ADBI E-Newsline

"Amid all the security concerns over the current withdrawal of NATO forces from Afghanistan after their failure to defeat the resurgent Taliban, the disastrous state of the landlocked Afghan economy has been all but forgotten. But once most NATO troops have gone in 2014, billions of dollars of annual aid for Afghanistan will be essential for decades if the country is to manage its own security, educate its children and modernize the economy, according to foreign donors and international financial institutions.

The International Monetary Fund estimates Afghanistan's current account deficit at 45 percent of gross domestic product, and has postponed the prospect of 'fiscal sustainability' until after the distant year 2032. Last year's legal exports, including fruit and nuts, handmade carpets and semi-precious stones, were estimated at $376 million by the US Central Intelligence Agency -- about one 17th of the value of imports."

"If Indonesia wants to escape the middle-income trap, it should invest heavily in information technology and open the market for 4G operators. Research claims that every 10 percent of improvement in Internet penetration can potentially add up to 1.4 percent to gross domestic product and every doubling of Internet speed adds another 1 percent to a country's GDP.

Unfortunately, few new investments are being made today. Part of the problem lies with the current infrastructure, which is dominated by incumbent 2G and 3G players. Having invested heavily, it is natural that these players are keen to protect their market share. But this is holding back the country. The Republic of Korea, an advanced country, provides Internet access to all its citizens and businesses, helping them drive trade and promote innovation. In Indonesia, however, Internet access costs are among the highest in the world."

"Accounting for over 80 percent of Thailand's 2.5-million-strong migrant labor force, Burmese migrants provide a lifeline to cash-strapped families back in Myanmar, one of Southeast Asia's poorest countries that is struggling to recover from decades of economic stagnation. Today, the minimum wage in Myanmar -- about 180 dollars a month -- buys eight to 10 times fewer daily consumption commodities like rice, salt, sugar and cooking oil than it did 20 years ago.

According to a 2006 survey of migrant workers from Myanmar, conducted by the Asian Research Centre for Migration, more than two-thirds of the 600 respondents admitted to being unemployed before migrating to Thailand. While migrant workers fill crucial gaps in Thailand's labor market, and their remittances account for five percent of Myanmar's gross domestic product, neither government has attempted to make the flow of money between workers and their families any easier."

"Children's laughter rings out from bamboo huts along the perimeter of the Lana Zup Ja camp for internally displaced persons (IDPs) in a part of Myanmar's Kachin State controlled by the Kachin Independence Army (KIA). A group of pre-schoolers are playing in a plywood hut, seemingly oblivious to the squalid conditions surrounding them.

The playground-cum-learning center is one of six new 'child-friendly spaces' that local NGO Wing Pawng Ningthoi has built in IDP camps in Kachin State. According to the UN, over 83,000 residents are displaced in Kachin State, including 47,000 in KIA-controlled areas. This number, however, does not include those living with host families or the many who fled to neighboring Shan State."

"High-speed railway lines connecting Thailand, Lao and China might soon become a reality after the Thai cabinet met with its Lao counterparts in Chiang Mai earlier this week. The proposal would have a major impact on the region as there is currently only vehicle crossing from ASEAN countries into China. Thailand and China are planning to spend billions on countrywide railroad infrastructure.

But in Lao PDR, the plan will be nothing short of radical as the country's rail networks are practically non-existent. The proposed massive rail projects will require loans totaling over half of the country's GDP, which was $8.3 billion in 2011, according to the World Bank. Rail links are not a surefire benefit to the Lao economy."

"The government of Viet Nam has always been keen to export labor since it meant providing jobs for more people, jobs that could not be generated at home, but a failure to properly manage the system is coming home to roost. The policy is focused almost entirely on sending workers abroad, and nothing is done to ensure they return once their contracts expire and their skills are used back home.

Many workers who go abroad for jobs overstay their visas since they fear they will not get jobs if they return to Viet Nam. As a result, the country's main markets are closing their doors to its workers. In the early 2000's Viet Nam benefited much from this policy, with exports of labor growing, especially to markets like the Republic of Korea, Malaysia, and Taipei, China."

"Tourism officials in Thailand downplayed the impact of Tuesday night's power outage in the south, but tourism operators and the country's biggest private-sector association expressed fears for their business and demanded the government take steps to ensure that such a situation does not happen again.

Suraphon Svetasreni, governor of the Tourism Authority of Thailand, said its office in the southern region had collected information on the effects of the power cut, which hit 14 southern provinces on Tuesday evening, and found nothing to worry about so far. Phuket International Airport continued normal operations because it has generators able to provide power for more than three hours."

"The Philippines is now rated investment grade and the economy is performing better than many others in Asia, but there are still too many indicators that the benefits of growth aren't reaching the masses. A recent report from the World Health Organization (WHO) showed that the Philippines is lagging behind many developing countries including some of the poorest in Africa in eliminating maternal and neo-natal tetanus or MNT.

A vaccine against MNT costing about $2 has been available for some time, with over 118 million women of child-bearing age vaccinated in 52 countries since 1999. Under the WHO's MNT Elimination Initiative, 59 countries including the Philippines were classified as priority areas. Today the Philippines is one of 28 countries where the potentially fatal but preventable disease has not been eradicated, according to the WHO report."

"Indian companies have invested nearly $1 billion in Sri Lanka since 2003 and this figure could rise above $2 billion in the next five years, Indian envoy to Colombo Ashok K Kantha said. With investment inflows of $160 million in 2012, nearly $2 billion worth of FDI had been committed by Indian companies for the next five years or so, he added.

Kantha highlighted that in 2011-12, India's imports from Sri Lanka went up by almost 45 percent to cross $720 million, making Sri Lanka the largest source of merchandise from the South Asian region for India. Also Sri Lanka's exports to India had multiplied by over 16 times in this period, while India's exports to Sri Lanka had gone up by less than 7 times."

"China and Pakistan have said they will set up an economic corridor to further connect their two economies. The announcement came as Premier Li Keqiang arrived in Islamabad less than two weeks after the Pakistani general election. Officials and experts said the huge plan will greatly support Pakistan's efforts to revive its economy. Li met with Pakistani President Asif Ali Zardari and with interim prime minister Mir Hazar Khan Khoso on Wednesday afternoon.

Li said at a joint press conference with Zardari that China and Pakistan have agreed on a long-term plan for an economic corridor to further connect central and western parts of China with Pakistan. 'China and Pakistan would like to closely link China's (plans) for expanding domestic demand and developing the western regions with Pakistan's plan for developing its domestic economy,' Li said."

"The International Monetary Fund (IMF) has made positive assessments on Viet Nam's macroeconomic situation as well as the policy management of the State Bank of Vietnam (SBV). A press release, posted after the IMF concluded its annual consultation mission to Viet Nam in late April, said that the country's macro-economy has shown signs of recovery mainly thanks to strong exports.

It pointed out that the country's headline inflation reduced from double digits to about 7 percent year-on-year in March, while calm has returned to the financial market with the SBV's efforts to provide liquidity and the merger of several small, weak banks. The achievements gained during the macroeconomic and financial market stabilization in 2012 helped improve the credibility of the SBV with market participants, the IMF affirmed."

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