Growth and Productivity in ASEAN
Economies
Michael Sarel
An understanding of the sources of growth in the ASEAN economies--a
much discussed subject in recent years--is central to an assessment of their past performance
and future growth prospects. Some previous studies have concluded that growth rates of total
factor productivity (TFP) in Asian economies are not nearly as spectacular as their growth
rates of output, and, at least in Singapore's case, are virtually zero. If true, this would imply
that the success of the ASEAN economies may not be sustainable.
This paper argues that the results of previous studies were greatly influenced by their
reliance on national accounts data for measures of various variables. In particular, the results
were driven by the values that were used for the factor income shares of capital and labor.
This study uses internationally comparable data from the Summers-Heston database and
explores an alternative method for estimating the capital and labor factor shares, based on the
assumption that technological factor shares are determined by the industrial structure of the
economy and, possibly, by its level of development.
The results of this study for the period 1978-96 show impressive growth rates of TFP in
Singapore (2.5 percent), Thailand (2.0 percent), and Malaysia (2.0 percent); a slower rate for
Indonesia (1.2 percent); and a negative rate for the Philippines (-0.8 percent). The proportion
of output growth per person attributable to TFP growth is not systematically different in the
ASEAN economies and the United States.
Michael Sarel is an economist in the Southeast Asia and Pacific Department of the IMF.
He received a Ph.D. from Harvard University.
[IMF Home]
[Seminar Contents]