Wednesday, May 28, 2008

Links of Interest

The Festival of Economics: An Antidote to Fear

Special Report: China In Africa

China strengthens rail link with Nepal

Google, Yahoo, Microsoft: antitrust confusion

Narayanhity royal palace to be turned into national museum

CA members sworn in at BICC

Oil exporters lead continent's strong economic growth

Nepal requests India to waive duty on steel

The Growth Report on Asia

  • Nine of the 13 countries that have been successful in achieving sustained high growth are from Asia: China, Hong Kong (China), Indonesia, Japan, Korea, Malaysia, Singapore, Taiwan (China) and Thailand.
  • These nine high-growth countries all share common characteristics: engagement with the global economy, macroeconomic stability, high rates of saving and investment, the market allocation of resources, and credible and capable governments.
  • Many of these Asian economies (Hong Kong, Japan, Korea, Singapore, and Taiwan) grew all the way to high-income levels.
  • The region seems to be able to anticipate and change its policies on growth, Korea’s evolution from labor-intensive manufacturing to a more knowledge-based and capital-intensive economy being one example.
  • Asia’s saving rates are seen as a strong engine for growth, with many Asian countries having saving rates 20 percentage points higher than Latin American countries, for example.
  • High savings rates in Asia are due to macroeconomic stability, fewer dependents to take care of, and more direct measures, such as mandatory saving schemes.
  • Foreign Direct Investment and the transfer of knowledge are very successful in Asia, one example being Malaysia, which has attracted multinationals to its three electronics clusters.
  • Public investment in infrastructure is also viewed as a hallmark of many Asian economies accounting for 5 to 7 percent of GDP or more.
  • Resource mobility is also seen as key, with governments not resisting the market forces that pull people into the urban areas. In Malaysia, agriculture’s share of employment fell from 40% in 1975 to 15% in 2000.
  • Growth requires committed, credible and capable governments. Reform teams in countries, such as Singapore, Japan and Korea, were able to chart a program for growth.

Recommendation for Asia:

  • Establishing a mechanism to coordinate policies of the growing number of influential countries – particularly in Asia - and to safeguard the stability of the global financial system.
There is good event on discussion about about the report at PIIE (organized by CGD). The full report is here. It would be interesting to hear what Hausmann and others have to say about this big report. Here is what Larry Summer has to say about similar report launched earlier.