Asia

Leveraging Asia’s investment potential for a green recovery

Development Matters Asia, Green transition , ,

By Jong Woo Kang, Principal Economist, Economic Research and Co-operation Department, Asian Development Bank (ADB) and Rolando Avendano, Economist, Economic Research and Co-operation Department, Asian Development Bank (ADB)

Developing Asia is estimated to have fended off the scarring impact of investment decline relatively well during the pandemic compared to other developing regions such as Latin America and Africa. For example, the People’s Republic of China and India still posted a positive growth rate in FDI in 2020. Meanwhile global FDI flows collapsed in 2020, falling by 35%, their lowest level since 2005, according to the UN. The impact was felt the most in developed countries where FDI declined by 58%, while developing countries weathered the storm better, with an 8% decline. Latest estimates for the first quarter of 2021 suggest an overall 10% decline for global FDI flows and 12% for Asian FDI inflows, according to firm level data. Adding to this is the fact that the pandemic has prompted economies, in the region and globally, to implement stricter screening and regulatory measures to oversee FDI. While the arguments for these restrictive measures are compelling from the perspective of national security or public health, economic impact and implications should be taken into account. Policy makers in the region could also seize the moment as an opportunity to introduce higher social and environmental standards for investment. 

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The European Union as a development superpower

Development Matters Asia, Development in Transition, Reviving multilateralism , , , ,

By Ambassador Dr Mohan Kumar, Chairman, RIS, Dean/Professor, Jindal Global University, Sonipat, India, Former Indian Ambassador to France1

It is a truism that the European Union (EU) welcomes, prefers and supports a multipolar world; a strategic world view that is fully shared by its partners like India. More fundamentally, it is in the interest of the EU and its like-minded partners to ensure that the international order is not underpinned by a G2 system of government where the rules are essentially shaped by the US and China. This, however, entails the EU being strong enough to occupy an independent pole in the multipolar system. The EU is not quite there yet, but its friends and partners will certainly wish this to occur, sooner rather than later.

The other strategic dictum that is worth noting is this: a multipolar world is scarcely possible without a multipolar Asia. And a multipolar Asia is not necessarily a given; it needs to be ensured with collective action based on an agreed set of rules. It is my view that the EU has an important role in ensuring that Asia remains multipolar.

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Quatrième révolution industrielle et migrations : comment assurer la transition dans les pays d’origine et de destination ?

Development Matters Asia, Français, Migration, New social contract, Reviving multilateralism ,

Par Jason Gagnon, Économiste du développement et Catherine Gagnon, Stagiaire, Centre de développement de l’OCDE

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Avec l’arrivée de nouvelles technologies qui brouillent les frontières entre sphères physique, numérique et biologique, un changement spectaculaire dans la façon dont nos économies et nos sociétés interagissent, produisent et communiquent est en cours. Et comme nos économies sont aujourd’hui plus que jamais interconnectées, cette révolution industrielle a lieu dans pratiquement tous les coins du monde. Parallèlement, les migrations internationales n’ont jamais été aussi nombreuses.

Ces deux mégatendances ont une forte interaction qui va considérablement modifier la mondialisation telle que nous la connaissons. Les pays du Conseil de coopération du Golfe (CCG) en sont une belle illustration : à la fois tournés vers un nouveau modèle économique, ils restent très dépendants de la main-d’œuvre migrante, notamment d’origine d’Asie du Sud et du Sud-Est. Des mesures politiques concrètes doivent donc être mises en place dans ces pays d’origine et de destination pour permettre une transition plus fluide au niveau mondial.

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The fourth industrial revolution and migration: how to ensure a smooth transition?

Development Matters Asia, Migration, New social contract, Reviving multilateralism ,

By Jason Gagnon, Development economist and Catherine Gagnon, Intern, OECD Development Centre

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A dramatic change in the way our economies and societies interact, produce and communicate is underway as a fusion of technologies blurs the lines between the physical, digital, and biological spheres. And with our economies more globally interlinked today than ever, this industrial revolution extends to practically every corner of the world. Meanwhile another sweeping trend is gaining traction: international migration is at an all-time high as new host countries, routes and freshly skilled workers multiply, and as a young population eager to make a mark on the world continues to grow.

