Asian Development Outlook 2018

How Technology Affects Jobs

,

• Publisher: Asian Development Bank
• Year: 2018
• Print ISBN:
  9789292611200
• eBook ISBN:
  9789292611217
• Topic: Business
• Subtopic: Forecasting
• Index: Business

The annual Asian Development Outlook analyzes economic performance in the past year and offers forecasts for the next 2 years for the 45 economies in Asia and the Pacific that make up developing Asia. Growth prospects in the region are upbeat, buoyed by favorable demand at home and abroad. A strong performance in 2017 reflected a surge in exports, which will likely abate this year and next, and rapidly expanding domestic demand. While the outlook is for steady growth, risks to it are decidedly on the downside: Trade friction could weaken recently deepened trade links, tightening US monetary policy could diminish investment in developing Asia, and rising domestic private debt may hamper growth. New technologies drive higher productivity, the foundation for economic growth, better-paid jobs, and poverty reduction. The latest technologies in robotics and artificial intelligence may threaten some jobs, however, and leave less-skilled workers behind. To maximize gains in productivity while safeguarding social welfare, governments in developing Asia should protect workers but not preserve particular jobs. Meanwhile, they should facilitate the countervailing forces in new technologies that generate new jobs. Dealing with the downsides of new technology requires synchronized effort on skills development, labor regulation, social protection, and income redistribution.

ASIAN DEVELOPMENT

OUTLOOK 2018

HOW TECHNOLOGY AFFECTS JOBS

APRIL 2018

Creative Commons Attribution 3.0 IGO license (CC BY 3.0 IGO)

© 2018 Asian Development Bank

6 ADB Avenue, Mandaluyong City, 1550 Metro Manila, Philippines

Tel [phone]; Fax [phone]

www.adb.org

Some rights reserved. Published in 2018.

ISBN 978-92-9261-120-0 (print), 978-92-9261-121-7 (electronic)

ISSN 0117-0481 (print), 1996-725X (electronic)

Publication Stock No. FLS189310-3

http://dx.doi.org/10.22617/FLS189310-3

The views expressed in this publication are those of the authors and do not necessarily reflect the views and policies of the Asian Development Bank (ADB) or its Board of Governors or the governments they represent.

ADB does not guarantee the accuracy of the data included in this publication and accepts no responsibility for any consequence of their use. The mention of specific companies or products of manufacturers does not imply that they are endorsed or recommended by ADB in preference to others of a similar nature that are not mentioned.

By making any designation of or reference to a particular territory or geographic area, or by using the term “country” in this document, ADB does not intend to make any judgments as to the legal or other status of any territory or area.

This work is available under the Creative Commons Attribution 3.0 IGO license (CC BY 3.0 IGO) https://creativecommons.org/licenses/by/3.0/igo/. By using the content of this publication, you agree to be bound by the terms of this license. For attribution, translations, adaptations, and permissions, please read the provisions and terms of use at https://www.adb.org/terms-use#openaccess.

This CC license does not apply to non-ADB copyright materials in this publication. If the material is attributed to another source, please contact the copyright owner or publisher of that source for permission to reproduce it. ADB cannot be held liable for any claims that arise as a result of your use of the material.

Please contact [email protected] if you have questions or comments with respect to content, or if you wish to obtain copyright permission for your intended use that does not fall within these terms, or for permission to use the ADB logo.

Notes:

In this publication, “$” refers to US dollars.

ADB recognizes “China” as the People’s Republic of China and “Vietnam” as Viet Nam.

Corrigenda to ADB publications may be found at http://www.adb.org/publications/corrigenda.

Cover artwork by Ana Verayo/2018.

Contents

Foreword	v
Acknowledgments	vi
Definitions	vii
Abbreviations	viii
ADO 2018—Highlights	ix
Part 1 Turning strength into opportunity	1
Strong tailwinds but tricky crosscurrents	4
Private debt and economic growth	26
Annex: Sustaining growth momentum	35
Part 2 How technology affects jobs	47
Rising concern over technology displacing jobs	51
Reasons for optimism on job prospects	66
Some worker concerns remain	89
The role of government in harnessing technology for workers	100
Part 3 Economic trends and prospects in developing Asia	123
Central Asia	125
Armenia	127
Azerbaijan	132
Georgia	136
Kazakhstan	141
Kyrgyz Republic	147
Tajikistan	151
Turkmenistan	156
Uzbekistan	161
East Asia	167
Hong Kong, China	169
Mongolia	174
People’s Republic of China	179
Republic of Korea	188
Taipei, China	194
South Asia	199
Afghanistan	201
Bangladesh	205
Bhutan	212
India	217
Maldives	226
Nepal	230
Pakistan	235
Sri Lanka	240
Southeast Asia	247
Brunei Darussalam	249
Cambodia	252
Indonesia	255
Lao People’s Democratic Republic	260
Malaysia	263
Myanmar	268
Philippines	271
Singapore	277
Thailand	281
Viet Nam	286
The Pacific	291
Fiji	293
Papua New Guinea	296
Solomon Islands	302
Timor-Leste	305
Vanuatu	310
North Pacific economies	313
South Pacific economies	318
Small island economies	323
Statistical appendix	327

