Waters Economics celebrates its 4th Anniversary

4 Years  |    8 Countries   |   30+ Projects

Thank you to all our friends and colleagues who have helped us along the fabulous journey of our first 4 years.  With best wishes from Fiona and the team.

Fiona Waters Managing Director

Colin Arnott  Director of Research  |   Kristen Saul  Associate Director

Jackson Hui  Consultant  |   Yuan Fang  Junior Consultant

Waters Economics speaks at PERE Asia Summit 2016

Fiona Waters, Managing Director of Waters Economics, recently spoke at the PERE Asia Summit, an international conference on the future of Asian real estate, attended by more than 450 industry leaders. 

Fiona spoke on the panel session on ‘Xi, Abe and Modi- the impact of economic reform on private real estate’. As the only economist on the panel, Fiona provided an alternative, macro-economic viewpoint on the impact of Premier Xi, Prime Minister Abe and Prime Minister Modi’s reformist economic policies on real estate markets.

"Whilst short-medium term economic policies, as well as local demand and supply are important factors influencing the market; when looking at investments, I would also be focusing on long term trends and structural change to identify niche opportunities" said Fiona. For example in India, where the urban population is only 30%, compared to China at 55% and Japan at over 90%, and where the median age is only 27, the long term structural demand for residential units for young families is strong.  Don't fight the tidal flow, find the strong current and go with it. 

Images courtesy of PEI Hong Kong 

Fiona Waters and other speakers at PERE Asia Summit 2016

Waters Economics on winning team for the Airport Authority Hong Kong Master Plan 2035

Waters Economics is a member of the Landrum & Brown (L&B) team, recently awarded a two-year contract by the Airport Authority Hong Kong (AAHK) to undertake the Master Plan 2035. 

Waters Economics is delighted to be a member of the L&B team, joining global leaders in airport and aviation planning to advise the AAHK on future strategy, says Fiona Waters, Managing Director.

The Master Plan will identify the opportunities for Hong Kong International Airport to grow as a leading global ‘aerotropolis’ and optimise its ability to serve a wide range of aviation markets and stakeholders.   The Waters Economics will focus on the future aerotropolis, the economics of business aviation and new business opportunities. 

Other sub-consultants on the team include Urbis, MVA Asia, Knight Frank, CAPA Consulting and Meinhardt.

Hung Shui Kiu, a new employment node in Hong Kong? Our views.

Waters Economics has submitted a written response to the Stage 3 Community Engagement for the Hung Shui Kiu (HSK) New Development Area (NDA) in the North East New Territories, Hong Kong.  HSK is planned to be a next generation new town for Hong Kong.  

Our submission was titled Implementing HSK as a viable employment node?  The question mark is subtle but vital.  Whilst we support the overall intention for economic development objectives, we raise concerns about whether the employment target of some 150,000, which will make HSK the largest employment node outside the metro area, can be achieved.

Our submission included analytical evidence to identify some of the weaknesses and illustrate the type of analysis we would expect to see in support of an NDA with such a high employment target.

"HSK needs to increase the planned population and improve housing choice and mix to compete with other destinations, in order to pull in jobs from elsewhere and achieve the employment target." Waters Economics

We agree that the economic positioning of HSK is of strategic significance to Hong Kong but strong competition means HSK needs to demonstrate a clear comparative advantage and there is a lack of credible evidence or analysis on this.  HSK aims to be a major new employment node in Hong Kong but the employment target is exceptionally high and will require a significant move against market trends, an aspect which appears to have been overlooked.

The planned population compared to the target employment is too low.  To help achieve the economic development objectives and the employment target, we suggest:

• to increase the planned population to support jobs serving local/regional markets
• to improve housing choice and mix, and increase private housing to attract businesses and skilled labour

District Employment per 100 residents, 2014

Persons engaged by district and the ratio of jobs serving external/territorial markets and jobs serving local/regional markets

If you would like to receive a copy of our submission please get in touch with us enquire@waterseconomics.com

More than 50 countries sign up to be members of AIIB

The 31st March was the official deadline for countries to apply for founding member status in the new Chinese-led Asian Infrastructure Investment Bank (AIIB). AIIB is intended to make up for the gap in funding the region needs, including the construction of roads, ports, railways and other infrastructure projects estimated at $800 billion by the Asian Development Bank (ADB).

Membership had become something of a test of diplomatic clout between China and the United States because the development bank is seen as a challenger to existing institutions like the World Bank and the ADB. The US had urged countries to delay until the AIIB it could show sufficient standards of governance and environmental, labour and social safeguards. However, recent positive statements from the IMF and the other multi-laterals on joint financing, suggest the international view is that as more countries join the bank, the more likely AIIB will have to follow international standards and the less likely China will be able to use a multilateral institution to wield influence in the region.

There are now a total of 57 prospective founding members (PFM), 37 in Asia and 20 outside the region.  Only the United States and Japan, now remain conspicuously absent from the list. Founding members have the right to create governance and operating rules for the bank.

As might have been expected, Hong Kong was ahead of the pack in signing up. February’s Hong Kong Budget speech announced the SAR would actively pursue the possibility of joining AIIB. The SAR government submitted its letter of intent to join the AIIB on 31st March. Before attending the ExCo meeting on the same day, Chief Executive (CE) Leung Chun-ying said that “the SAR government would like to play its role in the AIIB. However, participation needs LegCo approval during the decision-making process” and, he urged lawmakers not to filibuster its progress.

