The economies of China and other East Asian nations could see growth derailed if they fail to boost investment and cope with widening wealth gaps and pollution a decade after the 1997 financial crisis, the World Bank said yesterday.
Developing East Asia -- a region stretching from South Korea to Indonesia -- are richer and have a bigger share of the world economy than in 1997, when a crisis sparked by a plunge in the Thai baht dragged the region into recession, the bank said in a report.
Before the 1997 crisis, half the region's people lived on less than US$2 a day. Now, that rate has receded to 29 percent, it said.
PHOTO: AFP
But many countries suffer from weak investment and a growing rich-poor gap, the report said.
"Even as the region celebrates recovery, new challenges loom, which could slow or even derail growth if not properly handled," the bank said in the report East Asia and Pacific Update.
China is expected to grow by 10 percent this year, but faces a widening wealth gap and rising pollution while also managing the financial strains from a soaring trade surplus, the bank said. It noted that China has 20 of the world's 30 most polluted cities.
Such problems "could affect China's onward development if they are left unchecked," said Milan Brahmbhatt, the bank's chief Asia economist, at a Tokyo news conference connected by video link with reporters in Beijing, Jakarta, Bangkok and other cities.
Brahmbhatt said that in other Asian economies, "growth has actually been somewhat less than in the pre-crisis trends."
"Investment has been somewhat weak and erratic. The reasons for this weak investment are not well understood," he said.
Thailand, epicenter of the 1997 to 1998 crisis, posted 5 percent growth last year, the bank said. That was down from an average annual expansion of 8 percent reported in 1985 to 1995.
Economies also face wrenching changes due to growing Chinese dominance in manufacturing, said the Washington-based bank, which lends money for development projects and alleviating poverty.
China's emergence is "creating intense competitive pressures for other East Asian economies," its report said. It said companies rate uncertainty due to such conditions as their biggest constraint on operations.
As a whole, East Asian economies last year recorded their strongest growth since the 1997 to 1998 crisis, expanding at 8.1 percent.
This year, the bank said growth in the region should slow modestly to 7.3 percent because of the looming downturn in the US economy and slowing export growth.
The report covered what the bank calls Emerging East Asia, which includes China, Indonesia, Malaysia, Philippines, Thailand and Vietnam, as well as Hong Kong, South Korea, Singapore and Taiwan.
The World Bank urged a range of reforms to help poorer Asian countries move up to higher incomes. They included boosting investment by eliminating unnecessary restrictions, expanding capital markets and liberalizing trade in services.
The region needs to invest US$200 billion annually in improving infrastructure over the next five years, the bank said.
The bank also warned of the potential dangers of a growing gap between Asia's rich and poor.
"This matters because high inequality can lead to more social and political conflict [and] can have adverse impacts on growth," Brahmbhatt said.
He said governments could ease such strains by improving access for the poor to higher education and credit to start businesses.
Today, East Asia's economies are seen as more robust and better run. The region has an annual output of US$5 billion, double the dollar value before the crisis, the bank said.
The government is aiming to recruit 1,096 foreign English teachers and teaching assistants this year, the Ministry of Education said yesterday. The foreign teachers would work closely with elementary and junior-high instructors to create and teach courses, ministry official Tsai Yi-ching (蔡宜靜) said. Together, they would create an immersive language environment, helping to motivate students while enhancing the skills of local teachers, she said. The ministry has since 2021 been recruiting foreign teachers through the Taiwan Foreign English Teacher Program, which offers placement, salary, housing and other benefits to eligible foreign teachers. Two centers serving northern and southern Taiwan assist in recruiting and training
WIDE NET: Health officials said they are considering all possibilities, such as bongkrekic acid, while the city mayor said they have not ruled out the possibility of a malicious act of poisoning Two people who dined at a restaurant in Taipei’s Far Eastern Department Store Xinyi A13 last week have died, while four are in intensive care, the Taipei Department of Health said yesterday. All of the outlets of Malaysian vegetarian restaurant franchise Polam Kopitiam have been ordered to close pending an investigation after 11 people became ill due to suspected food poisoning, city officials told a news conference in Taipei. The first fatality, a 39-year-old man who ate at the restaurant on Friday last week, died of kidney failure two days later at the city’s Mackay Memorial Hospital. A 66-year-old man who dined
‘CARRIER KILLERS’: The Tuo Chiang-class corvettes’ stealth capability means they have a radar cross-section as small as the size of a fishing boat, an analyst said President Tsai Ing-wen (蔡英文) yesterday presided over a ceremony at Yilan County’s Suao Harbor (蘇澳港), where the navy took delivery of two indigenous Tuo Chiang-class corvettes. The corvettes, An Chiang (安江) and Wan Chiang (萬江), along with the introduction of the coast guard’s third and fourth 4,000-tonne cutters earlier this month, are a testament to Taiwan’s shipbuilding capability and signify the nation’s resolve to defend democracy and freedom, Tsai said. The vessels are also the last two of six Tuo Chiang-class corvettes ordered from Lungteh Shipbuilding Co (龍德造船) by the navy, Tsai said. The first Tuo Chiang-class vessel delivered was Ta Chiang (塔江)
EYE ON STRAIT: The US spending bill ‘doubles security cooperation funding for Taiwan,’ while also seeking to counter the influence of China US President Joe Biden on Saturday signed into law a US$1.2 trillion spending package that includes US$300 million in foreign military financing to Taiwan, as well as funding for Taipei-Washington cooperative projects. The US Congress early on Saturday overwhelmingly passed the Further Consolidated Appropriations Act 2024 to avoid a partial shutdown and fund the government through September for a fiscal year that began six months ago. Under the package, the Defense Appropriations Act would provide a US$27 billion increase from the previous fiscal year to fund “critical national defense efforts, including countering the PRC [People’s Republic of China],” according to a summary