Asian Economic Integration Report 2018

Toward Optimal Provision of Regional Public Goods in Asia and the Pacific

This publication is the annual report of the Asian Development Bank (ADB) on Asia’s progress in regional cooperation and integration. It covers ADB’s 48 regional members and analyzes regional and global economic linkages. This year’s special chapter, “Toward Optimal Provision of Regional Public Goods in Asia and the Pacific,” examines how collective action among countries can help find solutions to growing transnational development challenges. It discusses how to best provide regional public goods (RPGs) that transcend the so-called “collective action problem,” which occurs when individual interests are too weak on their own to drive cooperation on common issues. The chapter suggests that multilateral development banks should act as honest broker in enhancing mutual trust and facilitating regional cooperation for RPGs.


  • The Asia and Pacific region maintains healthy economic growth outlook.



  • The Asia-Pacific Regional Cooperation and Integration Index shows that infrastructure and connectivity are the key drivers of regional integration in Asia.



  • Asia continues to lead a recovery in global trade.



  • Asia’s trade integration remained strong, providing the region a shield from potential headwinds.



  • Despite a slowdown in inward FDI to Asia, intraregional FDI continues to rise.





  • Global outward FDI decreased 2.9% in 2017, primarily due to a drop in FDI from developed economies; outward investment from Asia weakened only 1.4%.




  • Asia remains the largest source of international migrants.




  • A record $275.5 billion in remittances were channeled to Asia in 2017.




  • Tourism is the main source of income for many economies in the Pacific and Southeast Asia.




  • Intraregional tourism continues to expand but a growing share of Asian tourists is heading to non-Asian destinations.




  • Asia’s local bond and equity returns have become more sensitive to global shocks since the US monetary policy normalization began.




  • Increasing sensitivity to global shocks highlights Asia’s strong global links and reflects uncertainties surrounding the changes in global financial conditions.




  • Multilateral development banks can help increase regional public goods via knowledge generation, financing, enhancing mutual trust, and facilitating regional cooperation for the provision of regional public goods.




  • More effort is needed in measuring spillover benefits of regional public goods and identifying potential beneficiary countries.




Contents:

Cover and Highlights

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Regional Economic Outlook and Development Challenges

  • Economic Outlook and Risks
  • Development Challenges: Vulnerabilities to Economic, Environmental, and Social Shocks
  • Regional Integration as Development Strategy
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Trade and the Global Value Chain

  • Recent Trends in Asia’s Trade
  • Asia’s Intraregional Trade
  • Progress of Global and Regional Value Chains
  • Updates on Regional Trade Policy
  • Trade Remedies
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Foreign Direct Investment

  • Trends and Patterns of Foreign Direct Investment in Asia
  • Outward Foreign Direct Investment
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Financial Integration

  • Asia’s Cross-Border Financial Assets and Liabilities
  • Inward Portfolio Investment
  • Outward Portfolio Investment
  • Inter- and Intra-Subregional Portfolio Investment
  • Bank Holdings
  • Analysis Using Price Indicators
  • Financial Spillovers
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Movement of People

  • Migration
  • Remittances
  • International Tourism Receipts and the Movement of Tourists
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Subregional Cooperation Initiatives

  • Central and West Asia: Central Asia Regional Economic Cooperation Program
  • Southeast Asia: Greater Mekong Subregion Program
  • East Asia: Support for RCI Initiatives under CAREC and GMS Subregional Programs and Knowledge-Sharing Activities
  • South Asia: South Asia Subregional Economic Cooperation
  • The Pacific: Building Regional Disaster Resilience through Contingent Financing
  • Improving the Provision of Public Goods through Regional Cooperation
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Toward Optimal Provision of Regional Public Goods in Asia and the Pacific

  • Introduction
  • Concepts, Typologies, and Issues in Efficient Provision
  • Regional Public Goods in Asia
  • Measurement Issues and Case Studies on Provision Mechanisms
  • Conclusions and Policy Considerations
  • Background Papers
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Statistical Appendix

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Infographics:

Trend in Asia’s Merchandise Trade
31
Oct
2018

Trend in Asia’s Merchandise Trade

The recovery in global trade continued in 2017 with Asia leading the pace—bolstered by the strengthening trade integration of the region.

Asia’s regional integration progresses steadily
23
Oct
2018

Asia’s regional integration progresses steadily

Regional integration in Asia and the Pacific is strengthening, with trade and foreign direct investment leading while financial integration lagging.

Trend in Asia’s Global Value Chain Participation
23
Oct
2018

Trend in Asia’s Global Value Chain Participation

The simultaneous recovery in global and regional trade can be attributed to the expansion of the global value chain (GVC)—after a continued slowdown since 2012—with Asia’s GVC participation rebounding as well.

Job creation through greenfield foreign direct investment
23
Oct
2018

Job creation through greenfield foreign direct investment

Asian investors have been a major contributor to greenfield FDI job creation in the region—generating more jobs per investment and benefiting manufacturing industries.

AEIR 2018 Theme Chapter: Toward Optimal Provision of Regional Publics Goods in Asia and the Pacific
23
Oct
2018

AEIR 2018 Theme Chapter: Toward Optimal Provision of Regional Publics Goods in Asia and the Pacific

Understanding how an individual nation’s contribution adds to the overall provision of RPGs can help RPG suppliers, including nations and multilateral development banks alike, take the most appropriate modes of provision to avoid the collective action problem.












Asian Economic Integration Report 2017

The Era of Financial Interconnectedness: How Can Asia Strengthen Financial Resilience?

Cover and Highlights


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Regional Outlook, Linkages, and Vulnerabilities


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Trade and the Global Value Chain


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Cross-border Investment


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Financial Integration


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Remittances and Tourism Receipts


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Subregional Cooperation Initiatives


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Asia-Pacific Regional Cooperation and Integration Index


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Theme Chapter: "The Era of Financial Interconnectedness: How Can Asia Strengthen Financial Resilience?"


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Statistical Appendix


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Asian Economic Integration Report 2016

What Drives Foreign Direct Investment in Asia and the Pacific?

Contents:

Cover and Highlights


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Economic Outlook and Resilience


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Trade and Global Value Chain


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Financial Integration


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Movement of People


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Subregional Cooperation Initiatives


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Special Theme: What Drives Foreign Direct Investment in Asia and the Pacific?


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Statistical Appendix


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Asian Economic Integration Report 2015

How Can Special Economic Zones Catalyze Economic Development?

Contents:

Cover and Highlights


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Progress in Regional Cooperation and Integration


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Special Chapter: How Can Special Economic Zones Catalyze Economic Development?


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Statistical Appendix


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