Waters Economics agree that AIIB membership will benefit Hong Kong. As the CE suggests, as a global financial hub, Hong Kong has the experience and expertise to provide a full range of fund raising and other financial services. However it is insufficiently widely recognised that, as a long term member of the ADB (since 1969), 17 years before China (since 1986), Hong Kong also provides some of the leading economic, engineering, institutional and other development expertise in infrastructure project preparation and evaluation services across the wider Asian region from the Pacific to the Caucasus.

As will many organisations, we await with great interest how the politics and international relations play out in the formulation and in particular the governance of the new AIIB. 

AIIB 57 Prospective Founding Members                                                                           

Understanding the spatial growth of East Asia’s cities over the past decade

The World Bank recently released the East Asia’s Changing Urban Landscape report, a study on the spatial growth of urbanisation in East Asia between 2000 and 2010. The study used detailed data collected from more than 850 urban areas along with satellite imagery to provide one of the most comprehensive studies on the pace, scale and form of urbanisation to date.

The study found:

• Nearly 200 million moved to urban areas in East Asia from 2000-2010, a figure which would be the world’s sixth largest population for any single country.
• Most of East Asia's population still lives outside urban areas, meaning the region will continue to face decades of further urbanisation.
• The Pearl River Delta in China – which includes the cities of Guangzhou, Shenzhen, Foshan and Dongguan – has overtaken Tokyo as the world’s largest urban area in both size and population, with more inhabitants than countries such as Argentina, Australia or Canada.

Important to the work of economists and planners across the region, the study reinforced the correlation between urbanisation and economic development. GDP per capita for more than 12 countries was tracked alongside the growth of the urban population (as a percentage of whole population) and consistently showed a positive correlation. However, whilst urbanisation can bring economic opportunity, it must also be accompanied by strong urban management to avoid the problems of exacerbated inequality in access to services, employment and housing along with significant environmental impacts.

The good news is that East Asia appears better equipped to face the challenges of urbanisation. When comparing the urbanisation threshold of 50%, East Asia is urbanising at higher incomes, providing cities with the opportunities to finance the infrastructure required to support urban growth. East Asia passed this threshold in 2009 with average GPD per capita at $5,300 which is significantly higher than Latin America who crossed the same threshold in 1961 with a GDP per capita of $2,900. In comparison Sub-Saharan Africa with an urbanisation rate of 37%, has an average GDP per capita of $992. 

Communicating complex economic and demographic data is always a challenge for economists and planners. In response, the World Bank set up a competition to visualise the massive data set developed for the East Asia report. Released this week, the winning entry by Nadieh Bremer is a fascinating summary of the spatial story of urbanisation in region and can be viewed by clicking on the image below.

Waters Economics member of winning team in Dharavi Master Plan Competition

Image by M M 

Waters Economics was a key team member of one of the winning entries in Reinventing Dharavi: An International Ideas Competition. The international competition called for professional planners, economists and designers to generate new ideas and strategies to improve the long term social, economic and physical development of Asia’s largest slum Dharavi, Mumbai.

Dharavi, home to about a million people, is world famous for its thriving entrepreneurial economy and community spirit.  Although sometimes described as a model for future development, Dharavi has all of the usual problems of slums including unsanitary living conditions, unsafe workplaces, and a high prevalence of disease.

In a project team led by UDP International, Waters Economics was responsible for economic, financial, and governance aspects. The team recommended a range of economic and financial mechanisms for a phased formalisation of business and dwelling purchase, whilst recognising the importance of maintaining livelihood and affordability. The team was commended for dealing with important issues and the comprehensive coverage of the submission. 

Phase II of the Harbourfront Authority Consultation concluded

The Harbourfront Commission and Development Bureau recently completed the Phase II Public Engagement Exercise for the proposed establishment of a Harbourfront Authority.

The idea of a Harbourfront Authority was put forward by the Harbour Business Forum (HBF) and expounded in the Vision and Delivery Plan for Victoria Habour, led and authored by Fiona Waters of Waters Economics.  The report provided an evidence-based business case for changes to the existing planning and decision-making process, outlining how a dedicated authority could lead the transformation of Victoria Harbour and overcome current inadequate planning and poor management. The report was hailed as “exciting and innovative” by the Secretary for Development.

Whilst government has revised the original role and remit envisaged for the Harbourfront Authority, Waters Economics has been encouraged by the broad public support for a new statutory body and we look forward to the outcome of the Phase II Public Engagement Exercise.

The Economics of Human Rights

Image by ND Strupler

Waters Economics’ Colin Arnott, along with Margot Salomon, Associate Professor at  the London School of Economics, have published a paper on the value of human rights in economic development decision-making. The paper draws on Colin’s 30 years experience as an international development economist to examine how the normative judgments of human rights might be integrated into neoclassical welfare economic approaches used in international development to improve decision-making.

 The paper targets international organisations that, in the absence of alternative frameworks, tend to use conventional welfare economic criteria of economic efficiency and aggregate social utility in making value judgments. All very well in theory, but these criteria are difficult to apply in practice and lack the ethical basis that human rights can bring to making choices in development decision making.

The paper was selected as the lead article in Routledge’s inaugural published edition of the Nordic Journal of Human Rights in 2014.