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Measuring up Asia's economy
Sunday, 12 February 2012 02:59

Asia's economy is bigger, faster and better than the rest of us, or so the story goes.  But in reality, as UNESCAP's Statistical Yearbook for Asia and the Pacific makes clear, Asia's economies are a very diverse bunch.

Asia's population is some 4.2 billion out of a world population of 6.9 billion.  But in fact, a very few countries account for the lion's share of this population -- China 1.3 billion, India 1.2 billion, Indonesia 240 million, Pakistan 174 million, Bangladesh 149 million, Russia 143 million, and Japan 127 million.  While there a few Asian countries with populations just under a 100 million, Philippines with 93 million and Vietnam with 88 million, most of the 58 countries of the Asia-Pacific in fact have relatively small populations.

While Asia-Pacific's population is growing at at annual rate of 1.0% (down from 1.5% in the early 1990s), there are also great disparities in the population growth rates between Asia's different sub-regions -- East and North East Asia, and North and Central Asia have annual population growth rates of 0.4% and 0.3 % respectively, South East Asia's population is growing at a 1.1%, South and South West Asia at 1.4%, and the Pacific at 1.7%

While the Asia-Pacific might account for more than 60% of the world's population, its share of global GDP (at current prices) is about half that at 31%.  As fast as the region has been growing, its level of development is still well behind advanced countries.  And 62% of Asia-Pacific's GDP is produced by the handful of countries that make up North East Asia, and even here China and Japan account for the lion's share.

The ASEAN countries of South East Asia make up only 8% of the Asia-Pacific economy, with Indonesia leading the way.  South and South West Asia account for 15% of the region's economy.  Although India is leading the pack in this sub-region, its GDP is only about one-quarter that of China.

When it comes to GDP per capital, the Asia-Pacific region is only about half that of the world average of $8,500.  The region's main leaders in the GDP per capita stakes are Australia ($46,000), Japan ($40,000), Singapore ($36,000) and Hong Kong ($30,000).  The region's developing dynamos are not in any way in the same league -- China ($3,700), Indonesia ($2,300), India ($1,100), Malaysia ($6,800), Thailand ($3,800), Philippines ($1,800) and Vietnam ($1,100).

In terms of growing fast, China has been the region's star, with close to 10% annual growth in GDP per capita in recent decades.  The China growth story is unique, very few other countries coming close to it, with the best other performers all achieving around 5% annual growth, namely Vietnam, Mongolia, Korea, India, and Cambodia.

The process of economic development, which most Asia-Pacific economies are still going through, involves a progressive movement from living in rural to living in urban areas, and a similar movement out of the agricultural to manufacturing and service sectors.

In 2010, 43% of the Asia-Pacific population lived in urban areas, the second lowest urban proportion of any region in the world; however, in the last two decades the Asia-Pacific urban proportion has risen by 29%, more than any other region.

The movement from rural to urban areas is quite advanced in North-East Asia where 50% of the population are urban dwellers -- ranging from 100% in Hong Kong, to 83% in Korea, to 67% in Japan and 47% in China.  In South East Asia, some 42% of the population are urban dwellers -- from 100% in Singapore to 72% in Malaysia, 49% in the Philippines, 44% in Indonesia and 20% in Cambodia.  In South Asia, urbanization is much less advanced, with only about one-third of the population being urbanized in India, Pakistan and Bangladesh.  While urbanization goes hand-in-hand with development, most regrettably one-third of the urban populations of China, India and Indonesia live in urban slums.

The Asia-Pacific is also lagging the world in terms of the shift out of agriculture and into the services sector -- 7 1/2 of the region's population still work in agriculture, compared with 4% for the world.  Although the agriculture sector is declining in importance in most countries, it is still quite important in countries like China (11%), Indonesia (15%), Myanmar (48%), the Philippines (15%), Vietnam (21%) and India (17%).

In Asia-Pacific, the services sector represents 57% of the economy, compared with 67% for the world.  In some countries, the services sector leads the economy, like Hong Kong (92%), Japan (70%), Singapore (74%), and is in the same ball-park as North America and Europe, where the service sector accounts for about 75% of GDP.  But the services sector is much less developed in the big emerging economies, for example, China (41%), Indonesia (37%), Malaysia (47%), Philippines (55%), Thailand (45%), and India (55%).

So that is the shape of our Asia-Pacific economy.  But the whole point of an economy is to serve its people, and above all to improve their living standards and reduce their poverty.

In fact, the region has achieved great progress in poverty reduction.  While more than half the population in Asia-Pacific was living in poverty in 1990 (living on less than $1.25 per day), by 2008 the incidence of poverty had fallen by more than half, leaving less than one quarter of the regional population in poverty. In absolute terms, the numbers of the poverty-stricken in the region declined from about 1.6 billion in 1990 to 0.9 billion in 2008, while the total population grew by approximately 0.8 billion people. Faster reduction in the incidence of poverty in the region has brought Asia and the Pacific to the world average rate of 23% in 2008.

While this poverty reduction in Asia-Pacific is stunning, not surprisingly, the performances differ markedly between the different sub-regions.  Thanks to China, East and North East Asia saw poverty fall from 60% in 1990 to 13% in 2007.  By contrast, South and South-West Asia achieved a more modest fall from 50% to 36%, while poverty in South-East Asia has remained stable at around 21%.

In conclusion, the Asian miracle and the Asian Century remain very much a mixed bag, with immense diversity in the state of the different economies and the progress they have made.  In future articles, we will look at Asia's society and Asia's economic relations with the rest of the world.

 

Reference:

United Nations Economic and Social Commision for Asia and the Pacific, Statistical Yearbook for Asia and the Pacific, 2011

http://www.unescap.org/stat/data/syb2011/


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