"The idea to move the capital, raised recently by President Yudhoyono, is actually not a new one. There are many valid reasons for Indonesia to have a new capital. Many urban planners believe nothing can be done to solve existing problems -- traffic chaos, environmental damage, worsening annual flooding, water shortage, air pollution, poor sanitation, etc. -- except to relocate some of its burdens elsewhere in the country.

Jakarta is no longer able to shoulder the excessive flow of people from across the country. The green spaces are decreasing to only less than 10 percent of the city's total area of 661.52 square kilometers -- far from the ideal 30 percent of the green space as stipulated in zoning laws. In such a condition, the city can no longer conserve rainwater properly. Land subsidence and seawater intrusion into the groundwater are serious environmental problems."

"What will it take for Bangladesh to transit to the middle income group? Bangladesh has succeeded in accelerating its per capita income growth from around 1 percent per annum in the 1970s to 4 percent now. A review of experience shows that policies including economic liberalization, investment in infrastructure and human development all contributed to higher growth by increasing the domestic saving and investment rates, boosting the growth of exports, and contributing to higher total factor productivity.

While the overall macroeconomic environment is favorable in terms of the foreign exchange situation, the investment effort is weak. Domestic investment rate is lower than the domestic saving rate, suggesting the need for better investment policies. Policy reforms need to focus on the investment climate, especially to attract foreign investment, by reducing the cost of doing business and improving competitiveness."

"Surging food prices in India threaten to trigger political unrest as concerns mount that rising inflation across the broader region will crimp Asia's economic recovery. Food prices have soared by almost 20 percent percent over the past year. The increase in the cost of staples such as rice and wheat, which has far outpaced wage increases, followed the worst monsoon in nearly four decades.

The central bank is now widely expected to lift interest rates amid concerns that public expectations of higher food prices will spill over into the broader economy -- a process that some analysts feel is already underway. Globally, also, there are concerns that food prices are remaining stubbornly high after a spike in 2008."

"One year after a financial crisis wrought devastation on the world's economy and pounded retail sales, shoppers in Asia are cautiously loosening their purse strings. From India to Indonesia, improving consumer sentiment is driving a general uptrend in spending amid stronger economic data. And low retailer inventories mean shops likely won't be slashing prices in a desperate bid to lure customers.

Industrial activity in Chinese factories has picked up after millions of workers were laid off last year, with toymakers in particular rushing to fill Christmas orders from the United States. Still, Thailand's retail sales have drooped in 2009 and the story isn't much better in Japan where price-chopping retailers are fighting to woo unenthusiastic shoppers through the door."

"Bangladesh last week sought foreign help to implement several mega projects in the communication sector that would cost about $6 billion. The projects include construction of Padma Bridge, Dhaka-Chittagong Expressway, Second Meghna and Meghna-Gumti Bridges on Dhaka-Chittagong Highway and 4-lanning of important sections of national highways. The government has also been making efforts to construct the missing links of the Asian Highway.

The Bangladesh government has already signed the Intergovernmental Agreement on the Trans-Asian Railway (TAR) Network and the cabinet this year also agreed to place the agreement before the Parliament for ratification. To strengthen the TAR network in Bangladesh, the government has already taken up a number of projects for implementation. They include double tracking of railways on Tongi-Bhairab bazar, Akhaura-Laksam and Laksam- Chinkiastana routes as part of Dhaka-Chittagong railway corridor."

"Nepal is a labor surplus and capital deficit country. Migration balances the land-population ratio in some cases while contributes to bridge the development gap by reducing income differentials and fostering productive cooperation between labor sending and labor receiving countries. Still, there is lack of supply-demand equilibrium as the propensity of population growth is becoming higher in developing countries compared to the ability of labor receiving countries to absorb.

More than 90 percent of Nepal's 11 million workers are working in informal sector without any social protection. The official data puts Nepal's poverty at 32 percent while the unemployment rate is as high as 42 percent. To address growing population, fragmentation of land and reduce the unsustainable burden on national political economy, the government of Nepal has opened 107 countries for foreign employment. But so far Nepalese are working in 77 countries."

"Asia's poor water storage capacity has caused large increases in groundwater exploitation, exacerbated by tubewells, loans, and subsidized power. The groundwater revolution has brought agricultural expansion, rural development, and poverty reduction. But excessive water-extraction means that many resources are now classified as critical or over-exploited.

Food demand is set to double by 2050; without water productivity gains the water needed will also double. In rapidly urbanizing developing countries, pressure of urban water supply is increasing. Urban-rural tensions over water are an urgent challenge, as is handling urban wastewater. Industrial water demand is expected to grow substantially in developing countries and has already started threatening even environmental flows."

"Thai villagers who help protect their local forests should be paid for their efforts, says the government's advisory body on biodiversity. The concept of payment for ecosystem services had been adopted in China, Costa Rica, Ecuador, Mexico and Vietnam.

A fund, such as China's forest ecological benefit compensation fund, would be created to pay villagers who devote their time and energy to taking care of forests near their homes. Money would come from private firms that benefit from the forests the villagers have saved."

"The first tentative moves by western banks and fund managers into microfinance are gathering momentum. Most of the big banks have set up divisions that provide financial services to low-income clients in emerging markets, particularly to those who have or wish to set up businesses. Many specialist fund managers have also entered the arena in recent years, working with providers on the ground to pool large numbers of small investments.

The infrastructure involved is burdensome and the returns uncertain, but this does not dim the belief of many in the sector that microfinance will outperform in the future. This belief is bolstered by the fact that many businesses and individuals in emerging economies are still starved of capital. To date, most international public and private-sector initiatives have revolved around extending credit to the poorest areas since this is seen as the best way of achieving returns. However, this model is under attack."

"It was five years ago on Boxing Day that the Indian Ocean tsunami struck coastal communities throughout much of South East Asia, leaving a black misery of bodies and ruined lives in its wake. The international response was unprecedented. Almost $7 billion of donations were pledged to the affected countries from across the globe, $4 billion of which was from individual donors, and thousand of NGO workers flew in to help organise the recovery effort.

The rebuilt infrastructure has also led to many improvements. Now a smooth, wide road cuts across the swathe of land once devastated by the tsunami and leads to Banda Aceh's new port. But some projects were at best ill-thought out. The gleaming $7 million building of a planned tsunami museum, still utterly empty and as yet unused, stands as an eye-catching, but perplexing, testament to the questionable splurging of cash."

Please share this e-newsline with others interested in the development of Asia-Pacific.

For questions, comments, complaints please visit our online contact form

To change your email address or to unsubscribe from ADBI e-newsline please visit:
http://www.adbi.org/e-newsline/subscribe.php

Sign-up for ADBI's free e-notification service to ensure you receive an e-mail when we post new publications and opportunities.

The stories and links selected and the views expressed in e-Newsline are those of the authors and editors and do not necessarily reflect the views or policies of the ADB Institute. The Institute does not endorse them and accepts no responsibility whatsoever for any consequences of their use. Original name usage is retained in quoted articles, although it may not necessarily follow ADB naming conventions.