The two megatrends of technology and international migration have the potential to significantly change globalisation as we know it. The Gulf countries offer an illustration of the especially pronounced interaction between both trends. On one hand, Gulf Cooperation Council (GCC) countries have made it a priority to usher in this new economic era. On the other, GCC countries are some of the world’s most dependent countries on migrant labour. How can GCC countries ensure a smooth labour market transition as they shift to this new economic model? And how can the primary migrant countries of origin to the GCC – mostly in South and Southeast Asia – navigate the changes they will face in the main destinations for their labour migrants?

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Amid cyclones and COVID-19, Vanuatu makes bold decision to graduate from ‘least developed country’ category

Development Matters Asia, Building resilience , , ,

By Violeta Gonzalez Behar, Head of Partnerships, Outreach and Resource Mobilisation, Enhanced Integrated Framework (EIF), World Trade Organization & Michelle Kovacevic, Communications Specialist and Consultant for EIF

Fresh fruit and vegetable market in Port Vila, Vanuatu. Photo: Shutterstock

On 4 December 2020, Vanuatu shed its official classification as one of the world’s least developed countries (LDC). This significant milestone – called ‘graduation’ – is something that only five other countries have managed to achieve in the last 40 years. And Vanuatu’s graduation achievement may be the most impressive of all given that, over the past few years, not only has it has weathered significant economic and social fallout from repeated natural disasters, but also a major drop in tourism revenue due to border closures during the global COVID-19 pandemic.

At this time of exacerbated economic vulnerabilities, some have questioned whether this is the right time for Vanuatu to leave its LDC status behind. Indeed it is a courageous choice – on the surface it may seem that there is more to lose than gain from graduation. Graduating countries usually surrender international support measures earmarked for LDCs such as preferential market access, targeted multilateral aid funding, free legal advice and technical assistance from some United Nations agencies, as well as travel support to attend international UN meetings.

While the impact of losing international support measures will depend on what goods a country exports, the trade agreements it is part of, and other factors, the UN’s Committee for Development Policy’s (CDP) LDC graduation impact assessments have shown that the loss of these measures doesn’t actually make much of a practical difference.

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Risk, resilience and recalibration in global value chains

Development Matters Asia, Building resilience , ,

By Adnan Seric, Michael Windisch, UNIDO, Holger Görg, Wan-Hsin Liu, Kiel Institute for the World Economy 1

Figure 1 – Number of new trade policy interventions implemented each year. Note: Reporting lag-adjusted statistics. Source: Global Trade Alert

COVID-19 supply chain disruptions provide an unprecedented opportunity to examine the resilience of global value chains. Data on trade flows and manufacturing output over the course of the pandemic suggest that the supply chain disruptions of early 2020 were of a temporary nature, and that extended global value chains currently interlinking many firms and economies seem to be resilient to trade and economic shocks at least to some extent.

Escalating geopolitical tensions and trade restrictions

Geopolitical tensions have risen, in a race to address the need for self-sufficiency—especially with regard to economic dependence on China—exemplified by the escalation in trade interventions in the lead-up to early December 2020. Close to 1,800 new restrictive interventions have been imposed in 2020 – over one and a half times the number in each of the two previous years, when the China-US trade dispute and a new wave of protectionism intensified (Figure 1)2. The adoption of discriminatory trade interventions outpaced liberalisations, despite the increase in new trade-liberalising measures during this period and the lifting of some emergency trade restrictions.

Amid rising US-China trade tensions in 2018-19, China already faced a particularly high increase in trade restrictions relative to other countries, which further intensified during the COVID-19 crisis. (Figure 2)

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Regional Comprehensive Economic Partnership: why should it involve the excluded LDCs?

Development Matters Asia, Building resilience, Development in Transition , , ,

By Mustafizur Rahman, Distinguished Fellow, Centre for Policy Dialogue (CPD)

The world’s largest trading bloc, the Regional Comprehensive Economic Partnership (RCEP), was signed in November 2020, counting 15 Asian member countries. Should the excluded countries, more specifically the low income and least developed countries (LDCs) of Asia, be worried about this development?

In recent years, the number of regional trading arrangements of various types, dealing with trade in goods or services or both, has been on the rise. 305 regional trade arrangements are already in force and the World Trade Organisation has been notified of another 496 currently under negotiation. However, the RCEP stands out for several reasons. The ten original members of the ASEAN Free Trade Area (Brunei, Indonesia, Philippines, Cambodia, Singapore, Lao PDR, Malaysia, Myanmar, Thailand and Vietnam) have now joined hands with five of the six countries with which ASEAN had bilateral free trade areas – China, Japan, South Korea, Australia and New Zealand. India opted out at the last moment, but the door has been kept open.

