the extended family to parental altruism and the nuclear family. As an economy develops, increasingly large amounts of resources are transferred from working adults, who produce more than they consume, to their parents and children, who consume more than they produce. Gone is the time when elders and children counted as parts of the labor force—children stay in school longer, and elders spend more and more time in retirement. Working adults in advanced economies transfer more of their income to dependent family members. Read the transcript http://bit.ly/2ADwwmi Read the working paper https://www.adb.org/publications/intergenerational-transfers-demographic-transition-altruism About the authors Yoshitaka Kodais a postdoctoral fellow of the Faculty of Economics at Chulalongkorn University, Bangkok, Thailand. ManachayaUruyos is an assistan

Indonesia’s economy grew rapidly over the past 30 years, in large part due to sweeping political and institutional reforms, the right mix of economic policy packages, and the development of fairer economic institutions, but progress made in reducing poverty and income inequality is faltering. In 1996, the richest Indonesians had six times more income than the poorest. In 2014, the richest had ten times more. The top 10 percent got more than 32.4 percent, with the top 20 percent getting 47.8 percent of income. Inequality in Indonesia and its economic growth over the past 2 decades is a consequence of the country's shift from agriculture to services without safeguards to protect vulnerable members of society. Read the transcript http://bit.ly/2hx4vRU Read the working paper https://www.adb.org/publications/two-decades-structural-transformation-and-dynamics-income-equality-indonesia About the authors Teguh Dartanto is head of the Poverty and Social Protection Research Group at the Institute for Economic and

Hit by the 1997–1998 Asian financial crisis, economies in Southeast Asia adopted unconventional monetary policy measures to ride out the financial storm, and were the stronger for it, teaching a few unorthodox lessons to developed economies left reeling by the global crisis a decade later. Central banks were initially at a loss about what to do, as share prices and asset values plunged, currencies and exports weakened, and investment capital fled—much as some central banks in advanced economies were during the global financial crisis of 2008. In Asia, Thailand chose to recapitalize struggling banks, while in Hong Kong, China, the strategy was to buy falling stocks on the share market, which it later sold carefully back into the market, distributing the profit to every taxpayer as a bonus of some $1,000. Public funding of bank recapitalizations in Thailand and the extraordinary purchase of equities in Hong Kong, China have elements of the unconventional monetary policy known as quantitative easing, which h

Around the world, researchers and analysts are closely watching the economic performance of the People’s Republic of China in the wake of its recent slowing growth and the possible impact of that downturn on developed and developing economies. The Asia and Pacific region is anxious, and the rest of the world has reason to worry about the consequences of a slowdown in the world’s second-largest economy. But the slowdown allows countries to fine-tune their trade and currency policies to better benefit from the PRC’s next growth cycle. Read the transcript http://bit.ly/2zwuqmX Read the working paper https://www.adb.org/publications/impact-prc-slowdown-global-economy Author Soumyananda Dinda is a professor at the Department of Economics, University of Burdwan, West Bengal, India. Know more about ADBI’s research on People’s Republic of China http://bit.ly/2ArkHMV

Developing countries are relatively well positioned as they expand their energy capacity, with a banquet of climate-clean, sustainable, and renewable sources to choose from, while developed countries try to overcome centralization and replace long-established fossil and fissile sources bound up in laws and regulations, a French energy expert says. About the speaker Magali Dreyfus has been a researcher at the French National Center for Scientific Research since 2013, and is affiliated with Center for European Research on Administration, Politics and Society, Lille University. She is a visiting fellow at the National Graduate Institute for Policy Studies in Japan. Read the transcript http://bit.ly/2ApDze8 Know more about ADBI’s research on energy http://bit.ly/2zq1SeV Watch Let's Turn on the Lights http://bit.ly/2m4oqg8

