Key Indicators 2008: Comparing Poverty Across Countries: The Role of Purchasing Power Parities

Key Indicators for Asia and the Pacific 2008

Front Matter

PART I
Special Chapter

PART II
Millennium Development Goals

PART III
Regional Tables

PART IV
Definitions

Country Tables

Directory of PDFs

PART III
Regional Tables

Download the full Part III in PDF format
[ PDF: 2,627 kb | 134 pages ]

Introduction

The regional tables in Part III are grouped into seven areas or themes, each with short nontechnical writeups highlighting important developments since the 1990s. Each theme is further split into related subtopics. Compared to past issues of Key Indicators, there are now 103 regional tables beginning this edition, to reflect the important activities and indicators of development in the Asia and Pacific region. A new area, infrastructure, has been added as a new theme. Existing areas were expanded, such as government, which now covers governance. The area on money has also been broadened to encompass finance.

The seven themes and their subtopics, indicated below, are meant to ease the search for and understanding of various indicators of economic performance:

People

  Population Poverty Indicators

  Labor Force and Employment Social Indicators

Economy and Output

  National Accounts Production

Money, Finance, and Prices

  Prices Exchange Rates

  Money and Finance

International Flows

  Balance of Payments Capital Flows

  External Trade External Indebtedness

  International Reserves

Infrastructure

  Transport Communications

Government and Governance

  Government Finance Governance

Energy and Environment

  Energy Environment

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Introduction to Regional Tables
[ PDF: 541 kb | 4 pages ]

People brings together standard demographic indicators—e.g., size and growth of the population; birth, death, and fertility rates—including information on international migration, employment and unemployment, life expectancy, and health and education resources. Poverty alleviation is embodied in the Asian Development Bank’s Strategy 2020—a vision of an Asia and Pacific region free of poverty. In this regard, statistics on the extent of poverty in the region are included in this theme.

The People theme also ranks economies of the Asia and Pacific region according to the United Nations Human Development Index (HDI). The HDI combines a range of economic and social statistics into an index number reflecting the overall level of well-being in each economy. Among the 177 economies for which the HDI can be calculated, seven economies from the region are in the top quarter, while 25 are in the lower half of the global ranking.

Read the commentary for People [ PDF: 386 kb | 24 pages ]

Population

Table 1.1 Mid-year population [ XLS: 41 kb ]

Table 1.2 Growth rates in population [ XLS: 42 kb ]

Table 1.3 Migration and urbanization [ XLS: 37 kb ]

Table 1.4 Population aged 0–14 years [ XLS: 34 kb ]

Table 1.5 Population aged 15–64 years [ XLS: 34 kb ]

Table 1.6 Population aged 65 years and over [ XLS: 34 kb ]

Table 1.7 Age dependency ratio [ XLS: 34 kb ]

Labor Force and Employment

Table 1.8 Labor force participation rate [ XLS: 32 kb ]

Table 1.9 Unemployment rate [ XLS: 33 kb ]

Table 1.10 Unemployment rate of 15–24-year-olds [ XLS: 33 kb ]

Table 1.11 Employment in agriculture [ XLS: 32 kb ]

Table 1.12 Employment in industry [ XLS: 32 kb ]

Table 1.13 Employment in services [ XLS: 37kb ]

Poverty Indicators

Table 1.14 Poverty and inequality [ XLS: 32 kb ]

Table 1.15 Human development index [ XLS: 36 kb ]

Social Indicators

Table 1.16 Life expectancy at birth [ XLS: 39 kb ]

Table 1.17 Births, deaths, and reproduction [ XLS: 33 kb ]

Table 1.18 Adult literacy rate [ XLS: 31 kb ]

Table 1.19 Education resources [ XLS: 29 kb ]

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Table 1.20 Health care resources [ XLS: 34 kb ]

Economy and Output focuses on the levels and growth of gross domestic product (GDP), related statistics taken from the national accounts, and related indicators on production. How have the GDP shares of agriculture, industry, and services changed since 1990? Which economies are investing more in capital for future growth?

