East Asia – a region that has transformed itself since the financial crisis of the 1990s by creating more competitive and innovative economies – must now turn to the urgent domestic challenges of inequality, social cohesion, corruption and environmental degradation arising from its success, a new World Bank report has found.

An East Asian Renaissance: Ideas for Growth by a World Bank team led by Chief Economist for East Asia & Pacific, Dr Homi Kharas and Economic Adviser, Dr Indermit Gill is the first comprehensive analysis of the new forces and challenges at play in the region since the Bank’s seminal report of 1993, The East Asian Miracle.

The final version of the report shows that having successfully undergone two waves of integration – first with global markets and then within the region itself – East Asia now needs to move to a third integration, this one at the domestic level.

Visit An East Asian Renaissance: Ideas for Economic Growth Web Page

The economic performance of East Asia since the late 1990s has been remarkable. The region has responded by increasing regional integration. Economies are growing, and societies are being transformed. But problems are emerging in domestic integration.

This book seeks to identify how East Asian governments should adapt development strategies to address these breathtaking changes.

Download An East Asian Renaissance: Ideas for Economic Growth

PDF format, 6.3MB, 382Pages.

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CONTENT:
Overview: The Unfolding of a Renaissance . . . . . . . . . 1
Growth, Gravity, and Friction. . . . . . . . . . . . . . . . . . . 45
Trade. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
Finance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195
Cities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 231
Cohesion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271
Corruption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 313

OVERVIEW
The Unfolding of a Renaissance

A Renaissance Unfolds

Less than 10 years ago, in 1997–98, a financial crisis brought four economies in East Asia to their knees. Many predicted that the structural weaknesses that the crisis laid bare—corruption, cronyism, nepotism—would condemn the region to stagnation as had happened in Latin America after a debt crisis in the mid-1980s. Emerging East Asia was expected to lose years of growth, just as Latin America had lost a decade. Instead, the growth record of the emerging economies of the region since 1998 has been remarkable: gross domestic product (GDP) has almost doubled, rising by over 9 percent per year, to reach US$4 trillion in current dollars by 2005.

Other indicators of performance are equally impressive. Exports have increased to one-fifth of the world’s total, or a value of more than US$2 trillion per year, making emerging East Asia one of the most open trading regions in the world. The region is the largest destination for foreign direct investment (FDI) and has US$1.6 trillion worth of foreign exchange reserves. Its capital markets have grown, and its domestic financial sector assets amount to US$9.6 trillion. There are 300 million fewer people living in poverty (measured as per capita expenditures of at least US$2 a day) now than there were in 1998. A middle class has emerged with a lively democratic voice in economic affairs. Business-friendly reforms are moving ahead throughout the region, and confidence in economic prospects is high.

An economic renaissance is unfolding in the region. Like the renaissance in Europe, a period of intellectual discovery that produced new ideas and economic development, innovation is getting similar attention in East Asia (see box 1). The pace of change in trade and finance, ideas and technology, urban development, household finances, and the demands on the public sector is breathtaking. If current growth trends prevail, East Asia will be as large in terms of the world economy (40 percent) by 2025 as it was in 1820, around the time that it began a long decline in global importance.

In a world in which development seems so ephemeral, how is it that a dozen countries in East Asia have all been successful? (The Democratic People’s Republic of Korea and Myanmar are the only exceptions.) Common economic characteristics cannot be the whole explanation since the diversity among these countries is enormous. Emerging East Asia includes China, with 1.3 billion people, and Mongolia with 2.5 million.

Per capita incomes range from US$400 in the Lao People’s Democratic Republic to US$24,000 in Singapore. Hong Kong (China) is perhaps the most laissez-faire economy in the world, while Vietnam is one of the few remaining socialist economies. What is going on? Is there something special about East Asia that makes these economies grow? ...

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