The World Bank called for a policy agenda for inclusive growth that can constitute a new social contract for governments across the region.
In its latest report “Riding the Wave: an East Asian miracle for the 21st century”, the World Bank classifies China and Vietnam as “Out-of-Poverty-into Prosperity”, Malaysia and Thailand as “Progressive Prosperity”, Indonesia, the Philippines, and Cambodia as “Out-of-Extreme-Poverty”, while Laos and Papua New Guinea as “lagging progress” countries with still high levels of poverty.
The report recommended “Growth that is inclusive – one that reduces poverty while providing upward mobility and economic security for all – will require countries to go beyond its successful “growth with equity” model.
“Prospects for upward mobility are seen as increasingly elusive, reflecting a sense that income and wealth are becoming more concentrated while access to basic social services remains limited and often of poor quality,” the report said.
“Achieving economic security for all is more difficult, particularly as the region faces newer challenges: rapid aging, less certain growth prospects, and greater urbanization.”
However, “Inequality” remains a growing concern as stated in the report. “In Indonesia, almost 90 percent of the population thinks it is urgent to address inequality, while eight in 10 urban residents of Vietnam worry about disparities in living standards.”
The World Bank report suggested three pillars that can underpin the policy agenda including fostering economic mobility, providing greater economic security and strengthening institutions.
Sudhir Shetty, World Bank chief economist for the East Asia and Pacific region, suggested that the economic miracle in China over the past 20 years can be emulated by regions in the Asia Pacific.
“China’s biggest resource has always been in its people, the size of its population and the massive land space China has,” said Sudhir. “The one thing that other countries may want to learn from China’s economic success is China’s exports, and the government’s ability to put all exporters at equal footings.”
The report suggested that measures to alleviate extreme poverty in Laos and Papua New Guinea will require investing in basic education and promoting financial inclusion while also strengthening social assistance and resilience.