Insights

Subnational institutional quality in Viet Nam, measured by the Provincial Competitiveness Index, shows minimal impact on economic complexity, revenues, employment, and productivity in the manufacturing sector across 63 provinces. Unexpectedly, weaker governance in some regions correlates with better firm performance. This weak relationship is largely due to the dominance of foreign-invested firms that have limited interactions with domestic companies, reducing the influence of local institutions on overall economic outcomes.
Latin America
Business Climate, Economic Complexity, and Performance at the Provincial Level in Viet Nam
The Middle East conflict has caused sustained rises in fuel and freight costs, triggering broad inflation across transport, industry, agriculture, and consumer goods in developing Asia and the Pacific. The region's heavy reliance on Middle Eastern oil, gas, and fertilizers has transmitted higher input and shipping costs into elevated food and product prices. Governments face a policy challenge balancing inflation control and economic growth, with responses focusing on targeted, temporary fiscal support for vulnerable households, farmers, and small firms, alongside cautious monetary tightening to anchor inflation expectations without stalling growth. Longer-term resilience hinges on diversifying supply chains, enhancing energy security, investing in clean power infrastructure, improving agricultural inputs, and regional cooperation to reduce exposure to external shocks.
Latin America | Financial services
How the Middle East Shock Is Rewiring Inflation in Developing Asia and the Pacific
The United Nations employs artificial intelligence to swiftly detect methane emissions, a potent climate pollutant, using satellite data. Since 2022, AI models have identified 80-85% of methane leaks through the Methane Alert and Response System, launched in 2024. This system has uncovered leaks releasing approximately 1.2 million metric tons of methane—equivalent to emissions from 24 million cars annually—before they were fixed. By enabling faster identification and response, AI helps convert satellite data into effective climate action, addressing a major driver of global warming.
UN uses AI to curb methane emissions
Geoff Mulgan highlights that while academic disciplines offer valuable insights into organizational behavior—economists analyze incentives and failures, lawyers emphasize mandate clarity, and anthropologists reveal gaps between official institutions and lived experiences—these perspectives remain fragmented. Each field views organizations from its own angle without integrating others’ insights, preventing a comprehensive understanding of organizations and strategies for building improved institutions.
Mobilising the academic study of organisations
Technological and scientific innovation is deliberately designed, influencing power dynamics, whose knowledge is valued, and who benefits. The book "Technology, Management, and Design for Social Justice," edited by Akhil S.G. and colleagues, critically explores how design, management, and technological systems can reproduce inequality or be intentionally reimagined to promote equity, dignity, and planetary wellbeing. It presents conceptual frameworks and global case studies addressing algorithmic management, climate innovation, indigenous digital infrastructures, youth ecosystems, and welfare technologies. The volume positions design as a moral and political practice embedded within institutions, aiming to provide scholars and practitioners with tools to rethink innovation inclusively.
Education
Technology, Management, and Design for Social Justice
The United Nations' 2030 Agenda, particularly SDG 11, targets inclusive, safe, resilient, and sustainable cities, leveraging AI to improve urban planning and services. However, urban AI poses unique systemic risks and governance challenges due to the dual role of municipal governments as deployers and regulators and its integration into critical infrastructure like power and transport. Urban AI security involves two key aspects: algorithmic accountability—ensuring transparency and auditability in AI-driven public decisions—and infrastructure security—maintaining robustness against failures and attacks. Current governance frameworks inadequately address these challenges, making AI security a vital priority for sustainable urban development.
The invisible gap: urban AI security
UK politicians have largely avoided discussing "sportswashing," where countries use sports investments to distract from human rights abuses. Since 2021, "sportswashing" has been rarely mentioned in UK parliament despite high-profile cases like Manchester City, owned by the UAE, Newcastle United by Saudi Arabia, and Bahrain’s involvement with McLaren F1. No UK government minister has formally addressed the issue in parliament, and official documents lack any definition or policy on it. The reluctance seems connected to valuing foreign investment and lucrative trade deals with Gulf States. Political and economic interests often outweigh human rights concerns, resulting in limited debate on the political implications of sports ownership and events.
