Asian Development Outlook 2013 Update: Governance and Public Service Delivery

Description
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The annual Asian Development Outlook, generally launched in April, presents an analysis of developing Asia’s recent economic performance plus its prospects for the next 2 years. This Update shows whether these forecasts were met, explaining divergence between forecasts and the actual outturn, and firms the forecasts for the next 18 months or so.
Findings

Developing Asia is challenged to sustain its growth momentum. The region's pace is expected to marginally slide from 6.1% in 2012 to 6.0% in 2013, before picking up to 6.2% in 2014. This is mainly on account of the growth moderation in the region's two largest economies.


The prospective tapering of United States' quantitative easing has destabilized financial markets in emerging economies, including developing Asia. However, fears of a crisis recalling the 1997 Asian financial crisis are unwarranted. The region is in a much stronger position to weather the storm with many economies running current account surpluses and holding large foreign reserve stockpiles. The reforms instituted since 1997 strengthened macroeconomic management, financial regulation, and corporate governance.
Video: New Growth Outlook for Developing Asia

Nevertheless, developing Asia is still faced with the twin challenge of maintaining financial stability and sustaining growth. The recent financial turmoil has all the more emphasized the need for structural reforms to support growth.

The region has seen little closing of the governance gap with advanced economies despite its phenomenal economic growth. Good governance is needed to sustain development momentum and ensure the benefits of growth are widely shared. Improving public service delivery is an effective entry point toward wider governance reform.