The Determinants of Structural Transformation in Asia: A Review of the Literature

Sen, Kunal

doi:10.2139/ssrn.2811507

Cited by 10 publications

(12 citation statements)

References 51 publications

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“…Another crucial policy change is a considerable increase in FDI in each country's agricultural sector. A concerted effort to improve land productivity through price incentives and fertilizer use is also visible in many SEA countries (Sen 2016). In other words, slow physical productivity growth represents a large population still stuck in agriculture because of the slow migration of labor from the agriculture to nonagriculture sector.…”

Section: Structural Transformation In Southeast Asian Economies mentioning

confidence: 99%

Structural transformation in Southeast Asian countries and key drivers

Institute¹

2019

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The International Food Policy Research Institute (IFPRI), established in 1975, provides researchbased policy solutions to sustainably reduce poverty and end hunger and malnutrition. IFPRI's strategic research aims to foster a climate-resilient and sustainable food supply; promote healthy diets and nutrition for all; build inclusive and efficient markets, trade systems, and food industries; transform agricultural and rural economies; and strengthen institutions and governance. Gender is integrated in all the Institute's work. Partnerships, communications, capacity strengthening, and data and knowledge management are essential components to translate IFPRI's research from action to impact. The Institute's regional and country programs play a critical role in responding to demand for food policy research and in delivering holistic support for country-led development. IFPRI collaborates with partners around the world. AUTHORS AbstractThis study's objective is to examine the factors that have driven structural transformation (ST) in the Southeast Asian (SEA) economies and the policies supporting the process. It sets the stage by evaluating the ST in each country, quantifying the contribution of "within sector" and "structural change" to overall productivity growth and estimating the turning points (TPs) to gauge the prospects of income convergence. Eight SEA countries, undergoing a steady rate of economic growth -Cambodia, Lao PDR, Myanmar, Viet Nam, Philippines, Malaysia, Indonesia, and Thailand (CLMVPMIT) are chosen for analysis. We find their progress on ST to be consistent with the theory and historical patterns experienced in several developed and developing countries.However, progress is diverse across these countries and lags behind developed countries, indicating that labor is not exiting agriculture as fast as agriculture's share of value added has been declining. The ST has decreased from 49 percent in Thailand to almost 3 percent each in Cambodia and Malaysia during 1991 to 2016. Further, the contribution of within change to productivity, which was pivotal during the 1990s in each country is rather subdued during the 2000s, thereby giving comparative primacy to structural change. A relatively higher-57 to 80 percent-contribution of structural change in Cambodia and Lao PDR, together with productivity growth, may be explained by increasing migration and trade in nonagriculture products. We also find that while Lao PDR, Thailand, and Indonesia have reached their TPs, other nations, especially the poorer ones such as Viet Nam, Myanmar, and Philippines are predicted to take at least a decade towards this goal.Empirical analysis suggests ST in CLMVPMIT is positively driven by agricultural productivity, terms of trade, and public investments in infrastructure, with little role for rural to urban migration and market integration. Large inter-sectoral productivity differentials across SEA countries, other than in Cambodia and Malaysia, necessitates to accelerate agricultural disproportionate share of the labor forc...

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Section: Structural Transformation In Southeast Asian Economies mentioning

confidence: 99%

Structural transformation in Southeast Asian countries and key drivers

Institute¹

2019

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“…Typically, with greater demand for labour in high-productivity sectors, the ease of migration of labour from low-productivity sectors increases and as a result, the pace of structural transformation becomes faster. In fact, the speed at which this structural transformation takes place differentiates successful countries from unsuccessful ones (Sen, 2016); for example, within Asia, in case of early industrialising Asian countries like Republic of Korea and Taipei, China, the structural transformation happened at a much rapid pace as compared to that of late industrialising Asian countries leading to a very sharp increase in economic growth that was sustained for a prolonged period. This means that for the latter, a large proportion of the workforce was still employed in agriculture, even when the overall economy was growing at a rapid pace (Sen, 2016).…”

Section: Introductionmentioning

confidence: 99%

Comparative Analysis of Structural Transformation Process of Selected Asian Developing Economies

Aggarwal

2021

Journal of Asian Economic Integration

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This article tries to analyse country-level variations in the selected Asian developing economies in terms of their growth path and their position in the process of structural transformation in the recent decades, by estimating the turning point (TP) for each country. It also examines the magnitude of the contribution of intersectoral shifts and within-sector productivity gains in the economy-wide labour productivity growth by conducting the shift-share analysis. The results of turning point (TP) estimation show that all these countries had achieved their turning points except the Philippines between 1980 and 2018. However, the productivity increase in agriculture is not evident as their GAP in the year when TP would have been achieved is not even near to zero. Further, the shift-share analysis highlights the contribution of within-sector productivity growth is relatively more than that of intersectoral shifts of labour. Thus, the main concern is to make sure that there is a steady intersectoral movement of labour from low productive to high productive sectors, which can be done primarily through expanding the productive sectors (industry and services) to generate employment opportunities. Also, equally important is increasing the productivity of the agricultural sector so that the process of structural transformation could happen smoothly. For this, the public and private investments in R&D of both agriculture and non-agriculture sectors are highly crucial.

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“…However, the sector remains under strong employment pressure -its share in workforce during this period declined slowly from 49 percent to 38 percent. Needless to say, the pace of structural transformation has differed markedly across the countries in the region (Sen, 2016).…”

Section: Introductionmentioning

confidence: 99%

“…This transformation of agriculture has been shaped by advancements in bio-chemical technologies, investments in irrigation and infrastructure, and innovations in information and communication technologies and financial systems (Sen, 2016). This led to a substantial increase in agricultural productivity, food supplies and rural wages (Dawe, 2015;Vos, 2018).…”

Section: Introductionmentioning

confidence: 99%