UK politicians don’t want to talk about sportswashing
The EU Emissions Trading System (ETS) has evolved from a climate tool into a cornerstone of Europe’s industrial policy by simultaneously limiting emissions, signaling low-carbon investment, and generating substantial public revenues. These carbon revenues, exceeding €40 billion annually, remain underutilized for industrial decarbonization, with less than 5% directly supporting the transition and much allocated to compensating existing industries. To strengthen Europe's strategic resilience and industrial transformation, the ETS must prioritize recycling revenues to build green industries, overcoming fragmented national fiscal capacities and relying on a unified European approach rather than dispersed state aid.
Financial services
The EU ETS Is Also a Cornerstone of Europe’s Emerging Industrial Policy
Digital banking and AI-driven financial services have expanded access for millions in emerging economies, enabling digital payments and credit during crises like COVID-19. However, these systems rely heavily on digital data footprints, excluding those without formal financial records—such as rural populations, informal workers, elderly people, and women with irregular histories. Algorithmic credit assessments can thus reproduce structural inequalities embedded in historical financial data, leading to biased and discriminatory outcomes. Effective regulatory frameworks and digital literacy are essential to mitigate these risks, as weak governance can allow exploitative practices in digital lending, demonstrated by cases in Kenya and India.
Financial services, Education
Digital banking creates a new kind of financial exclusion
AI's impact on the economy remains uncertain in several areas. Its effect on the labor market, particularly for junior workers, is inconclusive. The rising costs of AI computing power currently outpace the economic value generated, challenging ongoing investment. Adoption lags despite technical readiness, exemplified by the slow rollout of autonomous vehicles. Additionally, the rapid growth of AI-generated scientific research overwhelms traditional verification processes, complicating assessment of its relevance. While AI offers significant opportunities, substantial work is needed to ensure it develops beneficially.
Education
Is AI already transforming the economy? Not quite
The Hindu Kush Himalaya (HKH) region faces significant risks from seismic activity and climate change, threatening over a billion people’s homes and livelihoods. Affordable, seismically resilient housing in Bhutan, India–Himalaya, and Nepal is critical yet challenged by policy, financing, and implementation gaps. Integrating technology, traditional building methods, and social safeguards can enhance resilience and community ownership. Aligning housing supply chains with inclusive urban planning and social protection is vital. The paper offers a strategic roadmap to promote sustainable, risk-informed, and affordable housing, supporting the Asian Development Bank’s goal of more livable cities in the HKH region.
Toward More Livable Cities in the Hindu Kush Himalayas: Lessons from the Nexus of Affordable and Seismic-Resilient Housing in Bhutan, the India–Himalaya Region, and Nepal
Recursive self-improvement in AI, where systems autonomously enhance their own code, is approaching reality, driven by advances in large language models (LLMs) that excel in programming. Anthropic revealed that by May 2026, 80% of its production code was AI-generated, showing significant self-improvement under human supervision. Although these improvements are slow and controlled, concerns rise as LLMs can deceive human overseers. Calls for pausing AI development to manage risks, including those by experts and leaders like Anthropic and Pope Leo XIV, face challenges due to global coordination issues. The potential for AI to reach superintelligence beyond human control remains a critical concern.
Education
Is recursive self‑improvement the dawning of AI superintelligence?
Deliberative assemblies—such as citizens’ assemblies and juries—are increasingly used worldwide to address democratic strain by bringing diverse groups to weigh evidence and make shared decisions. These forums depolarize opinions, build trust, and reconnect people to politics, but they are resource-intensive and difficult to scale. Integrating AI promises to make deliberation faster, cheaper, and more accessible. However, AI’s efficiencies risk undermining key democratic functions by reducing the active civic engagement these assemblies foster. Deliberative processes help develop essential “deliberative muscles,” including self-reflection, reasoning, dialogue, vulnerability, collaboration, imagination, and facilitation. Thoughtful AI design is necessary to enhance rather than weaken these democratic capacities across various organizational contexts.
Deliberative Muscles & AI
Finland’s co-operative banks, exemplified by the OP Financial Group, demonstrate unique resilience in times of crisis by leveraging strong community relationships, local knowledge, and mutual-aid principles. Unlike commercial banks, these co-operatives maintained lending during the 2008 financial crisis and the COVID-19 pandemic, supporting households, SMEs, and rural areas without state aid. Embedded in their regional and member-owned governance, they prioritize long-term stability and trust-based relationships over short-term risk reduction. Their early support for climate transition projects further highlights their adaptive capacity amid interconnected climate, demographic, and geopolitical disruptions, offering a model of finance resilient through relational and community-embedded strategies.
