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321. Global Growth and Distribution: Are China and India Reshaping the World?

Author:
Dominique van der Mensbrugghe, Maurizio Bussolo, Rafael E. De Hoyos, and Denis Medvedev
Publication Date:
03-2008
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Over the past 20 years, aggregate measures of global inequality have changed little even if significant structural changes have been observed. High growth rates of China and India lifted millions out of poverty, while the stagnation in many African countries caused them to fall behind. Using the World Bank's LINKAGE global general equilibrium model and the newly developed Global Income Distribution Dynamics (GIDD) tool, this paper assesses the distribution and poverty effects of a scenario where these trends continue in the future. Even by anticipating a deceleration, growth in China and India is a key force behind the expected convergence of per capita incomes at the global level. Millions of Chinese and Indian consumers will enter into a rapidly emerging global middle class—a group of people who can afford, and demand access to, the standards of living previously reserved mainly for the residents of developed countries. Notwithstanding these positive developments, fast growth is often characterized by high urbanization and growing demand for skills, both of which result in a widening of income distribution within countries. These opposing distributional effects highlight the importance of analysing global disparities by taking into account—as the GIDD does—income dynamics between and within countries.
Topic:
Development, Economics, and Poverty
Political Geography:
Africa, China, India, and Asia

322. International Integration and Regional Development in China

Author:
Thomas Gries and Margarete Redlin
Publication Date:
07-2008
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Concerns about the duration of China's growth and hence the question of a permanent significant contribution of China to world economic growth relate, amongst other things, to the problem of reducing regional disparity in China. While China's high average growth is driven by a small number of rapidly developing provinces, the majority of provinces have experienced more moderate development. To obtain broad continous growth it is important to identify the determinants of provincial growth. Therefore, we introduce a stylized model of regional development which is characterized by two pillars: (i) International integration indicated by FDI and/or trade lead to imitation of international technologies, technology spill overs and temporary dynamic scale economies, and (ii) domestic factors indicated by human and real capital available through interregional factor mobility. Using panel data analysis and GMM estimates our empirical analysis supports the predictions from our theoretical model of regional development. Positive and significant coefficients for FDI and trade support the importance of international integration and technology imitation. A negative and significant lagged GDP per capita indicates a catching up, non steady state process across China's provinces. Highly significant human and real capital identifies the importance of these domestic growth restricting factors. However, other potentially important factors like labor or government expenditures are (surprisingly) insignificant or even negative. Further, in contrast to implications from NEG models indicators for urbanization and agglomeration do not contribute significantly.
Topic:
Development
Political Geography:
China and Asia

323. From bear to bull? Sub-Saharan Africa and Global Capital Markets

Author:
Sam Jones
Publication Date:
01-2008
Content Type:
Policy Brief
Institution:
Danish Institute for International Studies (DIIS)
Abstract:
The current boom in global commodity prices and the expansion of Chinese interests in sub-Saharan Africa are part of a general warming of external investors to the region. This policy brief examines trends in commercial financial instruments such as equities, bonds and commercial bank lending and their impact on economic development. It reviews the nature and behaviour of these instruments in developing countries compared with more traditional development finance, such as foreign aid. This provides a foundation for analysing past and present trends in sub-Saharan Africa. It is argued that, like many other low income countries in the past, sub-Saharan Africa has received negligible inflows of external commercial financing. If anything, the region has been additionally excluded from these flows due to very weak levels of financial sector development even compared to other low income countries. At the same time, recent changes in global and domestic conditions mean that the situation is evolving rapidly. There is mounting evidence to show that many economies in sub-Saharan Africa are enjoying significantly expanded access to commercial external capital flows. Given good prospects that this trend will continue, the playing field for traditional donors is likely to alter significantly. The brief concludes by reflecting on how donors might respond to these emerging policy challenges.
Topic:
Development, Markets, and Non-Governmental Organization
Political Geography:
Africa and China

324. Privatization, Efficiency, Gender, Development, and Inequality—Transnational Conflicts Over Access to Water and Sanitation

