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Asia's Developing Future
By Asian Development Bank InstituteEducation
Asia's Developing Future episodes
- The global agenda is evolving, and big players need to change the rulesGlobal governance has undergone significant change since the late 1990s, with the number of global players in health, trade, and development finance rapidly increasing, mobilizing more funds for health and development in developing countries, and spurring global trade.This trend has challenged the three most prominent intergovernmental bodies in these areas—the World Health Organization, the World Trade Organization, and the World Bank.They now need to adapt to a new world order where they play a less central role.After World War II, governments around the world forged international agreements and treaties, forming global bodies to promote international good in almost every social sphere.In 1944, the World Bank’s predecessor, the International Bank for Reconstruction and Development, was established to help rebuild economies devastated by the war.Three years later, the General Agreement on Tariffs and Trade, which over time evolved into the WTO, was formed. The WHO was set up soon after in 1948 as the United Nations’ specialized agency for health.But in the 1990s, new actors—nonstate and nongovernment organizations—emerged, challenging the authority of the WHO, the WTO, and the World Bank, says Matthias Helble, senior economist and co-chair of the research department at the Asian Development Bank Institute.Read the transcripthttps://bit.ly/2ue7k3lRead the working paperhttps://www.adb.org/publications/comparison-global-governance-across-sectors-health-trade-development-financeAbout the authorsMatthias Helble is senior economist and co-chair of the Research Department at the Asian Development Bank Institute.Jera Lego is an ADBI associate.Zulfiqar Ali was an ADBI associate at the time the research was published.Know more about ADBI’s work onTradehttps://bit.ly/2oTzgnghttps://bit.ly/2D3NTJHHealthhttps://bit.ly/2pxdEybhttps://bit.ly/2HVr2CZ10 min
- Commodity price shocks hurt credit growth in developing countriesBig swings in global commodity prices unnerve governments in developing countries reliant on such export revenue, and curb credit growth as banks tighten lending during price volatility.A look at 1,600 banks from 78 developing countries between 2004 and 2015, a period of large swings in commodity prices, found lenders become more cautious when prices fluctuate because clients may not be able to service loans, eroding the quality of bank assets and capital.Banks with relatively lower deposits and poor asset quality are particularly vulnerable to commodity shocks and tend to be more aggressive in responding to price movements.Similarly, banks that are more sensitive to fluctuations in commodity prices, and see a decline in deposit funding and an increase in bad loans in response to a fall in commodity prices, reduce credit supply when asset quality falls.The data shows that a bank with high exposure to commodities and low deposits curbs lending by as much as 4.1 percentage points when commodity prices fall below expected trends, more if the fall deepens.Read the transcripthttps://bit.ly/2G4VR7ORead the working paperhttps://www.adb.org/publications/international-commodity-prices-and-domestic-bank-lending-developing-countriesAbout the authorsIsha Agarwal is a PhD student at Cornell University, United States.Rupa Duttagupta is chief of the Emerging Markets Division, International Monetary Fund.Andrea F. Presbitero is an economist at the IMF and assistant professor in economics at the Università Politecnica delle Marche, Ancona, Italy.Know more about ADBI’s work onCommodities https://bit.ly/2pBo7YuCredit https://bit.ly/2FW1n0n4 min
- Can trade avert a water crisis? Part 2Water may be saved through trade provided it moves from countries that use water wisely to those lacking water, as a coming water crisis—driven by climate change, neglect of infrastructure, and misguided policies—threatens global economic growth in countries struggling to develop, and in developed countries.Savings don’t refer to the volume of virtual water of the imported product, but to the volume of water the importers would have required to produce the same quantity of product. Globally, savings represent on average 10% of the 352 cubic kilometers of global freshwater used each year.Most virtual water goes into agricultural exports rather than industry, and is heavily subsidized to make them competitive. There is no recognized way to price water, so it reflects demand and supply, and water, both surface and groundwater, is underpriced. The reality is that water resources are becoming more expensive to exploit, and this is not reflected in the price of a final product.Read the transcripthttp://bit.ly/2IqaFztRead the bookhttps://www.adb.org/publications/win-win-how-international-trade-can-help-meet-sdgsAbout the speakerAlexandre le Vernoy is a consultant at Groupe d’Economie Mondiale.Know more about ADBI’s work on tradehttp://bit.ly/2oTzgnghttp://bit.ly/2D3NTJH20 min
