Services No Savior for Asia: ADB

Article source
The Diplomat

Asia’s emerging economies risk being caught in the “middle income trap” if they pursue services at the expense of manufacturing, the Asian Development Bank (ADB) has warned. The latest report from the regional lender came amid increasing capital flight from the region and warnings of another Asian financial crisis, should its leaders fail to learn the lessons of past mistakes.

In its flagship annual report, “Key Indicators for Asia and the Pacific 2013,” the bank said services had the largest share of developing Asia’s output, yet agriculture still employed around 43 percent of Asia’s workers. Only industrialization could ensure countries such as Malaysia, the Philippines and Thailand joined their higher-income peers including Japan and South Korea, it said.

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