Author:
Srini Sitaraman
Publication Date:
01-2008
Content Type:
Journal Article
Journal:
Human Rights and Human Welfare - Review Essays
Institution:
Josef Korbel Graduate School of International Studies, University of Denver
Abstract:
The global supply of freshwater is finite and current estimates put freshwater availability at less than one-half of one percent of the total water stock. Intensive agriculture practices, rapid industrialization, and expanding population and urbanization are reducing freshwater supplies that are further stressed by climate change, placing enormous pressures on the already fragile environmental landscape. The World Wildlife Federation's (WWF) Dam Initiative report identifies twenty-one river basins around the world at severe risk of ecological degradation: topping the list is the Yangtze in China, La Plata in South America, Tigris and Euphrates in Turkey, and the Ganges and Brahmaputra in India (WWF 2004). Although dams have proved to be a boon for irrigation and generating hydroelectric power, they have also severely disrupted ecosystems by interrupting the flow of major rivers, destroying freshwater habitats and leading to the disappearance of unique species, such as the freshwater river dolphins; dams have uprooted the livelihood of millions of people who rely on the unaltered flow of river water, and they have also disrupted the structure of floodplain agriculture. India and China are two of the starkest examples of human dislocation, conflict, and environmental denudation caused by dams (Economy 2004). According to the World Bank, India's growing water crisis is resulting in “little civil wars”: (a) between states, (b) between different users in a river basin, (c) between communities and the state, (d) between farmers and the environment, and (e) between farmers and the city consumers (World Bank 2005). India's former Minister of Water Resources, Priyaranjan Das Munshi was quoted as saying, “I am not the Minister of Water Resources, but the Minister of Water Conflicts” (UNESCO 2006). The World Bank (2005: 5) report on India's Water Economy describes India's water situation, which is heavily dependent on unpredictable and seasonal monsoons, as turbulent and unsustainable in the long run.
Topic:
Development and Health
Political Geography:
China, Turkey, India, and South America

325. Approaching a Triumphal Span: How Far Is China Towards its Lewisian Turning Point?

Author:
Fang Cai
Publication Date:
02-2008
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
With the aid of an analytical framework of the Lewis model revised to reflect the experience of China, this paper examines the country's dualistic economic development and its unique characteristics. The paper outlines the major effects of China's growth as achieved during the course of economic reform and the opening-up of the country: the exploitation of the demographic dividend, the realization of comparative advantage, the improvement of total factor productivity, and participation in economic globalization. By predicting the long-term relationship between the labour force demand and supply, the paper reviews the approaching turning point in China's economic development and examines a host of challenges facing the country in sustaining growth.
Topic:
Development and Economics
Political Geography:
China and Asia

326. Beyond Industrialization: New Approaches to Development Strategy Based on the Service Sector

Author:
Peter Sheehan
Publication Date:
05-2008
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Industrialization occupies a central place in the rich tapestry of development theory and practice. Although that place has varied over time, many have agreed with Nicholas Kaldor that the kind of economic growth that leads to high real income per capita can only occur through industrialization. This paper argues that it is becoming increasingly difficult for most developing countries to achieve rapid growth through industrialization, and especially through export oriented activities. But the key mechanisms seen as driving the industrial take-off in much of the literature (internal increasing returns, transfer of labour into higher value activities and pecuniary externalities) are alive and well, and are evident in services as well as in industry. Furthermore, China is actively trying to move from a strategy based on industrialization to one based much more on agriculture and services, as the costs of the current pattern of industrialization become prohibitive, and India has demonstrated that rapid growth based primarily on the services sector is possible. Thus more attention needs to be given to strategies based on the expansion of the agricultural and services sectors, and to the ways in which better services in rural areas and higher rural output can combine to achieve rapid growth and improved human welfare in poor countries.
Topic:
Development
Political Geography:
China, India, and Asia