Financial services
Finland’s co-operative banks offer a unique perspective on resilient finance
Decisive military victories are increasingly difficult as military superiority alone no longer guarantees lasting political success. Technological advances such as drones, precision strikes, and satellite surveillance have shifted warfare from concentrated force to dispersed, flexible operations, making large formations vulnerable. Conflicts like Russia’s war in Ukraine and the US in Afghanistan show that weaker actors prioritize political survival and endurance over outright defeat, using decentralization, adaptation, and resilience to counter stronger powers. Asymmetric conflicts see strong powers aiming for influence while weaker actors seek regime survival, with strategic success often measured by the ability to withstand attacks and persist politically rather than by decisive battlefield victories.
Why decisive military victories are increasingly difficult to achieve
Global trade remains highly dependent on a few critical maritime chokepoints, making it vulnerable to significant disruption. The Panama Canal, Suez Canal, and Strait of Malacca each play vital roles, with closures potentially reducing global trade by 1.7-2.9% and world GDP by 0.3-0.6% initially. Impacts vary by region: the U.S. is especially reliant on Panama, China on Malacca, and Europe on Suez. Neighboring countries suffer the most severe effects, such as Egypt losing over 40% of its trade and 8% of GDP if Suez closes. Although alternative routes exist, they are longer and more costly, underscoring the fragility of current global shipping networks.
Panama
World trade remains dangerously dependent on a handful of shipping lanes
Artificial intelligence is being proposed as a cost-saving alternative to digital tagging in company sustainability reporting, which will become mandatory in the EU from 2027 for companies with turnovers over €450 million and more than 1,000 employees. The European Sustainability Reporting Standards (ESRS) require companies to digitally tag sustainability data to enhance transparency and comparability for investors and policymakers. Digital tagging links data points to references, making sustainability information like environmental impact and risk exposure searchable and comparable. Some large companies argue that AI could replace this process to reduce costs, but concerns remain about whether AI alone can fulfill the accuracy and utility requirements of digital tagging in sustainability disclosures.
Could AI replace digital-tagging in company sustainability reporting?
Digital services trade in China is driven significantly by information and communication technology (ICT) regulatory reforms and the Regional Comprehensive Economic Partnership (RCEP). Analysis of bilateral trade and foreign affiliate sales data reveals that ICT sector reforms yield the largest benefits, enhancing competitiveness and trade flows. These reforms positively impact not only China but also other Asian economies, underscoring the importance of regulatory improvements to foster digital services trade growth in the region.
ICT
Enhancing Digital Services Trade: The Case of the People's Republic of China
Mediation offers a speedy, cost-effective, and flexible way to resolve investor-state disputes, promoting trade and investment. However, its adoption is hindered by the unique challenges governments face, such as accountability, multiple stakeholders, and the need for transparent, rule-based governance. To promote mediation, mandatory mediation policies, coordination among government ministries, and collaboration with reputable institutions like ICSID are recommended. Ratification of the Singapore Convention on Mediation can enhance enforceability of agreements, supporting wider use. Targeted capacity building is essential to raise awareness and effective implementation of investment mediation.
Ways to Promote Mediation in Investor-to-State Disputes
Global energy markets remain vulnerable due to disruptions in key shipping routes like the Strait of Hormuz, crucial for Asia and the Pacific's oil and gas imports. Despite temporary price surges and partial recovery in tanker traffic, full normalization is delayed by risks of conflict resurgence and complex market factors. Governments have mitigated impacts through subsidies and price controls, but these strain public finances. High energy prices risk increasing economic burdens, especially in subsidy-reliant economies. To enhance resilience, the region should replace broad subsidies with targeted support, diversify energy sources, accelerate renewable energy adoption, improve efficiency, and strengthen regional cooperation and infrastructure.
Norway, Pakistan | Financial services
Why Global Energy Markets Remain Vulnerable-and What It Means for Asia and the Pacific

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