East Asia economies remains robust despite US slow down
15 Nov '07
4 min read
The Update notes that China has become a major export market for the rest of East Asia but warns that economies need to remain focused on finding new ways to meet China's ever changing and highly competitive market.
“The new challenge for China's East Asian neighbors will be in making the transition from supplying inputs for China's exports to also supplying its domestic market - something that might require significantly different research, production, branding and marketing skills and channels,” Brahmbhatt says.
According to the Update, emerging East Asia experienced its largest ever increase in foreign exchange reserves during 2007. Foreign reserves for the nine largest economies increased by $451 billion in the nine months to September 2007, reaching $2.5 trillion. About four-fifths of the regional reserve increase was in China.
“The region's ability to weather short- term global volatility should allow countries to remain focused on advancing their long- term development goals,” said Vikram Nehru, the World Bank's regional Chief Economist.
“East Asia's rapid growth has been primarily responsible for its remarkable success in lowering poverty. Maintaining this growth remains key and to this end, continued improvements in the investment climate, financial systems, public service delivery, and education and innovation systems remain priorities in much of the region.”
The poverty headcount rate at the $2-a-day level is estimated to have fallen to about 27 percent, down from 29.5 percent in 2006 and 69 percent in 1990. But, as the Special Focus in this Update on “Agriculture for Development in East Asia” explains, poverty has now become an overwhelmingly rural problem.
The widening gap between rural and urban incomes in many countries is one of the main reasons for increasing inequality at the national level. Governments in the region are therefore pursuing policies aimed at addressing the widening urban-rural income divide, by renewing their focus on rural and agricultural development policies, while also exploring ways to strengthen the development of human capital.
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