Developing economies in the Asia-Pacific region continue to fare well in comparison to the rest of the world, but structural weaknesses constrain growth prospects, says a new report. The report released on Friday by the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) emphasised that more inclusive economic growth is key to ensuring sustainable prosperity for all.
The report states that 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. 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.
To provide guidance to Asia-Pacific economies, ESCAP has also introduced a new multidimensional Index of Inclusiveness. Applying a core set of 15 indicators of the economic, social and environmental dimensions of development, the index assigns equal weighting to each variable, to more comprehensively assess the degree of inclusive outcomes.
The study reveals that despite impressive economic growth having lifted millions of people out of extreme poverty in the Asia-Pacific region over the last few decades, about 743 million people are still extremely poor. Moreover, the gains of growth have not been evenly spread, going more to the already better off. Women and rural people are worse off than men and urban people.
The report finds the most inclusive growth in Kazakhstan, followed by the Russian Federation and Thailand while it has been the least inclusive in Bangladesh, India, Nepal and Pakistan. The report also signifies a concern that income inequalities are large and widening in many countries, as differences in access to critical public goods, such as education and health services, differ across income quintiles.
The survey reports that the growth potential of Asia-Pacific developing countries, is being held back by infrastructure shortages and the excessive commodity dependence of some countries.
Launching the Survey in Bangkok, United Nations Under-Secretary-General and ESCAP Executive Secretary, Dr Shamshad Akhtar, called on the regional policymakers for integrating and mainstreaming inclusive growth by adopting a mixed set of measures. “Adopting ESCAP’s new multidimensional index will assist policymakers to better review and monitor progress on inclusive growth,” Dr Akhtar explained.
The report remarks that developing economies in Asia and the Pacific 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.
The study highlights how the macroeconomic imbalances and severe power shortages are key concerns in South and South-West Asia. Citing the example of the recent earthquake in Nepal, the report said that the natural disaster is a fresh reminder of how natural disasters could reverse economic and social gains, with massive loss of life and livelihoods.
The report cautions that the region would remain susceptible to a range of risks and uncertainties – among others, possible fresh bouts of financial market volatility, delays in addressing structural impediments, and political disruptions.
