East Asia has shocked the world when at least 10 of the region’s emerging economies have showed significant economic growth, registering at 8.1 percent last year, the strongest so far recorded by the World Bank in the past 10 years.
This means that the region’s impoverished sector has constricted, as against previous figures recorded prior to the financial crisis that hit the region in July 1997 that caused many share prices to tumble as portfolio investments sagged, in favor of other more stable markets outside the region.
Independent economists said this positive development was never expected as the region is still reeling from the impacts of the financial crisis. But this time, the region is much wealthier than ever before, confirms the World Bank’s East Asia & Pacific Update, emailed to this writer.
Despite this, they have expressed worry that along with this success comes the many challenges for countries that are avoiding the middle income trap, says the bank’s recent press statement, datelined in Tokyo.
WB, however, warned that if this success is not handled properly there is a tendency that the growth will be derailed. And there is danger that some countries will be stuck at the low income to middle income level. Already, the World Bank predicted that by 2010, most of the East Asian countries are expected to be living under the middle income economy. Some of them will experience pressures due to environmental problems that are hard to sustain.
To stay away from future financial shocks, the World Bank adviced East Asian economies to strengthen their governance and investment climate so as to stay on the right course. It also prodded the region to diversify its capital markets, liberalized trade services, boosting education systems, and prudent macroeconomic policies.
"By 2025, the urban population is expected to jump by 65 percent or 500 million people, placing huge strains on already inadequate road, electricity, water and sanitation systems." the report added.