Asia's Developing Future

The debate about the influence of exchange rates volatility on trade is intensifying, as US President Donald Trump attempts to blame the People’s Republic of China’s exchange rate policy for the US current account deficit. The link between exchange rates and trade is a complex one, and while there are several analyses of this relationship, none are considered definitive. Some experts say exchange rate volatility increases the uncertainty of companies about potential export profit, leading them to reduce exports, but that is theoretical. Others say a significant proportion of companies will increase exports, aiming to offset the loss on each exported unit. The latter explanation is strongly contested. Read the transcript http://bit.ly/2eTI5cI Read the blog post https://www.asiapathways-adbi.org/2017/04/how-does-exchange-rate-volatility-affect-value-added-and-gross-trade/ Author Yizhe Daniel Xie is a PhD candidate at the Graduate School of Asia-Pacific Studies, Waseda University, and a non-resident fellow at the CSIS Pacific Forum.

Obesity has reached world-wide epidemic proportions. Overweight and obesity weaken the body, hamper lower-body mobility, and impede daily activities. In older people, they cause physical dysfunction and increase the risk of disability. Overweight and obesity also raise the risks for ischemic heart disease, hypertension, stroke, diabetes, and certain cancers. Both conditions could severely undermine the economic and human development of the region, and seriously threaten the region’s prosperity. What can be done? Read the transcript: http://bit.ly/2iV9Nu5 Read the report: http://bit.ly/2rHNSZQ 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 https://www.adb.org/adbi/about/staff-profiles/kris-francisco Read a related ADBI blog post: Obesity in Pacific Island countries and territories: How big a problem is it? By Jillian Wate http://bit.ly/2xqE5b5

Muhammad Yunus believes the world must look again at what banks should be—and what they should do. The Bangladeshi Nobel laureate and founder of Grameen Bank also wants to upend our thinking about jobs and entrepreneurship. He sent a video message to the Global Think Tank Summit held in Yokohama in May, and organized by the Asian Development Bank Institute and the Think Tanks and Civil Societies Program, University of Pennsylvania. He spoke about the microcredit institution he founded some 40 years ago. He started Grameen after seeing the life-changing effects of lending his own money to poor villagers near his university at Chittagong. Read the transcript: http://bit.ly/2vCOtzz Watch the full presentation: http://bit.ly/2wWTH9l

With the United States walking away this year from multilateral deals like the Trans-Pacific Partnership and the Paris Agreement on climate change, is globalization doomed? Guntram Wolff, the director of Brussels-based economic think tank Bruegel, thinks not, given the importance of Europe and Asia. If the United States doesn’t change course, he says, the responsibility for Europe and Asia to work jointly on sustaining the multilateral system will become fundamentally important. Guntram Wolff is the director of Brussels-based economic think tank, Bruegel. He spoke at the Global Think Tank Summit in May 2017, in Yokohama. Read the transcript: http://bit.ly/2gaxFsL Watch the full presentation: http://bit.ly/2xxuCOs Know more about the Global Think Tank Summit 2017: http://bit.ly/2n9l5g2 Know more about ADBI’s work on globalization: http://bit.ly/2xhkREO

Women in emerging Asian economies will be big winners in e-commerce and online trade, which will help them overcome geographic isolation and limited access to information and financing. But obstacles remain. E-commerce helps women overcome the challenges of building a business. Working from home lowers overhead and setup costs, makes it easier to access the latest information, and removes geographic limitations through online trading. Read the transcript http://bit.ly/2wL0j9P Read the policy brief https://www.adb.org/publications/development-dimension-e-commerce-asia-opportunities-and-challenges Authors Aladdin Rillo, ADBI senior economist, https://www.adb.org/adbi/about/staff-profiles/aladdin-rillo Valdimir dela Cruz, a former ADBI research associate Know more about ADBI’s work on Digital economy http://bit.ly/2ivDzFy E-commerce http://bit.ly/2vaEDV8 Women and trade http://bit.ly/2oHrYW9