- Investors want flexibility in the law and its cultural drivers, which leads to innovationLaws in developing countries generally reflect their unique cultures, which may restrict innovation and risk-taking, throwing obstacles in the path to development. Strong legal mechanisms, including intellectual property rights and patent protection, allow innovation to thrive.More than elsewhere in Asia, Southeast Asian countries emphasize the economic value of intellectual property rights on patents, but enforcement varies and so does their attraction for investors.Beyond legal mechanisms, innovation centers stimulate growth and innovation.Government-protected technology parks link universities and state companies, and investors know they have a degree of security and won’t have problems down the line. Innovation comes from a meeting of minds, and while there is a risk that specific research may lead nowhere, it’s outweighed by the potential profit from unanticipated spin-off results.The more freedom a country gives its enterprises, the more innovation it could produce.The People’s Republic of China and India offer a curious comparison.Read the transcripthttp://bit.ly/2ImPGxnRead the working paperhttps://www.adb.org/publications/law-culture-and-innovationRead the blog posthttp://bit.ly/2FAwIpeAbout the authorsDouglas Cumming is a professor and Ontario research chair of the Schulich School of Business, York University, CanadaSofia Johan is an extramural research fellow of the Tilburg Law and Economics Centre, University of Tilburg, The NetherlandsKnow more about ADBI’s work on innovationhttp://bit.ly/2FL75Ovhttp://bit.ly/2FLuyPW5 min
- China’s “shadow banking” after the 2007 global crisis yields unexpected resultsChina’s 2009 economic stimulus program after the global financial crisis led to the growth of shadow banking as local governments scrambled to pay off their obligations under the program.Regulators loosened borrowing rules to avoid a debt crunch, posing risks to the financial system, but in doing so accelerated China’s financial liberalization.Asian Development Bank Institute research details the unintended effects of the four-trillion-yuan stimulus plan launched to insulate China’s economic growth from the global financial crisis.Much of the responsibility for funding the stimulus fell on local governments.They mostly took on bank loans to pay for the infrastructure projects that formed the bulk of the stimulus plans.It could take decades for those projects to start paying returns, but the loans came due after about four years on average, leaving local governments searching for ways to service their debts while keeping the stimulus going.Read the transcript:http://bit.ly/2FZnwrrRead the working paperhttps://www.adb.org/publications/financing-local-government-prc-stimulus-loan-wanes-shadow-banking-waxesAbout the authorsZhuo Chen is an assistant professor at the PBC School of Finance, Tsinghua University Beijing, People’s Republic of China (PRC).Zhiguo He is professor of finance at the Booth School of Business, University of Chicago, and NBER, Chicago, US.Chun Liu is associate professor of finance at the School of Economics and Management, Tsinghua University, Beijing, PRC.Know more about ADBI’s work on banking in the People’s Republic of Chinahttp://bit.ly/2Fj4XBu5 min
- Can trade avert a water crisis? Part 1A coming water crisis, driven by climate change, neglect of infrastructure, and misguided policies, is threatening global economic growth in countries struggling to develop, and in developed countries, too.The water crisis is partly due to climate change and the increasing unpredictability of weather, but a lot has to do with the behavior of global trade, trade policies, and institutions that believe water is inexhaustible.It is not.By 2050, global demand for water will have risen by 55% from current levels, and wastewater discharges of growing urban populations will increase nitrogen effluents into rivers and seas by 180%—almost triple—compared with today’s rates, creating severe water stress that will affect the livelihoods of 4 billion people.Alexandre le Vernoy, a consultant at Groupe d’Economie Mondiale, identifies four major concerns about water: scarcity aggravated by climate patterns, declining water quality, weak management and regulations, and infrastructure gaps that make it hard to get water to where it is most needed.Read the transcripthttp://bit.ly/2Fxu1nuRead the chapterhttp://bit.ly/2EmIRg0About the speakerAlexandre le Vernoy is a consultant at Groupe d’Economie Mondiale.Know more about ADBI’s work on tradehttp://bit.ly/2oTzgnghttp://bit.ly/2D3NTJH13 min
