PRESS CONFERENCE ON ECONOMIC AND SOCIAL SURVEY FOR ASIA AND PACIFIC

Press Briefing

PRESS CONFERENCE ON ECONOMIC AND SOCIAL SURVEY FOR ASIA AND PACIFIC

The Economic and Social Survey for Asia and the Pacific 2000 was set against the backdrop of Asia's recovery from its financial crisis and the contagious effects, the Permanent Representative of Mongolia to the United Nations, Jargalsaikhany Enkhsaikhan, told correspondents at a Headquarters briefing today. The survey, which was completed by the Economic and Social Commission for Asia and the Pacific (ESCAP), will serve as the main document for discussion at the Commission's fifty-sixth session to be held in June.

Mr. Enkhsaikhan was accompanied at the briefing by ESCAP’s New York Office Chief, Sulfa Albassam, and Senior Economic Officer, Kazi Rahman.

Giving a brief outline of the survey’s key findings on reform and on the region's economy, Mr. Enkhsaikhan said it assessed the policy initiatives taken at the country and international levels. It also provided an analysis of macroeconomic developments in the various subregions of ESCAP during 1999, outlines the broad policy issues facing the member States during the current year and in the future, and identified a number of areas for future policy action.

Referring to the unexpected growth in the world economy during the past year, he said that was also reflected in the countries of the region -- the aggregate growth rate was nearly 2 per cent more than over the 3 per cent that had been forecast. That represented a remarkable turnaround from a virtually no growth experience in 1998. During that year, of the 25 countries in the region from which data was available, eight had recorded negative growth. In 1999, only two recorded such growth. Higher growth had currently been achieved in an environment of lower inflation and enhanced business and consumer confidence.

Mr. Enkhsaikhan also remarked on the increasing flow in foreign investment in the region, a phenomenon which, combined with economic restructuring efforts supported by fiscal stimuli, enabled the current trend the economy was taking. Pointing to the future, he noted that the survey reflected regional optimism and estimated that its countries should grow at around 6 per cent on average, compared to 5 per cent in 1999. Of course, there were risks and pitfalls, he emphasized, but the continued economic and financial restructuring in Asia should better prepare its countries to face the economic downside.

He said that maintaining expert competitiveness and reducing reliance on fiscal measures to sustain growth should remain a priority, although they raised difficult policy issues over the medium term. The crisis had demonstrated inadequacies in the region in providing social protection to society's vulnerable groups. The survey devoted a chapter on social security and safety net issues, in which it noted that expansion of that sector involving both the State and private sectors deserved urgent consideration of the policy makers of the region. Another part of the survey was devoted to an analytical policy study of economic and financial monitoring of the region that could promote the exchange of information and an early warning system.

Continuing, he noted that four modalities had been outlined for monitoring: informal exchange of experiences among interested countries on the selection and interpretation of leading indicators; engaging in discussions organized in collaboration with the relevant international bodies; developing formalized survey

Asia & Pacific Survey Press Conference - 2 - 22 May 2000

mechanisms under subregional groupings; and strengthening the technical aspects of surveillance at the national level. ESCAP could contribute to the modalities by convening meetings among countries of the region and by holding seminars on subregional experiences in that area.

A correspondent asked if Mongolia’s geo-political position in the region would influence any attempt towards an economic link between the Asia/Pacific region and Europe. What was the status of those negotiations at the moment?

Mr. Enkhsaikhan responded that his country could be considered a possible bridge between Asia and Europe because the shortest distance between Rotterdam and the Sea of Japan goes through Mongolia. That would positively affect trade in terms of both transportation and time. Mongolia was currently holding discussions with Russia and China to develop a subregional mechanism on transportation. Last week, a tripartite meeting was held to discuss a draft agreement that might facilitate transit through Mongolia. If an agreement was met, many countries that would like to trade between Europe and Asia could use a Mongolian railway.

Were there any countries in the region that considered social security concerns an urgent priority? asked another correspondent. Mr. Enkhsaikhan noted that most of the countries in the region were concerned with the social impact of the economic crisis. The importance of the social safety networks had been brought to the fore during that time. Many countries had been affected by unemployment and other social ills. Although the Asian economy was growing, social problems prevailed. Asia was the continent where most of the world's poor lived and social questions were not being currently addressed.

Also responding to the question, Mr. Albassam, Chief of ESCAP’s New York Office, said because of the financial crisis, Member States, as well as other developing countries, had also started to think seriously about lessening the negative impact of the crisis on vulnerable populations. The survey provided examples of the experimental social schemes and initiatives currently under way.

Did the survey analyse the admission or non-admission of China to the World Trade Organization (WTO)? A correspondent asked.

The survey had been prepared with the assumption that there would be no hindrance to trade, said Mr. Rahman, Senior Economic Officer in the New York Office, and that China's admission process would be accommodated. ESCAP had strongly supported that State's admission, as well as for other countries of the region that were not members of the WTO. Several countries of the region were not yet members of the WTO, he pointed out. Recently, the WTO had instituted training programmes for those States.

What effect did the continuing growth of China as an emerging economic power have on other countries in the region? A correspondent asked. Were they concerned?

It was considered a positive development, Mr. Rahman said, as it gave scope for more inter-regional trade. Regional trade with China had experienced more dynamic growth during the past few years than with other States worldwide. The financial crisis was a setback, but countries in the region were increasingly trading among themselves. Under the auspices of ESCAP, there was a preferential trading arrangement with the WTO -- the Bangkok Agreement. China had recently become a member of that Agreement. * *** *