A fast-growing digital economy is opening new opportunities for small and large businesses, but developing Asia is hampered by a lack of infrastructure and outmoded regulations. International cooperation and coordination with development partners will help standardize simple, transparent, and effective processes for global business, as will efficient and automated exchange of information. The private sector should focus on market infrastructure to support a digitally driven economy. It needs to develop new business models and encourage innovation to realize the full impact of digital connectivity. It must reassure consumers that their privacy will be respected, that the goods will be of good quality and arrive on time, and that payment systems are secure and they can get their money back if needed. Read the transcript http://bit.ly/2ivIVRe Read the policy brief https://www.adb.org/publications/development-dimension-e-commerce-asia-opportunities-and-challenges Authors Aladdin Rillo, ADBI senior economist, https://www.adb.org/adbi/about/staff-profiles/aladdin-rillo Valdimir dela Cruz, a former ADBI research associate Know more about ADBI’s work on Digital economy http://bit.ly/2ivDzFy E-commerce http://bit.ly/2vaEDV8

Local communities in Japan are taking sustainable energy into their own hands, with small investors backing wind and solar projects instead of waiting for the government to act. Hometown investment trust funds are using the Internet to tap local investors for 100 dollars to 5,000 dollars to fund projects where they live. Banks are reluctant to finance renewable energy projects, deeming them too risky. Alternative financing vehicles are supporting growth in risky sectors in Asia. Hometown investment trust funds have spread from Japan to Cambodia, Mongolia, Peru, and Viet Nam, and are also attracting attention from the government of Thailand and Malaysia’s central bank. Read the transcript http://bit.ly/2xa9H3Z Read the blog post https://www.asiapathways-adbi.org/2017/04/hometown-investment-trust-funds-a-sustainable-solution-for-financing-green-energy-projects/ Authors Naoyuki Yoshino, dean, ADBI https://www.adb.org/adbi/about/dean Farhad Taghizadeh-Hesary, assistant economics professor at Keio University, Tokyo https://www.asiapathways-adbi.org/author/farhad-taghizadeh-hesary/ Know more about ADBI’s work on hometown investment trust funds http://bit.ly/2vO13J0

The Association of Southeast Asian Nations (ASEAN) has delayed establishing an ASEAN Economic Community (AEC) by a decade as it strives to emulate the European Union and promote collective growth. The AEC failed to reach agreement on 105 of 506 measures by its 2015 deadline. A successor blueprint, called the AEC Blueprint 2025, which lays out the work for ASEAN economic integration in the next 10 years, was adopted at the 27th ASEAN Summit in November 2015. But economists question whether economic integration of such a disparate group of economies is feasible in scope and ambition. And even if possible, they question whether the AEC can do a better job of hastening reforms and binding ASEAN member states to their commitments at a time of increasing uncertainty and rising protectionist pressures in the global economy. Simply put, the ASEAN Economic Community Council needs to replace the so-called “ASEAN Way” of doing business, which is consensus driven and any step can be blocked if one member doesn’t like the outcome. A whole way of thinking must change if 2025 is to amount to anything more than a date on a page. Read the transcript http://bit.ly/2wVE1Qz Read the blog post https://www.asiapathways-adbi.org/2017/07/will-2025-be-the-final-deadline-for-the-asean-economic-community/ Authors Jayant Menon, lead economist, Asian Development Bank https://www.asiapathways-adbi.org/author/jayant-menon/ Anna Cassandra Melendez, consultant, Asian Development Bank https://www.asiapathways-adbi.org/author/anna-cassandra-melendez/ Know more ADBI’s work on ASEAN http://bit.ly/2wVtzbJ

Asia’s emerging economies are becoming more focused on the region and less dependent on global markets, but they need to protect themselves from risks of becoming too reliant on the emerging giants such as the People’s Republic of China. The Global Financial Crisis of 2009 had less of an impact on emerging Asia in part because it had weathered its own storm in 1998, and it was more reliant on regional than global links for trade and investment. Read the transcript: http://bit.ly/2x4yFmc Watch the complete presentation: https://www.youtube.com/watch?v=QA9YUZW2a3s&feature=youtu.be Know more about 20 Years after the Asian Financial Crisis: Lessons, Challenges: http://bit.ly/2oYbBk6 Know more about ADBI’s work on the Asian financial crisis: http://bit.ly/2wfxDG8

Digital financial services are being used to draw more people into the global financial system. Digital financial services must therefore be developed and regulated to safeguard against risk and to secure consumer protection. Different approaches to regulation, as in Cambodia and in the Philippines, show how regulations can hinder or spur growth. Read the transcript: http://bit.ly/2fvgX6L Read the policy brief, Financial Inclusion in the Digital Age: https://www.adb.org/publications/financial-inclusion-digital-age Authors: Shawn Hunter, manager, Inclusive Finance, The Foundation for Development Cooperation Valdimir dela Cruz, ADBI associate at the time the brief was published David Dole, ADBI senior economist https://www.adb.org/adbi/about/staff-profiles/david-dole