- Developing countries need to fix domestic problems to best benefit from globalizationDeveloping countries can benefit from globalization if they fix potential problems at home before opening their economies. Failing to do so can multiply local problems as money streams across borders, suggests ADBI research. For a number of reasons, developing countries might end up worse off if they allow their currencies to float freely and remove controls on money flowing in and out of their country before putting in place strong financial foundations.Economists generally agree that imposing controls on capital flows acts as a tax on an economy. Those controls can make it harder for companies to find investors and for local investors to seek better returns for their money.What’s more, greater integration into the global financial system means a developing economy is less exposed to any volatile growth swings at home.Read the transcripthttp://bit.ly/2ozkJhaRead the working paperhttps://www.adb.org/publications/managing-financial-globalization-guide-developing-countriesRead the blog posthttp://bit.ly/2GtrUiCAbout the authorShang-Jin Wei is a professor at Columbia University’s School of International and Public Affairs and Graduate School of Business.Know more about ADBI’s work on global financehttp://bit.ly/2FGnWmHhttp://bit.ly/2owtvww4 min
- Who would have thought that punctuation could influence borrowing and lending?Peer-to-peer or P2P lending is a way of financing debt online so that people can borrow and lend money without going through a financial institution, like a bank. P2P, also known as social lending or crowd lending, has no need for a middleman and has emerged as an alternative to traditional lending institutions around the world.An Asian Development Bank Institute study using data from Renrendai, one of the largest P2P lending platforms in the People’s Republic of China, found something interesting about the use of punctuation marks in P2P lending.Who would have thought that the number of punctuation marks used in borrowers’ text could influence funding probability, borrowing rate, and default of loans in the peer-to peer lending market?Read the transcripthttp://bit.ly/2HVBmM7Read the working paperhttps://www.adb.org/publications/role-punctuation-p2p-lending-evidence-prcAbout the authorsXiao Chen is a PhD student at Jinan University, People’s Republic of China.Bihong Huang is a research fellow at ADBI.Dezhu Ye is a professor of finance at Jinan University.Know more about ADBI’s work on peer-to-peer lendinghttp://bit.ly/2GTNFqP9 min
- Urbanization in India, lessons from Korea, food insecurity, US trade imbalance, inequality in ChinaAnalysts and economists explain:How India’s government pushes for more urbanization by creating towns that will grow along with information technology.Read the transcript: http://bit.ly/2j6m649What emerging economies can learn from South Korea, and how it weathered the Asian financial crisis and came out of it even stronger.Read the transcript: http://bit.ly/2G4YerOHow corruption and weak national institutions can undermine food security in countries big and small, regardless of their natural resources. Will the world’s two most populous countries—China and India—be able to feed their people when food consumption is expected to go up by 50% in the next decade?Read the part 1 transcript: http://bit.ly/2mlGPBNRead the part 2 transcript: http://bit.ly/2mkgrbJHow the numbers on global trade imbalance don’t really give us the full picture.Read the transcript: http://bit.ly/2z9Kn1EAnd how longer life expectancy in China is widening the growing gap between rich and poor.Read the transcript: http://bit.ly/2G2TeUsKnow more about ADBI’s work from ADBI.org. https://www.adbi.org30 min
- Better sanitation systems lead to economic growthProviding total and improved sanitation services is a challenge across Asia, as population growth—up 5.7% on average in the past two decades—overwhelms existing infrastructure and outpaces planning. In Central Asia, South Asia, East Asia, and Southeast Asia, 1.7 billion people do not have access to safe sanitation, 780 million still practice open defecation, and 80% of waste water is dumped without proper treatment.The region needs to invest more than $71 billion to provide sanitation services to all.Countries in Asia and the Pacific can learn from the Republic of Korea and Malaysia about how to improve sanitation services, improve water quality and availability, broaden sanitation and strengthen governance, establish institutional mechanisms, and implement city-wide planning—all of which spur economic growth.Korea and Malaysia have harnessed innovative sanitation systems and involved the private sector in identifying projects that provide maximum coverage for communities. They have also put together sanitation projects funded by both the public and private sectors.Vedanti Kelkar, a capacity building and training associate at the Asian Development Bank Institute, explains the economic benefits of such a strategy.Read the transcripthttp://bit.ly/2F3wsLVRead the blog posthttp://bit.ly/2HgHdv5About the authorVedanti Kelkar is a research associate at the Asian Development Bank Institutehttps://www.adb.org/adbi/about/staff-profiles/vedanti-kelkarListen to another episode on sanitationhttp://bit.ly/2GeHeP7Know more about ADBI's work on urbanization and sanitationhttp://bit.ly/2ClVQcX8 min
About Asia's Developing Future
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ADBI is the think tank of the Asian Development Bank. We conduct policy research and capacity building to drive sustainable development in Asia and the Pacific.
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