Industrial parks have helped economic development: Former WB chief economist

Industrial parks have proved successful in kick-starting economic development, even in some of the world's most underdeveloped economies, former World Bank chief economist Justin Yifu Lin said at an economic forum on Tuesday.

"In countries like Ethiopia and Rwanda [...] nobody would have expected a local factory to be competitive exporter on the global markets," Lin told a press conference on the sidelines of the Boao Forum for Asia.

Lin said conventional economic wisdom agreed that a shortage of infrastructure and skilled labor were the major bottlenecks that hindered underdeveloped economies.

However, the renowned economist said, factories in the industrial parks in such countries had quickly turned profitable.

Lin said the developing countries can use such an approach to jump-start their economic development, while investors from economies like China's Hong Kong Special Administrative Region can find new growth opportunities through participation.

Lin unveiled a new index developed by his team to measure the inclusive structural transformation of different economies. The index is based on the New Structural Economics advocated by Lin, who believes that structural changes and an optimal policy mix are the foundation of sustained and inclusive growth along the progressive stages of development.

The index focuses on the critical elements of successful economic development strategies and measures a country's performance along four dimensions such as industrialization outcome, environmental protection and supportive macro- and micro-policies.

China and the Asian Tigers such as Singapore, Republic of Korea and Hong Kong and Taiwan have good scores for the index, showing that they have the potential to achieve sustainable and inclusive growth over the long term. The Czech Republic, Malaysia, Japan, Vietnam and Kenya hold the top five high scores.

China's overall score is high due to its strength in manufacturing, which compensates for a relatively bad environmental score. European economies are balanced and have good scores, too. Endi