By

1
Inequality and Growth in Asia Pacific

• By
• Taimur Khilji

2
Outline

• Try to address two questions
• What are the patterns of growth across Asia
  Pacific?
  
• Is inequality increasing?
• If so, what can we do about it?
• Some areas to consider

3
Diversity in Asia Pacific

• Home to 37 countries and over 40 different
  national languages
  
• The two most populated countries are in Asia
  China and India with four others in the top 10
  
• The three least populated countries are also in
  Asia Pacific Nauru, Palau, and Tuvalu
  
• China 4000-year history of self-governance
• Timor-Leste one of the youngest countries in the
  world
  
• What about diversity in Growth?

4
Asia Fastest Growing Region!

• Aggregate Growth Rates
• Regional aggregates can mask significant
  variations
  

• Diverging Growth Rates

5
Inequality Rising Lack of Inclusive Growth

• Inequality Increasing Across Countries

• Inequality Increasing Within Countries

6

Pattern of Growth Agriculture Lags Behind
East Asia Pacific
South Asia
7
GDP Value-Added by Sector(2006)
8
Structure of Employment in Asia(excluding
China)1996-2005
9
Structural Shift in Economy?

• Sectors
• Agriculture Manufacturing Services
• Geography
• Rural Urban
• Employment
• Unskilled Labor Skilled Labor
• Factors of Production
• Labor Intensive Capital Intensive

10
One Billion Poor in Asia
But where do they Live and Work?
11
Taking Stock

• Diverging growth rates across countries
• Increasing inequality across countries
• High levels of growth in manufacturing and
  services
  
• Contributes over 80 of GDP
• Low levels of growth in agriculture
• Contributes less than 20 of GDP
• However over 50 employed in agriculture!
• Increasing inequality within countries

12
Managing Inclusive Growth Some Areas to Consider

• In the short-run?
• Rural Sector Development Agriculture,
  infrastructure, quick impact projects, local
  technology, social capital, financial services,
  off-farm sector
• Social Cohesion Safety Nets Provision of
  public goods (education, health-care, food),
  skills training, employment schemes
  
• Institutions Decentralization, regional
  cooperation South-South solutions, responsive
  institutions, local solutions, management of
  urban migration, trust

13
Managing Inclusive Growth Some Areas to think
About

• In the medium-run?
• Education
• Employment
• Urban Sustainability

14
Managing Inclusive Growth Some Areas to think
About

• In the long-run?
• We all know the answer to that
• Thank you