Asia's Developing Future

Small and medium-sized enterprises are the backbone of Asia’s economies.

The Asian Development Bank’s most recent SME survey covered 20 countries in Central, East, South, Southeast Asia, and the Pacific and showed that SMEs accounted for an average of 96% of all enterprises and 62% of the national labor force.

SMEs contributed an average of 42% of the gross domestic product or manufacturing value added in these countries, and continued to influence trade.

The latest data show that SMEs in the People’s Republic of China and India accounted for more than 40% of total export value, followed by 26% in Thailand, 19% in the Republic of Korea, and 16% in Indonesia.

Yet their development is hindered because of the difficulty accessing affordable credit.

Read the transcript

http://bit.ly/2CbsUEl

Read the working paper

https://www.adb.org/publications/solutions-smes-difficulties-accessing-finance-asian-experiences

About the authors

Naoyuki Yoshino is dean of ADBI

Farhad Taghizadeh-Hesary is an assistant professor of economics at Keio University, Tokyo

Know more about ADBI’s work on SMEs

http://bit.ly/2ElPHnb

http://bit.ly/2CdtNwf

Related Podcast

http://bit.ly/2H6cRLR

http://bit.ly/2tZS4mU

Basic household sanitation has long been outside the reach of cost-effective comprehensive solutions, especially in communities dependent on septic rather than sewage systems. But this is changing.

Groups as varied as the Bill & Melinda Gates Foundation and a coalition of private-sector water technology interests are attacking the problems of fecal sludge management, or FSM, particularly in underserved communities.

Thanks to innovative products and platforms and the collaboration of the Asian Development Bank Institute, the technology that moves water to bathrooms, taps, and kitchens worldwide is within reach of communities that don’t have complex and costly sewage systems.

David Robbins, a specialist in on-site and decentralized wastewater management, found that FSM’s efficiency and effectiveness—the hallmarks of modern sewerage systems—can now be used to attract the private sector into a fledgling sanitation economy that can overcome the many political roadblocks faced by communities without sewers.

Read the transcript

http://bit.ly/2Bbv7mC

Watch the full presentation

https://www.youtube.com/watch?v=87p35v-I2pA

About the speaker

David Robbins is a specialist in on-site and decentralized wastewater management, with an emphasis on fecal sludge management.

Recent demographic and societal changes in both developing and developed countries have affected the employment of migrant workers in economies worldwide, and few sectors illustrate the international impact of these changes more than domestic work and home-based care.

An increase in women’s employment, rapid population aging, increasing life expectancy, and lower fertility rates have strained traditional care arrangements in the developed and developing world.

But tight fiscal policies have weakened already inadequate public services and protection for these migrant workers, who leave their families and homes for decades at a time to work overseas in hope of earning more money to send back home.

Read the transcript

http://bit.ly/2EkbKHA

Read the working book

https://www.adb.org/publications/safeguarding-rights-asian-migrant-workers-home-workplace

About the authors

Maria Gallotti is a migration specialist at the International Labour Organization (ILO), Geneva.

Benjamin Harkins is a technical officer at ILO, Bangkok.

Marie-Jose Tayah is the regional coordinator for the Middle East and North Africa at the International Domestic Workers Federation.

Max Tunon is a migration specialist at ILO, New Delhi.

Know more about ADBI’s work on labor

http://bit.ly/2DLwDxy

Women who own small businesses are increasingly turning to digital platforms to source capital for growth as they battle discrimination from formal channels.

Small and medium-sized enterprises consistently cite access to credit as the biggest constraint on growth and trade, and a 2016 survey commissioned by the Asian Development Bank confirmed that export firms headed by women reported greater difficulties getting finance than other trading firms.

Globally, 10.1% of all formal-sector firms are led by women and only 3% in Asia and the Pacific.

Banks are less likely to extend credit to SMEs as they tend to apply for smaller loans, have poorer financial documentation than big firms, and lack collateral, which banks say make it difficult for financial institutions to profitably assess risk and offer finance.

Read the transcript

http://bit.ly/2EiKdpS

Read the working paper

https://www.adb.org/publications/women-and-trade-gender-impact-trade-finance-and-fintech

About the authors

Alisa DiCaprio was a research fellow at ADBI at the time the research was conducted

Ying Yao is a postdoctoral researcher at Hitotsubashi University, Tokyo

Rebecca Simms was a research associate at ADBI at the time the research was conducted.

Know more about ADBI’s work on women and the economy

http://bit.ly/2n8Pl8u

Emerging economies can learn a lot from how the Republic of Korea faced down the financial crises of 1997 and 2008, and emerged from hard economic slowdown stronger than ever.

Painful macroeconomic and financial reforms plugged structural weaknesses and restored investor confidence, and have put Korea in a better position to weather similar shocks, offering lessons for emerging Asian economies.

Read the transcript

http://bit.ly/2G4YerO

Read the working paper

https://www.adb.org/publications/twenty-years-after-financial-crisis-korea

About the author

Jong-Wha Lee is a professor of economics and director of the Asiatic Research Institute at Korea University.

Know more about ADBI’s work on the Republic of Korea

http://bit.ly/2B7KmJz

An already widening gap between rich and poor in the People’s Republic of China is likely to worsen due to its rapidly aging population.

