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Narrowing the Development Divide in ASEAN: The Role of Policy

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  • Jayant Menon

    (Asian Development Bank)

Abstract

The Association of Southeast Asian Nations (ASEAN) is highly diverse. It is also divided. The most striking example is the development divide that separates ASEAN’s newer members of Cambodia, the Lao People’s Democratic Republic, Myanmar, and Viet Nam—the CLMV countries—from the organization’s original members, or ASEAN-6. More rapid growth in Cambodia, Lao People’s Democratic Republic, and Viet Nam since the 1990s—driven by trade, investment, and other market reforms—has reduced income differences between this grouping and ASEAN-6. Yet, while the development divide has narrowed, huge gaps remain. The further narrowing of these gaps will require an increase in the pace and breadth of policy reforms, and start addressing labor mobility. Although rapid growth has resulted in convergence among ASEAN members, it has also increased polarization within individual countries. This can threaten social cohesion and the sustainability of future growth. There is a pressing need to invest more in education and health, and to institute land reform.

Suggested Citation

  • Jayant Menon, 2012. "Narrowing the Development Divide in ASEAN: The Role of Policy," Working Papers on Regional Economic Integration 100, Asian Development Bank.
    • Handle: RePEc:ris:adbrei:0100
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    Cited by:

    1. Jayant Menon & Peter Warr, 2013. "Lao Economy: Capitalizing on Natural Resource Exports," Asian Economic Policy Review, Japan Center for Economic Research, vol. 8(1), pages 70-89, June.
    2. Djokoto, Justice Gameli & Gidiglo, Ferguson K. & Srofenyo , Francis Y. & Agyeiwaa-Afrane, Akua, 2022. "Human Development Effects of Food Manufacturing Foreign Direct Investment," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 10(01), January.
    3. Cassey LEE & Yoshifumi FUKUNAGA, 2013. "Competition Policy Challenges of Single Market and Production Base," Working Papers DP-2013-17, Economic Research Institute for ASEAN and East Asia (ERIA).
    4. Devasmita JENA, 2018. "Economic integration and income convergence in the EU and the ASEAN," Journal of Economics Library, KSP Journals, vol. 5(1), pages 1-11, March.
    5. Larry Strange, . "ASEAN Small Less Developed Economies: Need for a New Approach," Chapters, in: Zhang Yunling & Fukunari Kimura & Sothea Oum (ed.), Moving Toward A New Development Model For East Asia-The Role of Domestic Policy and Regional Cooperation, chapter 9, pages 279-312, Economic Research Institute for ASEAN and East Asia (ERIA).
    6. Andrés Niembro & Jésica Sarmiento, 2021. "Regional development gaps in Argentina: A multidimensional approach to identify the location of policy priorities," Regional Science Policy & Practice, Wiley Blackwell, vol. 13(4), pages 1297-1327, August.
    7. Jean-Pierre A. Verbiest, 2013. "Regional Cooperation and Integration in the Mekong Region," Asian Economic Policy Review, Japan Center for Economic Research, vol. 8(1), pages 148-164, June.

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    More about this item

    Keywords

    ASEAN; development divide; convergence; inequality; transition economies; labor mobility;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

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