This theme compares the relative size of economies both within the region and in the world as a whole using purchasing power parities (PPPs). ADB in collaboration with the World Bank has produced a set of 2005 PPPs for the region (see Box 1 for a description of PPPs). This is the first issue of Key Indicators to use the new 2005 benchmark PPPs. When countries’ national accounts are converted to a common currency using PPPs, differences in purchasing power between countries are eliminated so that comparisons reflect only differences in the volumes of goods and services produced and consumed in each country. The PPP-converted GDP figures included under this theme show, for example, how the People’s Republic of China (PRC) and India compare, in terms of real GDP, with an industrial giant like Japan. It also shows, on a per capita basis, which are the richest and poorest economies in the region, and how they compare with the United States.

Box 1 Calculation of Purchasing Power Parities

Purchasing power parities (PPPs) are calculated by comparing the prices of identical goods and services in different countries. These price comparisons are made by calculating price relatives, which are the price of a specified good or service in one country divided by the price of the same item in another country. For example, if a 300 ml can of Pepsi costs 16.42 Rupees in country A and 3.24 Dollars in Country B, a price relative can be calculated as 3.24/16.42, or about 0.20. Price relatives are calculated for several hundred items covering all the final expenditure components of gross domestic product (GDP) and PPPs are then obtained as the weighted average of these price relatives. The weights used are the shares of expenditure on each item in total GDP.

PPPs are currency converters that equalize the purchasing power of currencies in the different countries. They are used in two ways: first, to convert GDP and its expenditure components—household consumption, gross fixed capital formation, etc.—to a common currency so that GDP comparisons can be made in real terms, which means that differences in price levels between countries have been eliminated. Note that a parallel procedure is used when comparing real GDP from year to year in a single country; here differences in price changes over time are eliminated by using constant prices. The second use of PPPs is to measure differences in price levels between countries, which is done by calculating ratios of PPPs to exchange rates.

The Asian Development Bank coordinated the computation of PPPs for 21 regional members and two nonmember economies in the Asia and Pacific region as part of the 2005 International Comparison Program (ICP). Coordination involved a number of steps: drawing up a master list of goods and services from which each economy could select items commonly found in their markets; assisting economies to break down their GDP into the 155 “basic headings” needed to obtain the expenditure weights; verifying the price data and expenditure weights submitted by the 23 economies; and calculating PPPs for the participating economies.

The ICP Global Office at the World Bank then combined the results for the Asia and Pacific region with those for the other regions to provide a set of global comparisons for 146 economies. The ICP Global Office also made econometric estimates of PPPs for a number of missing economies, including 14 in the Asia and Pacific region. The Asian Development Bank has computed real GDP estimates for the Asia and Pacific region back to 2000 and for 2006, and will carry them forward using GDP price deflators until the next benchmark.

Read the commentary for Economy and Output [ PDF: 433 kb | 27 pages ]

National Accounts

Table 2.1 Gross domestic product at PPP [ XLS: 43 kb ]

Table 2.2 GDP per capita at PPP [ XLS: 43 kb ]

Table 2.3 GNI per capita, Atlas method [ XLS: 33 kb ]

Table 2.4 Agriculture value added [ XLS: 42 kb ]

Table 2.5 Industry value added [ XLS: 39 kb ]

Table 2.6 Services value added [ XLS: 39 kb ]

Table 2.7 Private consumption expenditure [ XLS: 38 kb ]

Table 2.8 Government consumption expenditure [ XLS: 38 kb ]

Table 2.9 Gross domestic capital formation [ XLS: 38 kb ]

Table 2.10 Exports of goods and services [ XLS: 38 kb ]

Table 2.11 Imports of goods and services [ XLS: 39 kb ]

Table 2.12 Gross domestic saving [ XLS: 38 kb ]

Table 2.13 Resource gap [ XLS: 39 kb ]

Table 2.14 Growth rates of real GDP [ XLS: 38 kb ]

Table 2.15 Growth rates of agriculture real value added [ XLS: 38 kb ]

Table 2.16 Growth rates of industry real value added [ XLS: 39 kb ]

Table 2.17 Growth rates of services real value added [ XLS: 38 kb ]