Since the early 20th century, emerging Asia has been subjected to the ebb and flow of lending from advanced economies. Since then the region has become more integrated into the global financial market, which has been exposed to the risk of capital flow reversals. In the aftermath of the 2008 global financial crisis, capital has flowed into emerging economies, especially in Asia, in search of higher returns on investment. Low interest rates in advanced economies made Asia more attractive, with its higher interest rates promising bigger returns. This worries the region’s policy makers. Portfolio investments are more volatile and short-lived than long-term foreign direct investments. A surge in inflows harms recipient countries, as asset prices soar, and a sudden withdrawal of capital destabilizes markets. Read the transcript http://bit.ly/2yniDUp Read the working paper https://www.adb.org/publications/correlations-equity-markets-asia-and-impact-capital-flow-management-measures Author Pornpinun Chantapac

Poverty among the elderly in developing countries such as India is on the rise as the traditional extended family unit dissolves, fertility rates decline, migration to urban jobs rises, and government attempts to improve aged care have left many falling through the gaps. A small minority of workers in the formal sector are secure, but the vast majority of informal sector workers face poverty in their old age because they lack social protection. To improve the income security of the elderly poor, the Indian government introduced the National Old Age Pension Scheme in 1995, a cash transfer to mitigate poverty faced by the elderly. Read the transcript http://bit.ly/2zy3pMA Read the working paper https://www.adb.org/publications/targeting-social-transfers-are-india-elderly-poor-left-behind Author Viola Asri, a PhD candidate at the University of Zurich and a visiting doctoral researcher at the Laboratory for Effective Anti-Poverty Policies at Bocconi University in Milan Know more about ADBI’s research on p

It’s been nearly a decade since the 2008 global financial crisis, and world economic growth rates are almost back where they were after a long, painful but instructive haul, and both developed and emerging economies have added a lot to their financial tool kits. The International Monetary Fund predicts growth in developed countries will drop from the pre-crisis 2.2 percent to 1.5 percent, and in emerging economies from 7.5 percent to 5 percent between 2015 and 2020. While high unemployment, huge debt in developed countries, excessive debt of enterprises in emerging economies, and overcapacity are to blame, declining productivity is another major culprit. Read the transcript http://bit.ly/2z45gNb Read the blog post https://www.asiapathways-adbi.org/2017/09/what-are-the-policy-options-for-reversing-productivity-decline/ Author Li Xu is a research fellow at ADB https://www.adb.org/adbi/about/staff-profiles/li-xu Know more about ADBI’s research on productivity growth http://bit.ly/2gCi99o

Parents in developing Asia tend to spend more on sons but receive higher returns from daughters, turning on its head an age-old belief that sons—not daughters—take care of their aging parents. This is true in the People’s Republic of China, where children are expected to help their parents based on Confucian philosophy, which values filial piety and altruism. Data show that investments in daughters paid off better than money spent on sons. Daughters gave back to their aging parents financial support, and helped with tasks like shopping, housekeeping, accounting, food preparation, telephone calls, and transportation. Read the transcript http://bit.ly/2zyDip4 Read the working paper https://www.adb.org/publications/son-biased-investments-and-old-age-support Author Christine Ho, School of Economics, Singapore Management University Know more about ADBI’s research on supporting the elderly http://bit.ly/2z39tkb

Low-skilled workers in Viet Nam are hardest hit by market reforms and technology, with efficiency coming at the cost of jobs. Exposure to foreign markets and access to digital technologies raise demand for different types of skills, and while it has been good for the economy, more and more workers are being left behind. Read the transcript http://bit.ly/2iiGGkd Read the original report https://www.adb.org/publications/impact-trade-and-technology-skills-viet-nam About the authors Jennifer Poole, American University and Institute of Labor Economics (IZA) Amelia Santos-Paulino and Maria Sokolova, United Nations Conference on Trade and Development Alisa DiCaprio, ADBI research fellow at the time the report was published Read more about ADBI's research on Trade: http://bit.ly/2ytVl1X Viet Nam: http://bit.ly/2zeIo9M Technology: http://bit.ly/2ijiqyr