As finance becomes more inclusive, financial services will reach people who have no experience with formal finance structures, and they may fail to use the services fully or properly. Financial education is a crucial component of successful financial inclusion. Even in advanced economies, significant gaps remain in financial literacy. This episode discusses financial literacy in Japan and Malaysia. Read the transcript http://bit.ly/2vpb0we Read the policy brief https://www.adb.org/publications/financial-inclusion-digital-age Authors Shawn Hunter, manager, Inclusive Finance, The Foundation for Development Cooperation Valdimir dela Cruz, ADBI associate at the time the brief was published David Dole, ADBI senior economist https://www.adb.org/adbi/about/staff-profiles/david-dole.

E-commerce is increasingly leading the way in the global marketplace, taking a bigger share of world trade, creating more jobs, and pushing economic growth, but also challenging Asia’s developing economies. Although most e-commerce transactions occur in developed markets such as the United States, the United Kingdom, Northern Ireland, and Japan, developing countries led by those in Asia are catching up. Many are important buyers and sellers of goods and services online. Read the transcript: http://bit.ly/2urmimp Read the policy brief, The Development Dimension of E-Commerce in Asia: Opportunities and Challenges: https://www.adb.org/publications/development-dimension-e-commerce-asia-opportunities-and-challenges Authors: Aladdin Rillo, ADBI senior economist https://www.adb.org/adbi/about/staff-profiles/aladdin-rillo Valdimir dela Cruz, former ADBI research associate

Africa and Asia are latecomers to urbanization. In these two continents, less than half live in urban centers, while elsewhere, more than 70% of people do. But Africa and Asia are now rapidly urbanizing, with Asian cities growing at an average of 1.5% per year and Africa’s at 1.1% per year. While the world’s largest megacities of 10 million people or more are in Asia, Africa’s urban populations have been catching up. Incoming residents are competing for new financial and social opportunities but are placing increasing demands on city resources and services. Increasingly, the importance of the transferability of Asian experiences to other regions is being recognized for more efficient development paths. Read the transcript http://bit.ly/2uXYTrb Read the blog post https://www.asiapathways-adbi.org/2017/07/pointers-from-asia-for-urbanization-in-africa/ Authors Naoyuki Yoshino, ADBI dean https://www.adb.org/adbi/about/dean Matthias Helble, ADBI senior research economist and Research Department co-chair https://www.adb.org/adbi/about/staff-profiles/matthias-helble Grant B. Stillman, ADBI legal adviser https://www.adb.org/adbi/about/staff-profiles/grant-stillman

Digital technology can speed up economic growth, but only if people have the right skills, said the panelists at the Asian Development Bank annual meeting in May. ADBI research fellow Alisa DiCaprio told Devex that the bank can advance technology diffusion and adoption, and should invest in information and communication technology or ICT where progress has not benefited the many. Read the transcript: http://bit.ly/2u1CVAO Read the article and watch the interview: https://www.devex.com/news/adb-and-the-fourth-industrial-revolution-90242 Featuring Alisa DiCaprio https://www.adb.org/adbi/about/staff-profiles/alisa-dicaprio

Agriculture in Central Asia and the Caucasus not only ensures the food supply, but also supports the majority of the rural population and creates jobs. Although agriculture’s share of gross domestic product or GDP has declined since 2000, it still accounts for a large proportion of GDP in several countries. Tajikistan’s agriculture sector makes up over one quarter of GDP. Armenia accounts over a fifth of GDP to agriculture, while and Uzbekistan and the Kyrgyz Republic have a little under a fifth. Even so, the relatively small market and reliance on a narrow range of agro-food products have dampened farm output. In order to raise outputs and cash to meet the growing domestic and international demand, the region needs to jointly develop and integrate their agricultural value chains. These value chains encompass the goods and services required for a product to move from farm to consumer. Read the transcript http://bit.ly/2uYsQHU Read the policy brief https://www.adb.org/publications/promoting-agricultural-value-chain-integration-central-asia-and-caucasus Authors Aladdin Rillo https://www.adb.org/adbi/about/staff-profiles/aladdin-rillo Suryo Ariyanto Nugroho https://www.adb.org/adbi/about/staff-profiles/suryo-ariyanto-nugroho