Economic and Demographic Developments

The world
Asia-Pacific region

The world

During the last half century, there have been much economic, demographic and political changes around the globe. Between the early 1950s and the early 1970s, the world economy expanded continuously at unprecedented rates, and such drastic development not only profoundly changed nearly all national economies but also the organization of societies as well. As the result of this economic growth and social and technological changes which made it possible and resulted from it, standards of living, social structures, life styles, and expectations of the future were also changed in many parts of the world (United Nations 1986).

From 1973 on, the structure of the world economy changed. There was a pronounced downswing in the business cycle world-wide, caused essentially by the political and economic events of the "oil crisis". Coupled with this change was increased concern about pollution of the environment and sustainability of natural resources.

After the "oil crisis", several studies were done in the late 1970s and early 1980s of the directions and characteristics of the structural changes which were under way or had taken place in the world economy. They focused on the growth in total GDP, investment levels, inflation rates, "real" interest rates, unemployment rates, growth in labour productivity, and related issues.

Since the late 1980s, the world economy continues to adjust to the new economic realities following the break-up of the Soviet Union and the wave of economic liberalization in Eastern Europe and Asia. Recent macroeconomic experience shows unusual differences in the rates of economic progress across economies and regions as well as a slow recovery in many large economies. These differences reflect the continuing adjustment process in formerly centrally planned economies, drastic policy changes in some developing countries, and adjustments in the industrial world to imbalances that arose during the long economic expansion of the 1980s (World Economic and Social Survey, 1995).

Entering the 1990s, the pace of economic expansion around the world, especially in industrial countries, slowed somewhat, with another recession in 1992 and 1993. Japan experienced one of its most serious economic slowdown in the post-war period. Table 9 shows growth rates of real GNP, between 1988 and 1994. The world economy had a broad and vigorous recovery in 1994, following a few years of slow growth. Industrial countries, transitional economies and the developing world all registered generally improved growth. Economic growth in North America continued and a robust expansion began in Europe. The recession also bottomed out in Japan. Led by Asia-Pacific, growth in the developing regions was generally satisfactory. Among the countries in transition, economic performance in Russia and most other countries of the former Soviet Union remained poor. Several other transitional countries in Eastern Europe, however, had positive rates of growth for the first time in several years (Asian Development Bank 1995).

Table 9. Growth rate of real GNP (percent per year), 1988-1994.

		1988	1989	1990	1991	1992	1993	1994
World		4.1	3.1	2.2	0.1	0.7	0.9	2.1
Industrialized Countries		4.5	3.3	2.5	0.5	1.5	1.1	2.8
United States		4.4	2.5	1.0	-1.2	2.3	3.1	4.0
	Japan	5.7	4.9	5.2	4.0	1.1	0.1	0.8
	Germany	3.6	3.9	4.5	1.0	2.2	-1.1	2.8
Developing Countries		4.6	3.6	2.6	3.4	5.5	5.4	4.9
	Africa	2.2	2.6	2.5	1.5	0.2	1.7	2.3
	Asia	9.3	5.7	6.2	6.1	7.5	7.9	8.2
	Latin America	-0.2	1.0	-0.9	2.8	2.5	3.2	3.9
	Middle East and Europe	2.2	3.7	0.7	0.0	7.0	4.8	1.2
Countries in Transition		1.8	1.5	-4.9	-9.7	-15.5	-9.7	-9.1

Source: Asian Pacific Outlook (Asian Development Bank 1988-1995).

The volume of world trade also increased fast over the last decade as import demand of industrial economies recovered, Latin America continued to open its markets and intra-regional trade within Asia expanded rapidly. The successful completion of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT), the signing of the North America Free Trade Agreement (NAFTA) and the Association of Southeast Asian Nations (ASEAN) Free Trade Area (AFTA) along with promising developments in the Asia-Pacific Economic Cooperation (APEC) gave further stimulus to trade.

Today the world is experiencing the most rapid increase in human population ever seen. Each year from now until well into the 21st Century, more than 90 million people will be added to the world total. Public perceptions of global population growth and policy responses to that growth range from pessimistic (population growth is the most pressing problem facing humanity) to optimistic (population growth is not a problem but a motor of economic development). Still, the world population increased from 3.1 billion in 1962 to 5.5 billion in 1992 and is projected to reach approximately 10 billion by the year 2050.

Although populations in other regions are not increasing as rapidly as in Africa, or in Asia, individual countries will see drastic changes. For example, many of the poorer countries of Central and South America are expected to experience great increases in population over the next 30 years. Figure 2 shows the distribution of population world-wide in 1992. Asia has the largest share with 59%, followed by Africa with 13 %, and Europe with 9 %.

Asia-Pacific region

The total population of the Asia-Pacific region in 1992 was 3 billion, or 55% of the world's total. Table 10 shows the population by country and territory in the region from 1962 to 1992. China is the most populous country in the world with nearly 1.2 billion people in 1992, followed by India with 884 million, Indonesia with 184 million, Japan with 124 million, Pakistan with 119 million and Bangladesh with 114 million. While the population of Asia-Pacific has grown at the same rate as other regions of the world, China's population growth has been quite low since the 1970s, due to the strictly enforced government population control policy.