Asia and the Pacific are home to 4.3 billion people, and half the world’s urban population, with 120,000 people moving to cities every day, creating daily demand for 20,000 affordable homes. Some cities, where housing is scarce and costly because they don’t have enough land or they’re where the jobs are concentrated, find it hard to provide enough public housing for a continuously rising urban population. Hong Kong, China; the Republic of Korea; and Singapore have wrestled with this problem for decades. Read the transcript http://bit.ly/2goPbKh Read the original blog post https://www.asiapathways-adbi.org/2017/08/housing-policy-in-the-republic-of-korea/ About the authors Kyung-Hwan Kim is vice minister for land, infrastructure and transport, Republic of Korea Miseon Park is an associate research fellow, Korea Research Institute for Human Settlements. Additional information is from the following From Slums to Sustainable Communities (https://www.habitat.org/sites/default/files/issue-paper.pdf) Tackling

Peer-to-peer lending is an emerging form of finance enabled by the Internet, matching investors with borrowers to get around rigid bank requirements faced by small and medium-sized enterprises—SMEs—and start-ups. Borrowers apply to a peer-to-peer—P2P—platform of investors. The platform assesses the borrower’s credit risk and gives a credit score based on the platform’s own credit rating model. Investors then split up their money and lend it to borrowers, usually depending on the maturity of the loan and the risk entailed. Read the transcript http://bit.ly/2xL5QyY About the speaker David Storey was an analyst at the Asian Development Bank Institute at the time he presented his research. He is pursuing further studies at Warwick University, UK. Know more about ADBI’s research on SMEs http://bit.ly/2kVLk8U

The idea of sharing future tax revenues with private investors is being promoted by the Asian Development Bank Institute—the ADBI—in Tokyo to help finance the region’s huge demand for infrastructure. But Naoyuki Yoshino, the dean of the institute, warns that future revenues need to be sustained for such financing to succeed in the longer term. Japanese private railway companies played a major role in expanding the country’s transport sector in the 20th century. These companies were much more profitable than Japan National Railways, the public railway operator that was split up into seven private companies three decades ago after incurring massive public debt. Read the transcript http://bit.ly/2yV3gCA About ADBI dean, Naoyuki Yoshino https://www.adb.org/adbi/about/dean Watch an ADBI video about spillover effects http://bit.ly/2eZaTQM Know more about ADBI’s work on spillover effects http://bit.ly/2vVF81w

Remittances to developing countries in Asia help improve their economies with the net gains from exporting labor, and improve the lives of the poor people forced to work overseas—often for decades—because jobs are lacking at home. A small gain in the contribution of remittances to gross domestic product has led to huge declines in poverty in 10 developing countries, notably Bangladesh, India, Nepal, Pakistan, and Sri Lanka in South Asia; and the People’s Republic of China, Indonesia, Malaysia, the Philippines, and Thailand in East and Southeast Asia. A 1% rise between 1981 and 2014 parallels with a 22.6% decline in the poverty gap ratio and a 16.0% decline in the poverty severity ratio—taking into account the average poor household’s spending and the minimum income needed to pay for basic everyday needs. Read the transcript http://bit.ly/2xtH4Do Read the blog post https://www.asiapathways-adbi.org/2017/08/international-remittances-and-poverty-reduction/ Read the working paper https://www.adb.org/publicat

Economic corridors forming around the Greater Mekong Subregion have opened the way to greater development as better infrastructure leads to improved roads and bridges between neighbors. The corridors are boosting economic growth in the GMS, and promoting intraregional trade and investment for Cambodia, Lao People’s Democratic Republic, Myanmar, Viet Nam, Thailand, and Yunnan Province and the Guanxi Autonomous Region in the People’s Republic of China. Questions remain about the net benefits after the high cost of infrastructure; how evenly the benefits are spread; and how border security can be maintained in the face of trafficking of people, drugs, timber, wildlife, weapons, and black market goods. Read the transcript http://bit.ly/2xvHJ2l Read the working paper http://bit.ly/2y6Etia About the author Manabu Fujimura, a professor at Aoyama Gakuin University, Tokyo. Know more about ADBI’s work https://bit.ly/2SkWboG

