Economic Outlook for Southeast Asia, China and India 2019

Description

The Economic Outlook for Southeast Asia, China and India is a bi-annual publication on regional economic growth, development and regional integration in Emerging Asia. It focuses on the economic conditions of Association of Southeast Asian Nations (ASEAN) member countries: Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Viet Nam. It also addresses relevant economic issues in China and India to fully reflect economic developments in the region. The Outlook comprises four main parts, each highlighting a particular dimension of recent economic developments in the region. The first part presents the regional economic monitor, depicting the economic outlook and macroeconomic challenges in the region. The second part consists of a special thematic chapter addressing a major issue facing the region. The 2019 edition of the Outlook looks at smart cities, with a special focus on transportation. Addressing traffic congestion, in particular, is critical in realising the potential benefits of urbanisation for growth. The third part of the report includes structural country notes offering specific recommendations for each country, and the fourth part discusses the recent progress made in key aspects of regional integration. Foreword......Page 5 Acknowledgements......Page 7 Table of contents......Page 9 Acronyms and abbreviations......Page 13 Executive summary......Page 17 Table 1. Real GDP Growth in Southeast Asia, China and India......Page 19 Chapter 1: Macroeconomic assessment and economic outlook......Page 41 Figure 1.1. Real GDP growth of Southeast Asia, China and India......Page 42 Table 1.1. Real GDP growth in ASEAN, China and India......Page 43 Box 1.1. Key assumptions of the medium-term outlook to 2023......Page 45 Table 1.2. Recent real GDP growth in ASEAN, China and India, 2017-18......Page 46 Figure 1.14. Goods exports of China and India, 2017-18......Page 65 Inflation picture is still mixed......Page 67 Figure 1.18. Portfolio and other investment inflows in Emerging Asian countries,2014-18......Page 72 Figure 1.20. Stock market returns in Emerging Asian countries, 2016-18......Page 74 Deficits in current account and fiscal position need to be monitored......Page 77 Banking sector is generally stable even though risk factors......Page 82 Challenges to robust growth......Page 85 Notes......Page 103 References......Page 104 Chapter 2: Towards smart urban transportation in Emerging Asia......Page 109 Box 2.1. What is a smart city?......Page 110 Table 2.1. ASEAN Smart Cities Network pilot cities......Page 112 Conclusion......Page 141 References......Page 142 Chapter 3: Structural policy country notes......Page 145 ASEAN-5......Page 147 Indonesia......Page 148 Malaysia......Page 156 Philippines......Page 161 Thailand......Page 172 Viet Nam......Page 180 BRUNEI DARUSSALAM AND SINGAPORE......Page 185 Brunei Darussalam......Page 186 Singapore......Page 191 CLM......Page 197 Cambodia......Page 198 Lao PDR......Page 205 Myanmar......Page 212 CHINA AND INDIA......Page 223 China......Page 224 India......Page 230 Chapter 4: Progress towards regional integration in Emerging Asia......Page 239 Introduction......Page 240 TRADE IN GOODS AND SERVICES......Page 242 INVESTMENT AND CAPITAL MARKET LIBERALISATION......Page 246 COMPETITION AND CONSUMER PROTECTION......Page 248 INTELLECTUAL PROPERTY......Page 250 Table 4.2. Progress in the ASEAN Highway Network project to connect and upgrade highways......Page 253 SMALL AND MEDIUM-SIZED ENTERPRISES......Page 255 FOOD, AGRICULTURE AND FORESTRY......Page 258 TOURISM......Page 260 Table 4.3. ASCC characteristics and key result areas......Page 262 Table 4.5. APAEC 2016-2025 programme areas......Page 266 Table 4.6. Focus areas of Initiative for ASEAN Integration Work Plans......Page 270 References......Page 274 Table A.1. Real GDP growth of Southeast Asia, China and India......Page 277 Figures......Page 10 Table 2. Availability of Fintech services in Emerging Asia......Page 22 Table 3. Fintech-related