14 May 2015 – While developing economies in the Asia-Pacific region continue to fare well in comparison to the rest of the world, structural weaknesses, like infrastructure shortages and excessive dependence on commodities will continue to hamper their growth potential, a new United Nations report on the region says, calling for greater economic inclusivity if sustainable development is to succeed.
“To enhance well-being, countries need to go beyond just focusing on 'inequality of income' and instead promote 'equality of opportunities,'” said Shashad Akhtar, Executive Secretary of the UN Economic and Social Commission for Asia and the Pacific (ESCAP) on the launch in Bangkok today of the 2015 economic and social survey of the region,Making Growth More Inclusive for Sustainable Development.
In the report's preface, she notes that as the international community transitions globally from the landmark Millennium Development Goals (MDGs) to a more ambitious path of sustainable growth and development, inclusiveness must be integrated and mainstreamed in policymaking. Indeed, ESCAP's 2015 Survey for the region underscores the need for the adoption of policies necessary for inclusive growth, which is both a prerequisite for meeting the outstanding MDG commitments and critical for effective implementation of an ambitious sustainable development agenda in the post-2015 era.
Ms. Akhtar stressed the need to promote quality growth and shared prosperity, calling on regional policymakers to integrate and mainstream inclusive growth. Inclusiveness, she said, requires continued stability and sustainable growth.
“Adopting ESCAP's new multidimensional Index will assist policymakers to better review and monitor progress on inclusive growth,” Ms. Akhtar explained, referring to the Commission's newly introduced Index of Inclusiveness, which provides indicators on the economic, social and environmental dimensions of development and seeks to enable a more comprehensive analysis of inclusiveness.
According to the report, the Asia-Pacific growth trajectory, while encouraging in some areas, lags behind in others, and is in a process of adjustment in major economies of the region. Augmenting and enhancing inclusiveness will only be achieved if accompanied by a multidimensional strategy that recognizes the need for simultaneous advances in the economic, social and environmental aspects of development.
Despite the challenges, the Survey shows developing economies in the Asia-Pacific region will continue to perform well compared to the rest of the world. Growth in the region's developing economies, at 5.9 per cent, will remain at a similar rate in 2015 compared to 2014, when the figure was 5.8 per cent, while inflation should remain low thanks to low international oil prices.
According to the report, the region stands out for its economic growth achievements, albeit in a somewhat uneven manner. Real incomes per capita in developing economies of the region have doubled on average since the early 1990s. Particularly impressive is a seven fold increase in real income per capita in China since 1990, as well as its tripling in Bhutan, Cambodia and Viet Nam over the same period.
Besides other policies, this economic growth performance has helped lift millions of people out of extreme poverty– ahead of the 2015 MDG deadline – and reduced by half the proportion of people whose income is less than $1 a day.
The Survey found significant reductions in extreme poverty alongside rising income inequality, particularly in urban areas of developing countries, while growth in the availability of productive and decent employment would remain low. Progress was also needed in boosting equality of opportunity, especially for women and girls, by broadening access to quality education and adequate health care.
The report also highlighted some of the critical policy issues for subregions, including excessive dependence on natural resources and worker remittances for economic growth in North and Central Asia, as well as employment and climate-related challenges in Pacific island developing countries. Macroeconomic imbalances and severe power shortages are key concerns in South and South-West Asia, along with weaknesses in infrastructure and skilled labour shortages in South-East Asia.
As illustrated by the recent earthquake in Nepal, which provided a fresh reminder of how natural disasters can reverse economic and social gains, with massive loss of life and livelihoods, the region would remain susceptible to risks and uncertainties. As well as the danger posed by natural disasters, fresh bouts of financial market volatility, delays in addressing structural impediments, and political disruptions also posed threats.
In pursuit of such inclusive growth, Ms. Akhtar also urged Asia-Pacific Governments to focus on domestic resource mobilization, from national budgets to the private sector.
“While traditional sources of finance such as tax revenues and official development assistance are important, in order to bridge the wide financing gap, efforts to deepen the region's capital markets and engage the private sector must be intensified,” she said.