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Moderator:  Calla Wiemer (calla.wiemer@acaes.us)

The Cruel Arithmetic of Income Convergence in East Asia

The promise of development economics is that living standards can be raised significantly and sustainably. More than any other region, East Asia offered the hope that with the right policies, a country could reduce the incidence of severe poverty and, in some cases, provide for affluent lifestyles. Following Japan, buoyed by exports to the West, economies such as South Korea and Singapore grew their manufacturing sectors, transferring workers from low-productivity agricultural employment and raising overall living standards to that of the wealthier Western countries. Today, China continues this process, with the incidence of severe poverty falling from more than 66% of the population in 1990 to less than 1% in 2020 as it became the world's manufacturing center.

The question for this note is whether the countries on the left-hand side of Table 1 are following the path of the Asian high-flying economies on the right-hand side. Can the poorer countries of Southeast Asia move up to the standard of living found in the group of more affluent countries? Can incomes converge at a high level across Southeast Asia? Some countries, including Malaysia and Thailand, have made this a national planning goal.

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