regulations in Emerging Asia......Page 23 Table 4. Publicly accessible transportation modes in selected Emerging Asian cities......Page 28 Figure 4. Households owning cars by wealth quintile in selected Emerging Asian countries......Page 29 Table 6. Structural policy challenges in Emerging Asian countries......Page 33 Table 7. Summary of progress of regional integration in Emerging Asia......Page 37 Box 1.5. Dollarisation in Cambodia, Lao PDR, Myanmar......Page 76 Table 1.4. Availability of Fintech services in Emerging Asia......Page 86 Table 1.6. Fintech regulatory agencies in Emerging Asia......Page 89 Figure 1.30. Average annual damage and average annual occurrence, 1998-2018......Page 98 Table 1.8. How Emerging Asian countries score on World Risk Index, 2012-16......Page 101 Box 2.2. Measurement of the impact of congestion on productivity......Page 114 Table 2.3. Share of trips to work by public transportation in selected cities......Page 116 Table 2.4. Public transportation fares in selected Emerging Asian cities......Page 117 Box 2.3. Non-motorised transportation in Emerging Asian cities......Page 118 Figure 2.4. Estimated total motor vehicles in use, 2005-15......Page 120 Table 2.7. Selected vehicle acquisition taxes and fees in Emerging Asia......Page 122 Table 2.8. Traffic conditions in Singapore during peak hours, 2004-14......Page 127 Box 2.6. Flexible working schedule is a stepping stone in achieving work-life balance......Page 133 Table 2.10. Land use distribution of Putrajaya, Malaysia......Page 138 Table 3.4.1. Targeted public and private investment into the EEC......Page 176 Box 3.4.1. Vocational schools in Thailand’s education system......Page 177 Table 3.5.1. PISA scores in 2015 for selected countries in the region......Page 182 Table 3.7.1. Singaporeans benefited from SkillsFuture, 2017......Page 195 Table 3.9.1. Sources of electricity production in Lao PDR, 2000-15......Page 207 Table 3.12.1. Entry routes and FDI caps in different sectors, 2017......Page 233 Table 4.1. Progress in Emerging Asia’s integration in key policy areas......Page 241 Table 4.4. ASEAN Framework Action Plan country coordinators and potential partners......Page 264 Table 4.7. Funding and implementation of Initiative for ASEAN Integration Work Plans I and II......Page 272 Table A.3. General government fiscal balances of Southeast Asia, China and India......Page 278 Figure 1. Intermediate goods exports to China, 2017......Page 24 Figure 2. Average annual damage as percentage of GDP and average annual occurrence of natural disasters, 1998-2018......Page 25 Figure 3. Traffic congestion for selected roads of Southeast Asian cities, 2018......Page 27 Figure 5. Share of trips to work by car in selected Emerging Asian cities......Page 30 Figure 6. Share of total urban population by density in Emerging Asian countries, 2015......Page 32 Box 1.2. Asian Games 2018 economic impact......Page 47 Figure 1.4. Gross exports YOY growth in Indonesia, Malaysia, the Philippines and Thailand, 2017-18......Page 49 Figure 1.5. Consumer confidence indices in Indonesia, Malaysia, the Philippines and Thailand, 2017-18......Page 51 Figure 1.6. Tourist arrivals (3-month rolling sum) in ASEAN-5 countries, 2017-18......Page 53 Figure 1.7. Contributions to growth in Brunei Darussalam and Singapore, 2016-18......Page 55 Figure 1.8. Goods exports of Brunei Darussalam and Singapore, 2017-18......Page 56 Figure 1.9. Contributions to growth in CLM countries, 2015-17......Page 58 Figure 1.10. Goods exports of CLM countries, 2017-18......Page 60 Figure 1.11. Contributions to growth in China and India, 2016-18......Page 62 Figure 1.13. Purchasing managers’ indices in China and India, 2017-18......Page 63 Figure 1.15. Foreign direct investment in Emerging Asian countries, 2014-18......Page 66 Figure 1.16. Inflation in Emerging Asia, 2017-18......Page 68 Box 1.4. Oil price pass through to inflation......Page 70 Figure 1.19. Nominal effective exchange rate in Emerging Asia, 2017-18......Page 73 Figure 1.22. Credit default swap spreads (5-year senior) in Emerging Asia, 2014-18......Page 75 Figure 1.23. Current account balances of Emerging Asian countries......Page 79 Box 1.6. Managing taxpayers’ compliance......Page 81 Figure 1.25. Bank lending in Emerging Asian countries, 2016-18......Page 83 Figure 1.27. Financial Literacy Index and Financial Product Usage Index, 2014-17......Page 93 Figure 1.28. Intermediate good exports to China as a percentage of GDP, 2017......Page 94 Figure 1.29. Emerging Asia’s forward and backward GVC participation in trade with China, 2011......Page 95 Figure 2.2. Traffic congestion for selected roads of Southeast Asia cities, 2018......Page 113 Figure 2.3. Walkability Index scores for selected Emerging Asian cities......Page 119 Figure 2.5. Households owning cars by wealth quintile in selected Emerging Asian countries......Page 121 Figure 2.6. Motor vehicles and transport tax revenue, 2013......Page 123 Figure 2.7. Households owning motorbikes or scooters by wealth quintile in selected Emerging Asian countries......Page 124 Figure 2.9. Annual median pump price for diesel and gasoline in Emerging Asian countries, 2016......Page 125 Box 2.4. Fuel and household transportation expenditure in the Philippines......Page 126 Figure 2.11. Road traffic fatalities in Emerging Asia, 2013......Page 128 Box 2.5. The effects of taxis, ride-sourcing and ride-sharing services on congestion......Page 129 Figure 2.13. Employees’ working hours flexibility in European countries, 2015......Page 134 Figure 2.14. Share of total urban population by density in Emerging Asian countries, 2015......Page 136 Box 2.8. Smart trade can facilitate cross-border transportation between border cities......Page 139 Figure 3.1.2. Access to mobile cellular and Internet, 2017......Page 150 Figure 3.1.4. Mobile money awareness......Page 151 Figure 3.3.1. Annual value added and annual compensation per paid employee in business process management, 2015......Page 167 Figure 3.6.1. Different types of establishments in Brunei, 2008......Page 188 Figure 3.8.1. Development of tourism in Cambodia, 2000-17......Page 200 Figure 3.8.3. Foreign visitors’ destinations in Cambodia, Q1 2017......Page 202 Figure 3.9.1. Value and share of electricity exports from Lao PDR, 2003-17......Page 208 Figure 3.9.2. Cost of electricity from utility-scale renewable energies, 2010 and 2017......Page 209 Figure 3.10.1. International arrivals and receipts in Myanmar, 1995-2015......Page 214 Figure 3.10.2. Biggest obstacle to operations reported by firms, 2016......Page 215 Figure 3.10.3. FDI Regulatory Restrictiveness Index in selected sectors in Emerging Asian countries......Page 216 Box 3.10.1. ASEAN initiatives are addressing common challenges in travel and tourism......Page 217 Figure 3.10.5. Contributions of travel and tourism to GDP in Emerging Asia, 2016......Page 220 Figure 3.11.1. Chinese patent applications have soared......Page 226 Figure 3.11.2. Productivity’s role in driving growth has fallen......Page 227 Figure 3.11.3. Research collaboration is less common in electronics and among smaller firms......Page 228 Figure 3.12.1. Innovation and technology use among Indian firms by ownership, 2014......Page 234 Figure 3.12.2. Firm distribution by ownership and municipality population, 2014......Page 235 Figure 4.1. GDP per capita and extreme poverty in Emerging Asia, 1990‑2016......Page 263 Figure 4.2. Changes in energy efficiency in Emerging Asian countries, 2005-2015......Page 267 Figure 4.3. Efficiency of customs clearance processes in ASEAN-6 and CLMV, 2016......Page 271 Boxes......Page 12 Box 1.3. Importance of the spill-over effects of infrastructure......Page 59 Box 1.7. Sendai Framework for Disaster Risk Reduction 2015-2030......Page 100 Box 2.7. Administrative and capital relations in Malaysia and Myanmar......Page 137 Box 3.1.1. The regulatory environment for P2P lending in the international market......Page 153 Box 3.5.1. New labour policies......Page 183 Box 4.1. Greater Mekong Sub-region co-operation on improving energy efficiency......Page 268