Foreword

The economic growth outlook for developing Asia remains vibrant. Asian Development Outlook 2018 foresees continued momentum after growth accelerated to 6.1% in 2017. The region is expected to expand by 6.0% in 2018 and 5.9% in 2019. Excluding Asia’s high-income newly industrialized economies, the prospects for growth are even higher, at 6.5% in 2018 and 6.4% in 2019. Traction for economic expansion will come from strong external demand, which is supported by a further pickup in growth this year in the major industrial economies, and robust domestic demand. Growth in the People’s Republic of China is seen to continue its gradual moderation, to 6.6% this year and 6.4% next, as the authorities take actions to address financial risks, while India recovers from a temporary growth setback in 2017, rebounding to 7.3% in 2018 and 7.6% in 2019.

Certain risks to this outlook require monitoring. The upswing in trade could be threatened by rising trade tensions. Although the measures implemented by the United States as of the end of March this year are unlikely to have a significant impact, the move away from trade openness is worrying. Further measures and countermeasures could dent business and consumer confidence. Meanwhile, capital flows to the region could diminish if the US Federal Reserve raises interest rates faster than expected to keep fiscal stimulus there from igniting inflation. Within the region, the buildup of private debt in some economies in the past few years needs close monitoring. Fortunately, most Asian economies are well positioned to meet these challenges.

This year’s publication draws attention to opportunities and concerns presented by new technologies in the workplace. The application of new technologies will boost productivity, but at the same time it will displace certain types of jobs. Evidence shows, however, that rising demand and higher output will create jobs, outweighing job displacement, especially with the addition of new occupations and industries that will arise to meet the new needs of producers and consumers. This transition will require a skilled workforce and could put the less-skilled at a disadvantage. The challenge for governments is to ensure that workers are equipped with foundational skills to enable lifelong learning and have the specialized skills required for working with new technologies. Governments must act to enhance and adapt skills development, labor regulation, social protection, and income redistribution. Finally, they must ensure that new technologies develop in ways that benefit people and protect their rights.

TAKEHIKO NAKAO

President
Asian Development Bank

Acknowledgments

Asian Development Outlook 2018 was prepared by staff of the Asian Development Bank (ADB) in the Central and West Asia Department, East Asia Department, Pacific Department, South Asia Department, Southeast Asia Department, and Economic Research and Regional Cooperation Department, as well as in ADB resident missions. Representatives of these departments constituted the Regional Economic Outlook Task Force, which met regularly to coordinate and develop consistent forecasts for the region.

The authors who contributed the sections are bylined in each chapter. The subregional coordinators were Kenji Takamiya and Fatima Catacutan for Central Asia, Akiko Terada-Hagiwara for East Asia, Masato Nakane for South Asia, Kwang Jo Jeong and Dulce Zara for Southeast Asia, and Rommel Rabanal and Cara Tinio for the Pacific.

A team of economists in the Economic Research and Regional Cooperation Department, led by Joseph E. Zveglich, Jr., director of the Macroeconomics Research Division, coordinated the production of the publication, assisted by Edith Laviña. Technical and research support was provided by Shiela Camingue-Romance, Cindy Castillejos-Petalcorin, Marthe Hinojales, Nedelyn Magtibay-Ramos, Pilipinas Quising, Aleli Rosario, Dennis Sorino, Lea Sumulong, Priscille Villanueva, and Mai Lin Villaruel. Additional research support was provided by Emmanuel Alano, Raymond Gaspar, and Michael Timbang. The economic editorial advisors Robert Boumphrey, Joshua Greene, Srinivasa Madhur, Richard Niebuhr, and Reza VaezZadeh made substantive contributions to the country chapters and regional outlook.

A team of economists preparing the theme chapter was led by Rana Hasan, director of the Development Economics and Indicators Division in the Economic Research and Regional Cooperation Department. In addition to the contributors named in the byline and the authors of the background papers, the theme chapter benefited from inputs by Roehlano Briones, Dene Chen, Peter Drury, Yang Du, Peng ...

Table of contents

• Front Cover