Asia has shown the world what success in economic development looks like. From the amazing transformations of Japan, the Republic of Korea, and the other 'tigers' in the early 70s, to the more recent takeoffs of the People's Republic of China (PRC), India, and the leading economies in Southeast Asia, the region has prospered at a startling pace. Technologies were adopted, productivity raised, and export markets conquered. Billions were lifted out of poverty. What was once a backwater is now a global engine of growth. That roaring progress was, however, fueled by a lesser-known factor: borrowing. Governments, corporations, and households financed their path to prosperity with debt-lots of debt. Today, the volume of debt hanging over Asian economies is huge, in both absolute and relative terms. It was growing fast before the pandemic and is projected to grow even faster because of it. Demography is bound to make matters worse in the long term. How sustainable is this? What should policy makers do to keep Asia's finances stable? Should markets worry? These are the core questions of this book. Through a collection of chapters by renowned experts, a diagnosis of Asia's debt accumulation is offered. The approach is both country- and issue-driven, so both idiosyncratic and common elements can be identified. Matters like Japan's social insurance promises, the PRC's state-owned enterprises, the Pacific islands' aid dependency, and the saving habits of households in the Republic of Korea are dissected. As are trends that are present across countries, such as population aging, shrinking fiscal space, and contingent liabilities. This allows for a deeper understanding of what makes borrowing sustainable-or not. And it leads directly into policy recommendations, especially those involving the use of new financial instruments. The final product is a book whose comprehensiveness and practicality are unprecedented in the field. It will be equally invaluable for governments, investors, and scholars in Asia and beyond.

The 2008 09 Global Finanical Crisis shook the ground under the conventional wisdom that had guided mainstream development economics. Much of what had been held as true for decades is now open to reexamination from what the role of governments should be in markets to which countries will be the engines of the world s economy, from what people need to leave poverty to what businesses need to stay competitive. Development economists look into the future. They do not just ask how things work today, but how a new policy, program, or project would make them work tomorrow. They view the world and history as a learning process past and present are inputs into thinking about what is coming. It is that appetite for a vision of the future that led the authors of 'The Day after Tomorrow: A Handbook on the Future of Economic Policy in the Developing World' to invite some 40 development economists, most of them from the World Bank s Poverty Reduction and Economic Management Network an epicenter of the profession to report what they see on the horizon of their technical disciplines and of their geographic areas of specialization. The disconcerting but exciting search for a new intellectual compact has begun. To help guide the discussion, 'The Day after Tomorrow: A Handbook on the Future of Economic Policy in the Developing World' puts forth four key messages: While the developed world gets its house in order, and macroeconomics and finance achieve a new consensus, developing countries will become a (perhaps the) growth engine for the world. Faster technological learning and more South-South integration will fuel that engine. Governments in developing countries will be better they may even begin to earn the trust of their people. A new, smarter generation of social policy will bring the end of poverty within reach, but the attainment of equality is another matter. Many regions of the developing world will break out of their developing status and will graduate into something akin to newly developed. Africa will eventually join that group. Others, like Eastern Europe, have a legacy of problems to address before such a transition. While some regions will do better than others, and some technical areas will be clearer than others, there is no question that the horizon of economic policy for developing countries is promising risky, yes, but promising. The rebalancing of global growth toward, at the very least, a multiplicity of engines, will give the developing world a new relevance."