Table 2.18 Growth rates of real private consumption expenditure [ XLS: 38 kb ]

Table 2.19 Growth rates of real government consumption expenditure [ XLS: 38 kb ]

Table 2.20 Growth rates of real gross domestic capital formation [ XLS: 37 kb ]

Table 2.21 Growth rates of real exports of goods and services [ XLS: 46 kb ]

Table 2.22 Growth rates of real imports of goods and services [ XLS: 46 kb ]

Production

Table 2.23 Growth rates of agriculture production index [ XLS: 37 kb ]

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Table 2.24 Growth rates of manufacturing production index [ XLS: 38 kb ]

Money, Finance, and Prices shows the development of inflation and financial markets since 1990. In several economies, average annual inflation for the 2003–2007 period was lower compared to the second half of the 1990s. In 2007, however, there was a resurgence of inflation in the region, and this is continuing in 2008. In most economies in the region, the food component of the consumer price index is rising faster than the all-items index. The 1997 financial crisis caused exchange rates to depreciate in several economies in the Asia and Pacific region. Most of these currencies have recovered and have been strengthening against the dollar from around 2005.

Money supply (M2 as a percentage of GDP) has been growing in most economies. In the last two decades, new stock exchanges have been established in several Asian countries and existing stock exchanges have seen substantial growth. Share prices rose in various economies around the region during the 1995–2007 period, but have retreated during the first part of 2008 from the levels recorded in 2007.

As explained in Box 1 above, PPPs are currency converters that have been calculated in such a way as to eliminate differences between economies in their price levels. Exchange rates are also currency converters but they have not been corrected for price level differences. Ratios of PPPs to exchange rates (or price level indexes) therefore measure the differences in price levels between economies. Indexes of price levels, which are included in this theme, identify economies in the Asia and Pacific region where prices are higher or lower than that of the United States.

Read the commentary for Money, Finance, and Prices [ PDF: 395 kb | 21 pages ]

Prices

Table 3.1 Growth rates of consumer price index [ XLS: 41 kb ]

Table 3.2 Growth rates of food consumer price index [ XLS: 41 kb ]

Table 3.3 Growth rates of wholesale/producer price index [ XLS: 37 kb ]

Table 3.4 Growth rates of GDP deflator [ XLS: 38 kb ]

Money and Finance

Table 3.5 Growth rates of money supply (M2) [ XLS: 37 kb ]

Table 3.6 Money supply (M2) [ XLS: 40 kb ]

Table 3.7 Interest rate on savings deposits [ XLS: 33 kb ]

Table 3.8 Interest rate on time deposits of 12 months [ XLS: 34 kb ]

Table 3.9 Lending interest rate [ XLS: 32 kb ]

Table 3.10 Yield on short-term treasury bills [ XLS: 44kb ]

Table 3.11 Domestic credit provided by banking sector [ XLS: 36 kb ]

Table 3.12 Bank nonperforming loans [ XLS: 30 kb ]

Table 3.13 Growth rates of stock market price index [ XLS: 39 kb ]

Table 3.14 Stock market capitalization [ XLS: 36 kb ]

Exchange Rates

Table 3.15 Official exchange rate [ XLS: 39 kb ]

Table 3.16 Purchasing power parity conversion factor [ XLS: 31 kb ]

Table 3.17 Price level indexes [ XLS: 43 kb ]

International Flows gives statistics on key aspects of globalization in the Asia and Pacific region. Chief among these is the expansion of trade with countries in other regions and, especially, within the region itself. Globalization, however, is not confined to trade in goods and services. It also involves international movements of labor and capital.

Remittances by migrant workers and compensation of employees temporarily working abroad are an important source of income for many Asian economies and amount to more than 10% of GDP in a number of economies.

Capital moves between countries in several ways: as official development aid from richer countries, as foreign direct investment (FDI), and as short-term capital movements. Official development aid to the region is important for the Pacific economies and some of the poorer economies in other parts of Asia. Elsewhere, however, FDI is a major source of investment funds. In addition to generating employment, FDI is particularly important because it is often accompanied by transfers of technology and managerial know-how. Total net FDI (as a percentage of GDP) has risen significantly in a number of economies in the region.

