|Department of Public Information • News and Media Division • New York|
Press Conference to Launch 2012 ‘Economic and Social Survey of Asia and the Pacific’
The Asia-Pacific region will continue to be the fastest growing region in the world this year despite a drop in the growth rate from 7 per cent in 2011 to 6.5 per cent this year, correspondents heard at a Headquarters press conference to launch the 2012 Economic and Social Survey of Asia and the Pacific produced by the United Nations Economic and Social Commission for that region (ESCAP).
The Survey analyzes the short- and medium-term challenges for the Asia-Pacific region and the outlook for the year ahead, providing policy options for Governments to overcome challenges and continuously pursue inclusive and sustainable development.
Addressing correspondents, Amr Nour, Director of ESCAP’s New York Office, said that chief among the factors that had led to the slowdown were the global context of the euro debt crisis, as well as some regional and domestic trends. Those mainly stemmed from China’s attempt at a “soft landing” by managing the asset bubble in its domestic market and ensuring price stability from that perspective. That had led to a reduction in China’s own domestic growth, dropping to 8.6 per cent in 2012 from 9.2 per cent in 2011. The region, however, was continuing as an anchor of stability and a new growth pole for the world economy.
Mr. Nour, who was joined by Robert Vos, Director, Development Policy and Analysis Division, Department of Economic and Social Affairs (DESA), said a second key message of the survey was that the short-term and medium-term challenge for the region was not the question of how to sustain economic growth, but rather how to ensure that such growth was more inclusive. The prospect was good for sustaining economic growth, but income inequality had significantly increased in the region. In addition, the growth experienced in the region had not trickled down into jobs, so unemployment remained a challenge, particularly youth unemployment, which was three times higher than for other groups.
Another key message was that the medium and long-term challenge for the region was how to cope with high commodity prices. The current trend was here to stay; some commodity prices had recently risen by as much as 17 per cent. Policy- makers should factor that into the equation. The survey provided some policy options.
Providing an analysis of the survey, Mr. Vos said that while growth was still strong in the Asia-Pacific region, it was slowing because of what was happening in other parts of the world, including the financial impact from the Eurozone problems and rising oil prices.
There had been a surge in oil prices early in year, and although the prices had stabilized, the risk was still there, he went on. If prices went up, it could slow growth in the developed countries, pushing up inflation in the Asia-Pacific region. More investment flowing to the region, however, could counteract a slowdown.
The report highlighted seven policy challenges confronting the region, including how to manage keeping up growth with the risk of higher inflation, Mr. Vos said. In recent years, many of the countries in the region had restricted monetary policies in order to dampen inflation risk even though most of the inflation came from outside and was due to higher food and energy prices. Some inflation, however, still came from strong domestic demand. Those inflationary trends could dampen growth a bit, so that there still remained a challenge as to how to manage the growth and inflation objectives.
He highlighted other policy challenges, including how to deal with volatile, and sometimes retreating, capital flows; volatile commodity prices; jobless recovery; rising income and social inequality; disaster risks; better quality growth; and moving towards a development-focused global economic environment and governance. The report suggested the countries of the region should be prepared for continued rising commodity prices and volatility. The answer was for them to further diversify their economies.
Among the report’s conclusions, he said, was that the region faced a challenging economic climate, but that most of the countries were in a favourable position to undertake policy actions to stimulate and resume growth. The report also noted that enhanced regional cooperation would enable national policies to have greater influence at the regional and international levels. Also, inclusive development boosted new growth drives by addressing wide gaps in income and social progress.
Responding to a question from a correspondent, Mr. Vos said that the report did not focus on the austerity measures in Europe, but took into account their impact on the Asia-Pacific region. Thus, it addressed the issue of managing the growth–inflation nexus.
Replying to another question, Mr. Nour attributed the absence of growth in employment in the Asia-Pacific region, despite the growth in gross domestic product (GDP), to the fact that most of the money went to investment. He said a lot of the annual gains were being reinvested. Domestic-led growth, hopefully, would put more money into a lot of hands and, as such, increase employment as opposed to what occurred under export-led growth.
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