327. China and the Future of the Developing World: The Coming Global-Asian Era and its Consequences

Author:
Jeffrey Henderson
Publication Date:
05-2008
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The rise of China as an economic and political 'driver' of the global economy is likely to be one of the defining moments of world history. Its dynamism and international expansion are on the verge of creating a 'critical disruption' in the global order that has held sway for over 60 years. As such, China is beginning to reshape the world, presaging a new phase of globalization: a 'global-Asian era'. This new era is likely to be distinct from any of the earlier phases of globalization and China's global footprint, in terms of its business, economic and political actions and their geopolitical implications, is likely to be markedly different from what has gone before. This paper offers a framework by which we can begin to understand the coming global-Asian era (GAE) and some of its consequences, particularly as the latter are surfacing in the developing world. Having discussed the nature and dynamics of the GAE, the paper turns to sketch a series of vectors (trade, aid and energy security) along which the GAE is beginning to impact on developing countries. The paper argues that, at least for these vectors, the Chinese-driven GAE is providing opportunities as well as dangers for national development projects. It concludes by briefly speculating on the viability of the GAE.
Topic:
Development, Globalization, International Political Economy, International Trade and Finance, and Oil
Political Geography:
China and Asia

328. China's Development Strategy and Energy Security: Growth, Distribution and Regional Cooperation

Author:
Haider A. Khan
Publication Date:
05-2008
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper analyses both global and regional approaches to solving problems of energy security and ecological imbalance by addressing specifically the problems of China's energy security. China's growing energy dependence has become a major concern for both economic and national security policymakers in that country. The ambitious goal of modernization of the economy along the lines of the other newly industrialized economies (NIEs) of Asia has succeeded only too well, and it is difficult to reorient economic priorities. If examined rigorously, such an economic strategic assumption can be seen to entail the goal of creating further technological capabilities. In particular, China seems to be firmly committed to the creation of a largely self-sustaining innovation system as part of a knowledge-based economy of the future. Such innovation systems, called positive feedback loop innovation systems or POLIS have been created by advanced countries, and NIEs such as South Korea and Taiwan are proceeding to create these as well. But this will add to its energy burden and further dependence on the US as the power which controls the key sea lanes. Only a strategic reorientation to building a self-sustaining POLIS and appropriate regional cooperation institutions can lead to the way out of the current dilemma for China. Fortunately, such a model of POLIS which is distributionally and ecologically sensitive can be built for China and applied strategically to lead towards a sustainable development trajectory.
Topic:
Development, Energy Policy, Environment, and Regional Cooperation
Political Geography:
United States, China, Taiwan, Asia, and South Korea

329. Comparing Regional Development in China and India

Author:
Yanrui Wu
Publication Date:
02-2008
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Economic growth in China and India has attracted many headlines recently. As a result, the literature comparing the two Asian giants has expanded substantially. This paper adds to the literature by comparing regional growth, disparity and convergence in the two economies. This is the first of its kind. The paper presents a detailed examination of economic growth in the regions of China and India over the past twenty years. It also provides an assessment of regional disparity in the two countries and investigates whether there is any evidence of regional convergence during the period of rapid economic growth. It attempts to identify the sources of regional disparity and hence draw policy implications for economic development in the two countries in the near future.
Topic:
Development
Political Geography:
China, India, and Asia

330. Development Path of China and India and the Challenges for their Sustainable Growth

Author:
Yuefen Li and Bin Zhang
Publication Date:
04-2008
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The segmentation of global manufacturing and services provided China and subsequently India with a golden opportunity to make full use of their absolute advantage—low cost yet educated labour—to integrate into the world economy within a comparatively shorter period of time than some earlier industrialisers. Though international trade functioned as a vent of surplus in view of the narrowness of their domestic markets at the beginning of their economic catch-up, the label of export-led model may not reflect the real picture as imports underwent dramatic increases during their respective growth periods, in particular for China. Foreign direct investment has played a pivotal role in their economic growth and has major presence in international trade and investment in leading sectors of both countries, giving rise to certain special features and weak links for their economic expansion and sustainability of fast economic growth. To maintain more broad-based, fast and balanced growth, it seems that both countries have to redress sectoral imbalances, encourage technology upgrading and cope with future changes in demographic profiles which constituted a trigger to fast economic growth at the time of their respective economic reform.
Topic:
Development and International Trade and Finance
Political Geography:
China, India, and Asia