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Wb report sees slower growth in east asia, calls for shift by ferujkll sdff
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Wb report sees slower growth in east asia, calls for shift |
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The economic growth of East Asia remains robust but is losingsteam, and the region should shift further from relying on exportsto spurring domestic consumption, said a World Bank (WB) reportreleased Tuesday. This year, regional growth will hover around 7.6 percent, withslower expansion in China pulling down the regional aggregate,according to the report, entitled "Capturing New Sources ofGrowth." Developing countries in East Asia and the Pacific grew by 8.2percent last year, marking a sharp fall from the previous year'snearly 10 percent, found the report. Last year's stunted pace was largely due to lower-than-expectedgrowth in manufacturing exports and supply disruptions sparked bythe 2011 earthquake that rocked Japan and severe flooding inThailand. Domestic demand and investment were generally strong, aided by theloosening of monetary policy in some countries. The global lender reiterated its frequent recommendation that theregion reduce its reliance on exports and shift further towardinternal consumption.
Such a shift, it said, is especially important as the eurozonestumbles and demand takes a hit amid the Greece-Spain twin crises. The European Union, along with the United States and Japan,accounts for more than 40 percent of the region's exports, andEuropean banks provide one-third of trade and project finance inAsia. "As external demand is likely to remain weak, countries indeveloping East Asia and Pacific need to rely less on exports andmore on domestic demand to maintain high growth," the report said. "Already, many countries are moving in this direction, but there isfurther scope for rebalancing," it added. WB economist Bryce Quillin, lead author of the report, said thatsome countries will need to stimulate household consumption whilesome others should consider boosting investment, particularly ininfrastructure.
"Governments would need to focus on accelerating the preparation ofinfrastructure projects," he said. James F. Smith, chief economist at Parsec Financial, a U.S.financial planning firm, said the challenge facing these countrieshas more to do with increasing trade with each other than purelyraising domestic consumption. "These countries should also attract growing foreign directinvestment, assuming they have reasonably open economies and norestraints on capital flows," he said. However, he added that what he called the coming "financialimplosion" of Japan will mark a huge challenge for Asia, much morethan any difficulties stemming from Europe or North America.
ASIA'S RICH-POOR GULF WIDENING Overall, the region is doing better than any other developing areaworldwide. In 2011, East Asian growth was about 2 percentage points higherthan the developing country average, and poverty continues to fall,the WB report found, noting that the number of people living onless than 2 U.S. dollars a day is expected to decrease in 2012 by24 million. Still, about one-third of the people in the region, roughly half abillion men, women and children, still live in poverty, the reportsaid.
Some economists fret that widening income gaps could sparkdiscontent that could derail poverty reduction and slow growth. "Asians today are richer, are healthier, more educated and have abetter quality of life," said Rajat M. Nag, managing directorgeneral at the Asian Development Bank during a press conference inWashington unrelated to the World Bank's report. "However, there isthe other Asia....which is not as shining." Indeed, two-thirds of the world's poor are in Asia, around 700million people lack access to clean water, and 83 million childrenin developing Asia are underweight, he said.
"It means 83 million people have already been doomed for life," hesaid, adding that malnutrition at such an early age stuntsintellectual growth. Children from the poorest families are five times more likely to beout of school, compared to their wealthier peers, and 20 times lesslikely to attend university, he said. "What inequality does, it starts to limit access to opportunity,"he said. "If you are not educated, you cannot participate in thegrowth process, which is generally... high tech, high skill.". I am Relays writer, reports some information about brown spots removal , remove brown spot.
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