Asian cubs making their move as tigers age

ECONOMIC performances are diverging between two groups of economies in the region - Asia's ageing tigers and striving cubs. The tigers - which include economies such as China, South Korea, Taiwan, Hong Kong and Singapore - are mostly developed economies in North-east Asia, where growth has been stuck at low levels or is slowing significantly, saddled by high debt levels, low productivity growth and rapidly ageing populations.

By contrast, the cubs are less-developed economies which have plenty of room for catch-up to increase per capita incomes and where the opportunities to boost potential growth are large. They have young labour forces with a median age of 29.1 versus 40.1 in tiger economies and sound economic fundamentals with much lower debt levels, easing external vulnerabilities, and inflation in check. Asean is home to a few of these cubs, and Indonesia and the Philippines are the most promising. These two Asean cubs have been getting their act together to seize opportunities. Unemployment rates have started to fall more meaningfully in recent years, which means their favourable demographic profiles are gradually turning into a competitive advantage by generating jobs that productively absorb new entrants into the workforce.

They are making significant progress on structural reforms, even if politics sometimes dominate headlines, helping to improve the overall business climate and raise much needed investment. Indonesia is already climbing up the World Bank's "Ease of Doing Business" rankings, and has recently earned a rating upgrade by S&P to investment grade. In the Philippines, there are clear signs that, despite President Rodrigo Duterte's controversial rhetoric, his government is taking steps to reduce corruption and cut red tape.