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Narrowing the development divide in ASEAN : the role of policy
Author(s) -
Me Jayant
Publication year - 2013
Publication title -
asian‐pacific economic literature
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.232
H-Index - 21
eISSN - 1467-8411
pISSN - 0818-9935
DOI - 10.1111/apel.12025
Subject(s) - inclusive growth , economics , development economics , sustainable growth rate , foreign direct investment , sustainability , international economics , economic growth , poverty , macroeconomics , ecology , finance , biology
A ssociation of S outheast A sian N ations ( ASEAN ) is divided. Most striking is the development divide that separates the newer members (the C ambodia, L ao P eople's D emocratic R epublic, M yanmar, and V ietnam countries) from the original ones ( ASEAN ‐6). More rapid growth in the CLV since the 1990s, driven by trade, investment, and other market reforms, has reduced these income differences. While the development divide has narrowed, huge gaps remain. Further narrowing of these gaps will require an increase in the speed and the breadth of policy reforms. A gaping hole in the policy landscape in ASEAN is the failure to address labour mobility adequately. Ongoing demographic transitions will result in greater labour outflow. The current policy void on labour migration not only limits the benefits from trade and investment liberalisation but also increases the cost of structural adjustment. Although rapid growth has resulted in convergence between countries, it has increased polarisation within countries. This can threaten social cohesion, as well as the sustainability of future growth. In order to make growth more inclusive, there is a need to invest more in education and health and to institute land reform. Apart from directly reducing social and asset inequities, such policies will produce a workforce more able to participate in the growth process and adapt to structural change.