Increasing life expectancy and the effect of a decades-long family planning policy that limited the number of children people could have is felt throughout the economy.

At the end of 2011, the number of people over 60 years old in the PRC reached 185 million or 14 percent of the population. By 2030, the PRC is expected to become the world’s most aged society, and by 2050, the number of elderly people is forecast to climb to 454 million, or 33 percent of the total population.

Read the transript

http://bit.ly/2G2TeUs

Read the working paper

https://www.adb.org/publications/population-aging-and-inequality-evidence-prc

About the authors

Xudong Chen is a professor at the School of Business, Department of Finance and Accounting, Baldwin Wallace University.

Bihong Huang is a research fellow at ADBI.

Shaoshuai Li is a PhD candidate at the University of Macau.

Know more about ADBI’s work on aging

http://bit.ly/2DFpsnS

Robust institutions and low levels of corruption are more important to reducing hunger than population size or the state of a country’s natural resources.

Food security—the ability of a country to feed its people—will become even more important in coming years as Asia’s population rises and resources grow scarcer.

A study of 10 countries in Asia and the Middle East found that food security grows alongside the development of political democracy, economic growth, strong judicial systems, and other institutions.

Asia will need to produce more food despite resources that are already limited and will be even more stretched as populations grow.

While environmental issues, including climate change, are tough challenges, institutional reform is the most important step for countries in the region seeking food security for their people.

Read the transcript

http://bit.ly/2mlGPBN

Read the book

https://www.adb.org/publications/food-insecurity-asia-why-institutions-matter

Read the summary

https://www.adb.org/publications/at-a-glance-food-insecurity-asia-why-institutions-matter

About the editors

Zhang-Yue Zhou is a professor at the College of Business, Law and Governance, James Cook University, Australia.

Guanghua Wan is an economist at the Asian Development Bank, Manila.

Know more about ADBI’s work on food security

http://bit.ly/2mfu0cb

India and the People’s Republic of China must act quickly if they are to have enough to eat over the coming decades.

For the PRC, the biggest challenges come before 2030, when its population is expected to peak, then decline.

India, which will take over the mantle of the world’s most populous country around that time, will see its food needs continue to grow for decades after that, especially if it manages to ease the poverty that now afflicts one in five of its people.

The outcome of the efforts in the PRC and India will have consequences for the food supply of Asia and the rest of the world. Their success in meeting their food needs will be especially important to other countries having difficulty feeding their own populations.

Read the transcript

http://bit.ly/2mkgrbJ

Read the book

https://www.adb.org/publications/food-insecurity-asia-why-institutions-matter

Read the summary

https://www.adb.org/publications/at-a-glance-food-insecurity-asia-why-institutions-matter

About the editors

Zhang-Yue Zhou is a professor at the College of Business, Law and Governance, James Cook University, Australia.

Guanghua Wan is an economist at the Asian Development Bank, Manila.

Know more about ADBI’s work on food security

http://bit.ly/2mfu0cb

It can be hard to measure the effects of infrastructure investment on an economy. Knowing whether an investment worked means somehow identifying the revenue it generated amidst the noise of an economy in full swing.

An Asian Development Bank Institute study used tax revenue as a measure of growth, and found significant contributions generated by the construction and operation of the line and the eventual connection of Japan’s southern-most island to the larger network of high-speed trains known as shinkansen, linking Kyushu with Osaka and Hiroshima on Japan’s largest island of Honshu.

Read the transcript

http://bit.ly/2BiskIz

Read the working paper

https://www.adb.org/publications/impact-infrastructure-investment-tax-estimating-spillover-effects-kyushu-high-speed

About the authors

Naoyuki Yoshino is the dean of the Asian Development Bank Institute (ADBI)

https://www.adb.org/adbi/about/dean

Umid Abidhadjaev is a project consultant on infrastructure at ADBI

Know more about ADBI’s work on spillover effects

http://bit.ly/2hGyAlm

Trade deficits are considered bad news for economies, and for an economy the size of the United States, a deficit of $745 billion in 2015, the largest seen in decades, would be cause for alarm.

But the true picture is more complex.

Looking beyond traditional statistics shows how burgeoning global value chains are now driving changes in the manufacturing of, trade in, and value of goods.

Multinational corporations that have successfully leveraged global value chains have pivoted away from manufacturing and now concentrate more fully on marketing, design, and innovation.

Apple, Nike, Reebok, the Limited, and the Gap are major players in consumer electronics, athletic footwear, and fashion-oriented apparel, but own not a single production facility in the United States. With the exception of Apple, none of them owns production facilities anywhere in the world.

Official statistics have yet to catch up with new trade realities emerging from global value chains. Although the gross profit margins of the Apple iPhone exceed 60 percent and that of Nike products is more than 45 percent, this value is not shown in US export metrics.

Read the transcript

http://bit.ly/2z9Kn1E

Read the working paper

https://www.adb.org/publications/global-value-chains-and-missing-exports-united-states

About the author

Yuqing Xing is a professor of economics and the director of Asian economic policy at the National Graduate Institute for Policy Studies, Tokyo.

Know more about ADBI’s work on international trade

http://bit.ly/2AC03x0