Figure 2. World share in population, 1995 (source: World Resources Institute, 1994).

Asia-Pacific's remarkable economic growth has improved its standard of living significantly. Real per capita GNP grew steadily up until the early 1980s (Figure 3). Since then, it has risen faster. The region's real per capita GNP had tripled between 1962 and 1992, from $438 to $1,310, while the world average grew by 75%, from $1,688 to $2,956, during the same period.

During the 1980s and early 1990s, the economic development in the Asia-Pacific region was characterized by a sharp acceleration in China's economy, significant growth in newly industrialized economies and creditable progress in the transitional economies of Asia. The developing countries' strong economic performance has been helped by sustained domestic demand and export growth as well as by the favourable impact of policy reforms adopted in recent years. Consumer demand remained strong because of significant gains in disposable incomes during recent years. Investment also has shown strong growth in many developing countries, reflecting a rapid rise in private investment and in public spending on infrastructure.

Table 10. Population, in thousand, in countries and territories of the Asia-Pacific.

Country	1962	1972	1982	1992
Australia	10742	13177	15178	17483
Bangladesh	54770	70445	90725	114000
Bhutan	700	1090	1289	1587
Cambodia	5700	7490	6606	9054
China	677284	877319	1027058	1187997
Fiji	421	542	658	750
French Polynesia	90	120	158	207
Hong Kong	3154	4012	5120	5755
India	454373	573130	718426	884000
Indonesia	99568	123360	154245	184000
Japan	95837	107188	118449	124000
Korea Dem People's Rep	11140	14660	18901	22618
Korea Rep	25420	32596	38723	43268
Laos	2450	3110	3334	4469
Macau	230	250	308	374
Malaysia	8704	11408	14510	18606
Myanmar	22736	28385	34844	43668
Nepal	9769	11890	15423	20577
New Caledonia	90	130	144	177
New Zealand	2428	2854	3145	3406
Pakistan	48437	64610	87736	119000
Papua New Guinea	1975	2482	3148	3964
Philippines	29613	39778	50800	64259
Samoa	120	150	158	158
Singapore	1751	1933	2366	2818
Solomon Islands	130	170	242	342
Sri Lanka	10135	12608	14988	17190
Thailand	28049	38017	48740	57992
Tonga	70	90	95	97
Vanuatu	70	90	124	157
Viet Nam	32130	43650	56115	69306
Asia Pacific	1638086	2086734	2531756	3021279
World	3126402	3782000	4607000	5479000
Share	52%	55%	55%	55%

Over the last ten to fifteen years, a number of Asia-Pacific countries, including China, the Lao People's Democratic Republic, Mongolia, Myanmar and Viet Nam, have been implementing economic reforms, shifting from centrally planned, state-directed regimes to more decentralized, market-oriented economic systems. In some respects, the liberalization of these transitional economies in the Asia-Pacific is parallel to the dramatic changes taking place in Eastern Europe and the Commonwealth of Independent States, many similar issues have to be faced in the reform process - the construction of the instruments of macro-economic reforms, for example, and the choice of the organization of enterprises. However, in many respects the Asia-Pacific experience is different, because of its long distinct cultures.

As shown in Table 9, the remarkable economic vigour of the Asian-Pacific region continued to be evident in 1994, with economic growth for Asia being even higher than in 1993 at 8.2%. In this respect developing Asia continued to outperform by a wide margin both other developing regions (4.9%) and industrial countries (2.8%) as a group. These growth rate gaps are, however, likely to narrow over the next few years, as the developing countries in Africa, the middle East and Europe as well as the industrial countries are set to improve economic growth performance. But as in years past, the fastest growing economy will still be concentrated in the Asia-Pacific. The top 10 developing countries which are expected to have faster economic growth in 1995 are all in the Asia-Pacific region. They are, in descending order, China, Viet Nam, Singapore, Thailand, Malaysia, the Republic of Korea, Indonesia, Papua New Guinea, Myanmar and Sri Lanka. The forecast growth rates for those countries range from 10 to 6% (World Economic and Social Survey, 1995).

Figure 3. Population and real GNP per capita in the Asia-Pacific region.

Figure 4 presents the annual growth rates of real GDP from 1980 to 1991 for countries and territories of the Asia-Pacific and the world average. The majority of countries in the region had faster economic growth than the countries in other world regions. The average annual growth rate of real GDP for Asia-Pacific over the period was 5.5%, compared to a world average of 3%. The fastest growing economies were the Republic of Korea with 9.6%, China with 9.4%, and Thailand with 7.8%.

The Asia-Pacific region enjoys a dominant position in the tropical timber and timber products trade of the world. For many developing countries of the region, export of forest products is an important source of foreign exchange earnings. In addition, to capture the benefits flowing from the backward and forward linkages and multiplier effects of forest utilization (in terms of employment, income and value added) countries are taking action to establish and expand processing industries and to increase the share of processed wood products in their exports.

Figure 4. Average annual growth rate of real GDP, 1980-1991 (sources: World Resources Institute and FAO).