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Our top 10 blogs of 2020!

Development Matters Africa, Asia, Covid-19, Latin America and the Caribbean

In 2020 we posted 179 blogs! Here are the top 10 most read blogs of the year:

1. Landmark Supreme Court victory in Zambia: collecting millions in tax revenues and sending a message across borders

By Ignatius Mvula, Assistant Director – Mining Audit Unit, Zambia Revenue Authority, Mary Baine, Director – Tax Programmes, African Tax Administration Forum, and Ben Dickinson, Head of the Global Relations and Development Division, Centre for Tax Policy and Administration, OECD

The authors explain why a landmark Supreme Court victory in Zambia sends a message that African tax authorities are able and confident to take on and deal with complex transfer pricing transactions.

In French: Victoire historique devant la Cour suprême en Zambie : des milliards de dollars US en recettes fiscales supplémentaires et un message par-delà les frontières

2. COVID-19: consequences for international migration and development

Immigration-coronavirus

By Jason Gagnon, Development economist, OECD Development Centre

Jason Gagnon discusses how to minimise the short-term effects of the Covid-19 crisis on migrants and leverage the crisis to address the unfinished business of international co-operation on migration.

In French: COVID-19 : conséquences pour les migrations internationales et le développement

3. How China is implementing the 2030 Agenda for Sustainable Development

Photo by Robert Bye on Unsplash

By Xiheng Jiang, Vice-President of China Center for International Knowledge on Development (CIKD)

Xiheng Jiang discusses the key points of China’s Progress Report on Implementation of the 2030 Agenda for Sustainable Development (2019).

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Public health and migration: from the Postcolonial era to COVID-19

Development Matters Asia, Covid-19, Migration, New social contract , , , ,

By Ranabir Samaddar, Distinguished Chair in Migration and Forced Migration Studies, Calcutta Research Group

This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.
Photo: Juan Alberto Casado, Shutterstock

I wrote The Postcolonial Age of Migration in 2016-2019. It came out just two months ago as the pandemic continued (and continues) to rage in India and around the world. Global mobility came to a screeching halt and I have not yet seen the book in print. Locked down in my house and aware that the book had come out, I was driven to reflect on what I had written: did I do justice to our age, which I had described as the postcolonial age of migration? The book time and again goes back to colonial histories of war, plunder, changes in land use pattern, peasant dispossession, primitive accumulation, and their continuities in our time. Against this backdrop, the book discusses how the colonial practices of violence and border building are being reproduced today on a global scale. Wars, famines, and ecological changes are major driving factors behind migration and forced migration flows today. They also influence patterns of labour mobility. Yet as I reflected, the overwhelming reality of the COVID-19 pandemic brought home the realisation that the book does not account for epidemiological disasters as an integral part of the colonial history of migration and the postcolonial age of migration. The absence of any concern for migrant workers and refugees in public health structures should have been discussed. The book speaks of refugees’ health concerns in camps, yet the broader perspective of migrants and public health is absent.

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Prospects for Chinese and Mexican South-South co-operation post-COVID-19

Development Matters Asia, Covid-19, Latin America and the Caribbean , , , , ,

By Denghua Zhang, former diplomat and Research Fellow at the Australian National University and Carlos Cortés Zea, Coordinator of the AMEXCID-UNDP Co-operation Programme

This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.

The COVID-19 crisis is having profound impacts on the international political and economic order. It also provides an opportunity for stakeholders to reflect on past practices in each sector and learn from lessons to improve policies in the future. In this case, we examine the purposes, approaches and capacities of emerging providers (or Southern providers as some may call them) through the lens of China and Mexico—two major players in south-south co-operation (SSC).

Emerging providers, similar to traditional donors, provide aid to serve their own national interest. Motivations underpinning emerging providers’ efforts can vary significantly. The Chinese foreign aid programme is driven by a combination of factors including diplomatic competition with Taiwan, access to natural resources in recipient countries, image building as a responsible global power, and generating geopolitical support when its relationship with developed countries is strained. For example, China is currently taking a whole-of-government approach to conduct its COVID-19 diplomacy; an effort to improve its global image and garner support from developing countries in the face of growing pressure from developed countries over China’s handling of the crisis.  

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