This theme also includes tables on the size of external debt and its importance relative to GNI and to exports of goods and services.

Read the commentary for International Flows [ PDF: 556 kb | 28 pages ]

Balance of Payments

Table 4.1 Trade in goods balance [ XLS: 35 kb ]

Table 4.2 Trade in services balance [ XLS: 36 kb ]

Table 4.3 Current account balance [ XLS: 36 kb ]

Table 4.4 Workers' remittances and compensation of employees, receipts (US$ million) [ XLS: 39 kb ]

Table 4.5 Workers' remittances and compensation of employees, receipts (percent of GDP) [ XLS: 33 kb ]

Table 4.6 Foreign direct investment, total net (US$ million) [ XLS: 32 kb ]

Table 4.7 Foreign direct investment, total net (percent of GDP) [ XLS: 35 kb ]

External Trade

Table 4.8 Merchandise exports [ XLS: 33 kb ]

Table 4.9 Growth rates of merchandise exports [ XLS: 35 kb ]

Table 4.10 Merchandise imports [ XLS: 37 kb ]

Table 4.11 Growth rates of merchandise imports [ XLS: 35kb ]

Table 4.12 Trade in goods [ XLS: 36 kb ]

Table 4.13 Direction of trade: merchandise exports [ XLS: 42 kb ]

Table 4.14 Direction of trade: merchandise imports [ XLS: 42 kb ]

International Reserves

Table 4.15 International reserves [ XLS: 36 kb ]

Table 4.16 Ratio of international reserves to imports [ XLS: 35 kb ]

Capital Flows

Table 4.17 Official flows from all sources to developing member countries [ XLS: 35 kb ]

Table 4.18 Net private flows a from all sources to developing member countries [ XLS: 35 kb ]

Table 4.19 Aggregate net resource flows from all sources to developing member countries [ XLS: 35 kb ]

External Indebtedness

Table 4.20 Total external debt of developing member countries (US$ million) [ XLS: 32 kb ]

Table 4.21 Total external debt of developing member countries (percent of GNI) [ XLS: 32kb ]

Table 4.22 Total external debt of developing member countries (percent of exports of goods and services) [ XLS: 32 kb ]

Table 4.23 Total debt service paid by developing member countries (US$ million) [ XLS: 31 kb ]

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Table 4.24 Total debt service paid by developing member countries (percent of exports of goods and services) [ XLS: 31 kb ]

Infrastructure covers both road and rail transportation, and communications. The PRC and India dominate both the rail and road networks in the region. Ownership of personal computers has increased sharply since 1990, but a clear divide still exists between some economies and the rest of the region. A similar “digital divide” can be observed in the case of broadband internet access, with very low numbers of broadband subscribers (per 100 population) in most economies of the region. There is some overlap between this theme and Millennium Development Goal 8: Develop a global partnership for development, as one of the targets under Goal 8 is to make available to people the benefits of new technologies, especially communications and information.

Read the commentary for Infrastructure [ PDF: 215 kb | 7 pages ]

Transport

Table 5.1 Road indicators [ XLS: 42 kb ]

Table 5.2: Rail indicators [ XLS: 34 kb ]

Communications

Table 5.3 Computer and broadband indicators [ XLS: 38 kb ]

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Table 5.4 Expenditures on information and communications technology [ XLS: 28 kb ]

Government and Governance has several indicators. The government indicators cover the traditional role of government as tax collector and provider of defense, law and order, and social services. “Tax burdens” (taxes as a percentage of GDP) are low in several relatively fast-growing economies, and there are striking differences among economies in government expenditure on health, education, and housing and community amenities (as a percentage of GDP).

