The United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) made the remarks in its latest regional macroeconomic outlook report released last weekend, emphasizing that more inclusive economic growth is key to ensuring sustainable prosperity for all.
Growth in the region’s developing nations will increase only slightly, to 5.9 per cent in 2015 from 5.8 per cent last year, with no significant change expected in 2016, according to the Economic and Social Survey of Asia and the Pacific 2015, ESCAP’s annual flagship publication.
Inflation is also forecast to further decline and remain low, largely due to lower international oil prices, which have led to interest rate cuts in many economies of the region.
The growth potential of Asia-Pacific developing economies is being held back by infrastructure shortages and the excessive commodity dependence of some countries. The fragile global economic recoveries, and consequently subdued global trade, pose additional challenges.
Launching the Survey in Bangkok on May 14, United Nations Under-Secretary-General and ESCAP Executive Secretary Dr. Shamshad Akhtar emphasized the need to promote quality growth and shared prosperity in the region, calling on regional policymakers to integrate and mainstream inclusive growth by adopting a mixed set of measures to achieve better social and environmental outcomes, to enhance public welfare.
ESCAP has also introduced a new multidimensional Index of Inclusiveness to provide guidance to Asia-Pacific economies.
“Adopting ESCAP’s new multidimensional Index will assist policymakers to better review and monitor progress on inclusive growth,” Dr. Akhtar explained. The sample of 16 regional economies assessed in terms of the Index showed overall progress at the national level, but that significant socioeconomic disparities within countries remain, for example across gender, rural and urban divides, and geographical regions.
Other findings of the Survey reveal mixed progress, with significant reductions in extreme poverty, accompanied by rising income inequality, particularly in urban areas of major developing countries, as well as slow growth in the availability of productive and decent employment.
Developing economies in Asia and the Pacific also need to make better progress in ensuring equality of opportunity for all, especially women and girls, by broadening access to quality education and adequate health care.
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. The recent earthquake in Nepal is a fresh reminder of how natural disasters can reverse economic and social gains, with massive loss of life and livelihoods.
The ESCAP analysis also argues in favor of caution as far as the monetary policy stance of developing economies of the region is concerned. One reason for this advice is the increase in volatility of oil prices on a rising trend since mid-March, with ESCAP predicting that $60-$70 per barrel is the likely floor to the oil price during 2015.
“Without a vibrant and strong private sector, tackling poverty and rising levels of inequality and creating jobs will not be possible,” notes the Survey, highlighting the critical role of private sector in making growth more inclusive.
The Executive Secretary also urged Asia-Pacific Governments to focus on domestic resource mobilization, making a series of recommendations for Governments to not only increase their own revenues but importantly to also better tap private sector resources for sustainable development – in particular for climate-friendly infrastructure and social financing.