PRESS CONFERENCE BY ESCAP

The economic performance of the Asia Pacific region strengthened further in 2000 following an impressive recovery after the 1997 Asian financial crisis, according to a United Nations economic survey launched at a Headquarters press conference this morning.

The report, entitled “Economic and Social Survey of Asia and the Pacific, 2001” was released by the Economic and Social Commission for Asia and the Pacific (ESCAP), a body comprised of over 50 countries within the region.

Bagher Asadi (Iran) introduced the report on behalf of Iran’s Foreign Minister Kamal Kharrazi, who is the current Chairman of the Ministerial-Level Commission of the Economic and Social Commission for Asia and the Pacific (ESCAP). He was joined by Sulafa Al-Bassam and Kazi A. Rahman, both from the Regional Commission’s New York Office.

The report provides a review of general overall trends, as well as a specific examination of the situation in each country in the region on the basis of information received up to November 2000.  It also includes a table on the rates of economic growth for selected countries, analysis of near-term prospects, and policy recommendations for the forthcoming International Conference on Financing for Development.

According to the report, the average growth rate of the developing countries of the region increased by one percentage point, while the developed economies improved their collective growth rate by 1.3 percentage points.  Among the various regions, Southeast Asia recorded the most impressive GDP growth, while the Pacific Island economies lost ground.

Mr. Asadi said that within the ESCAP region, growth was stimulated by both foreign and domestic factors.  World trade registered a ten per cent increase in the year 2000 and several economies in the region registered export growth of 20 per cent or more.  On the domestic side, there had been an easing of interest rates, as well as some reform and restructuring in the financial and corporate sector.

All in all, he said, the region was less vulnerable to outward negative pressures than was the case back in 1997 when the crisis hit quite a number of important, dynamic Asian economies.  The major challenge before the ESCAP region was to maintain the momentum of growth, especially in the face of the likely unfavorable external environment.  This called for both national and regional initiatives and policies.

The region now had 3.7 billion people, which was almost three fifths of the world population of 6.1 billion people, he said.  This number was expected to rise to 4.7 billion by 2025, an increase of 1 billion within the next 24 years. Migration was also an important demographic factor for the region and was expected to continue.  A coordinated policy between States was necessary so as to mitigate the socio-economic implications of the rather substantial movement of populations.

The second part of the report, he said, provided ESCAP’s contribution towards the forthcoming International Conference for Financing for Development. The preparatory process was underway, and the final event would take place in Mexico sometime in late March or early April of 2002.  The substantive agenda covered all major components of financing for development, including official development assistance (ODA), internal and external mobilization of resources, trade, debt, and the reform of the international financial structure.

Mr. Asadi said the report showed that the major part of the resources for development in the region was mobilized domestically.  Official development assistance had been declining in general, and foreign direct investment (FDI) had been concentrated in only nine countries of the ESCAP region.  The instability of the international financial markets also had a negative impact on the private flow of capital.

As a result, the report recommended that national governments implement consistent macro-economic policies and enhance transparency of the budget process, among other things, he said.  ODA flows should be increased to the region, particularly to the least developed countries (LDCs) and the Pacific island economies.  Aid fatigue in the donor community had to be addressed, as it was the major reason for the steady decline in ODA.  Capital controls, although sometimes seen as a negative development, should be considered as an option for some countries.

Asked by a correspondent why it had taken two decades to hold a conference on development, Mr. Asadi replied that a major international conference needed the support of the entire intergovernmental body and this had not existed until recently.  In 1997, the initiative gained ground and then on the basis of the 1998 Second Committee General Assembly resolution, the preparatory process had begun.

Responding to another question, the Ambassador said that the most contentious issue facing the Conference was reform of the international financial structure.

Had what happened particularly in the United States’ stock market since November made future prospects less promising? a correspondent asked.

Mr. Rahman replied that there were many crosscurrents going around in the world economy and also in the ESCAP region. In an increasingly globalizing world, the situation in the United States stock market had a bearing on the Asian markets, but then there were also many other positive factors, which could reverse any negative factors.  Many countries, including Malaysia, India, China and others in the region had taken immediate policy measures to generate greater domestic demand.  Trade had also been growing within the region.

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