A World Bank (WB) report released on Friday said that
inequality, social cohesion, corruption and environmental
degradation are urgent domestic challenges facing East Asian
countries.
According to the report, An East Asian Renaissance: Ideas for
Growth, the challenges arose from East Asia's economic success --
the World Bank says that in the 10 years since the 1997 financial
crisis, the region has transformed itself by creating more
competitive, more innovative economies.
The report points out that China's domestic policy priorities
have shifted to sustainability of growth, ensuring equitable
development, management of cities and government performance, said
Bert Hofman, WB lead economist for China.
The report said that having successfully undergone two waves of
integration -- first with global markets and then within the region
itself -- East Asia now needs to move to a third integration -- at
the domestic level.
The growth spurred by global and regional integration means that
almost everyone in developing East Asia will be living in a
middle-income country in a few years, said Homi Kharas, one of the
authors of the report and a visiting fellow at the Brookings
Institution.
The former WB chief economist for East Asia and the Pacific said
that development challenges at the middle-income level are complex
and countries need to adapt their strategies so that they are not
squeezed between their high-income, high-tech neighbors and
low-income, low-wage competitors.
East Asia is witnessing the largest rural-to-urban shift of
population in history as 2 million new urban dwellers are expected
in East Asian cities every month for the next 20 years, said
Indermit Gill, the other author of the report and acting chief
economist for East Asia and Pacific of the WB.
Kharas said what's going on in East Asia is a renaissance.
Old Asia saw mature industries move to low-wage countries, while
new Asia is more innovative and networked, characterized by a
competitive business environment that encourages new products and
processes and a labor force able to absorb new ideas, he said.
The report argues that for the growing number of middle income
countries in the region, focus is needed on improved management of
small and mid-sized cities, broader access to social services and
greater transparency and accountability in national and local
governments.
(Xinhua News Agency June 8, 2007)