Ha Noi, the Vietnamese capital, is renowned for its congested traffic. The government wants to build a third ring road around the city. But it doesn’t have enough money for such a major project, with two other ring roads already under way. Some of the construction is being funded on a BOT basis—build, operate, transfer, whereby the investor constructs and maintains the ring road and gets the toll revenue for a certain period before handing it back to the public—and official development assistance from the Japan International Cooperation Agency. However, private investors aren’t much interested because the expected returns on investment are too low. How can the government increase the returns to make investment more attractive to private companies? Read the transcript http://bit.ly/2wsCssC About ADBI dean, Naoyuki Yoshino https://www.adb.org/adbi/about/dean Watch an ADBI video about spillover effects http://bit.ly/2eZaTQM Know more about ADBI’s work on spillover effects http://bit.ly/2vVF81w

Think tanks try to influence the powerful—people who hold government office and make decisions—by independently speaking the truth and not being afraid to do so. Adam Posen, president of the Peterson Institute for International Economics, a Washington think tank, says that doesn’t seem to be enough these days. Read the transcript http://bit.ly/2kfLNSX Watch the complete presentation http://bit.ly/2yCzvGD Know more about the Global Think Tank Summit https://www.adb.org/news/events/global-think-tank-summit-2017

Japanese banks, insurance companies, and pension funds are investing in the US and other financial markets, due to the low or even negative interest rates at home. But their demand is pushing up the price of hedging, so when their dollars get converted back into yen, they lose money along the way. Robert McCauley, senior adviser at the Bank for International Settlements, told the audience at the Asian Development Bank Institute’s Annual Conference 2016 that strong demand by Japanese entities was pushing up the price of yen–dollar swaps, an instrument to hedge foreign investment. In short, it’s becoming more expensive for Japanese investors to get out of yen and into dollar. Read the transcript http://bit.ly/2yieiFV Watch the full presentation http://bit.ly/2xTMvdW Know more about ADBI’s work on low interest rates http://bit.ly/2xMCRI1

As the People’s Republic of China — the PRC — develops its “Go Global” suite of policies, it has expanded international capacity cooperation as a way to adjust to the “new normal” of low industrial growth. It’s a novel approach to overcapacity — where an industry is capable of building or producing more than it can sell — which was caused in the PRC by the 2008–2009 spending stimulus that flooded traditional industries. Steel, cement, aluminum, paper, glass, and everything from pork production to robots are in 2017 overwhelmed by cyclical overcapacity. Extending the lifespan for reform in the PRC’s industrial economy by moving production offshore from industrial-policy-protected provinces into the global system is an innovative solution to the country’s industrial slowdown. Read the transcript http://bit.ly/2xqb1Dv Read the blog post https://www.asiapathways-adbi.org/2017/07/the-prcs-international-capacity-cooperation-exports-both-industrial-capacity-and-financial-risk/ Author Tristan Kenderdine https://

Obesity and overweight are among the main risk factors of noncommunicable diseases that kill millions of people worldwide. How much do these diseases cost health systems and economies? In the United States, every obese person spends about $2,741 a year for additional health care. In Japan, overweight and obesity cost $1,537 a person. US businesses spend about $66 billion because of the absenteeism and lower productivity caused by overweight and obesity. The numbers are similar for European countries. Read the transcript http://bit.ly/2xtM7k6 Read the report https://www.adb.org/publications/imminent-obesity-crisis-asia-and-pacific-first-cost-estimates Authors Matthias Helble, ADBI senior economist and co-chair of the Research Department https://www.adb.org/adbi/about/staff-profiles/matthias-helble Kris Francisco, ADBI research associate at the time the report was published Know more about ADBI’s work on overweight and obesity https://www.adb.org/adbi/search/year/2017?keywords=obesity Read a related ADBI