Governments also play an important role in determining the “business environment.” Does government encourage new entrepreneurs, or does it make it difficult to start new business ventures? How many days does it take to register a new enterprise and what are the costs involved? Some countries make it quick and inexpensive to establish a new business, while others have time-consuming and expensive procedures. The latter are generally countries with lower per capita GDP. Governments can also encourage private business by ensuring that their officials do not abuse their position by demanding “special favors” before they issue licenses or process applications in a timely fashion. “Corruption” is difficult to measure objectively but through surveys, panels of knowledgeable business people can provide broad indications of which countries are more or less corrupt. Again, there are wide differences in perception of corruption between the economies of the Asia and Pacific region. Some are considered to be among the least corrupt, while others are among the worst when ranked against the 180 economies covered by the 2007 survey by Transparency International.

Read the commentary for Government and Governance [ PDF:275 kb | 12 pages ]

Government Finance

Table 6.1 Fiscal balance [ XLS: 45 kb ]

Table 6.2 Tax revenue [ XLS: 45 kb ]

Table 6.3 Total government revenue [ XLS: 35 kb ]

Table 6.4 Total government expenditure [ XLS: 39 kb ]

Table 6.5 Government expenditure on education [ XLS: 45 kb ]

Table 6.6 Government expenditure on health [ XLS: 45 kb ]

Table 6.7 Government expenditure on housing and community amenities [ XLS: 44 kb ]

Governance

Table 6.8 Doing business start-up indicators [ XLS: 66 kb ]

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Table 6.9 Corruption perceptions index [ XLS: 40 kb ]

Energy and Environment brings together indicators on the production of energy as well as indicators related to the environment such as land use, air and water pollution, and forest resources.

The PRC is the largest energy producer in the region followed by India, Australia, and Indonesia. The different forms of energy can be converted to standard units, which can then be divided into GDP (PPP) to compare “energy productivity” in each economy. Energy productivity differs widely across the region but there is some evidence that the less productive economies have improved in recent years.

Nitrous oxide emissions are rising in the major country emitters of this greenhouse gas. In many economies, deforestation is proceeding at a rate of between 1% and 3% per year, although the PRC and Viet Nam are reporting important gains in the regeneration of forests.

The Asia and Pacific region plays a key role in environmental issues because of its large population. Climate change would sharply accelerate if the region’s per capita output of greenhouse gases were to approach that of Europe and North America. Another reason for Asia’s importance in environmental issues is that the countries of South and South East Asia contain many of the world’s remaining rain forests. These are threatened by both commercial logging and land clearance. There is some overlap between this theme and Millennium Development Goal 7: Ensure environmental stability, which seeks to integrate the principles of sustainable development into country policies and programs and reverse the loss of environmental resources.

Read the commentary for Energy and Environment [ PDF: 266 kb | 9 pages ]

Energy

Table 7.1 GDP per unit of energy use [ XLS: 42 kb ]

Table 7.2 Energy production [ XLS: 39 kb ]

Table 7.3 Energy imports, net [ XLS: 45 kb ]

Environment

Table 7.4 Agriculture land use [ XLS: 37 kb ]

Table 7.5 Deforestation and pollution [ XLS: 54 kb ]

Selected References

Asian Development Bank. 2007. 2005 International Comparison Program for Asia and the Pacific: Purchasing Power Parities and Real Expenditures. Manila. Available: www.adb.org/statistics/icp/icp.asp.

———. 2008. Special Report—Food Prices and Inflation in Developing Asia: Is Poverty Reduction Coming to an End? Manila. Available: www.adb.org/Documents/reports/food-prices-inflation/food-prices-inflation.pdf.

Commission of the European Communities, International Monetary Fund, Organisation for Economic Co-operation and Development, United Nations, World Bank. 1993. System of National Accounts 1993. Brussels/Luxembourg, New York, Paris, Washington, DC.

International Monetary Fund. 1993. Balance of Payments Manual, Fifth Edition. Washington, DC. Available: www.imf.org/external/np/sta/bop/bopman.pdf.

Organisation for Economic Co-operation and Development. 2007. OECD Factbook 2007. Paris.

World Bank. 2008a. Global Purchasing Power Parities and Real Expenditures, 2005 International Comparison Program. Washington, DC. Available: siteresources.worldbank.org/ICPINT/Resources/icp-final.pdf.

———. 2008b. World Development Indicators 2008. Washington, DC.

Publications

PART III Regional Tables

PART III
Regional Tables