PRESS BRIEFING ON 2002 ECONOMIC, SOCIAL SURVEY FOR ASIA AND PACIFIC

A publication entitled Economic and Social Survey of Asia and the Pacific 2002 -- Economic Prospects:  Preparing for Recovery was launched at a Headquarters press briefing today by the Permanent Representative of Maldives to the United Nations, Hussain Shihab, whose country is the current Chair of the Economic and Social Commission for Asia and the Pacific (ESCAP).

Also present at the briefing were Ian Kinniburgh, Director, Development Policy Analysis Division, Department of Economic and Social Affairs (DESA); Sulafa Al-Bassam, Chief of the Regional Commissions, New York Office; and Kaz Rahman, Senior Economic Affairs Officer of the same office.

Mr. Shihab said that although this was only the fifth time the survey was being presented in New York, it was the fifty-fifth time it was being issued as an ESCAP publication.  Nevertheless, the primary purpose of the survey was to give a socio-economic overview of the ESCAP region, which was a vast one stretching from Turkey in the west to the Cook Islands in the south, into the borders of the former Soviet Union, down to the Philippines and into the South Pacific Islands.  "So when we think of that region we have to think of the subregions within it, as well", he added.

According to Mr. Shihab's presentation and a summary of the survey, global and ESCAP region gross domestic product (GDP) growth declined sharply in 2001.  World trade growth also slowed in tandem.  The slowdown was particularly evident in the information and communication technology (ICT) sector and economies with a preponderance of ICT-related manufacturing activities and with high trade-to-GDP ratios (as in East and South-east Asia).  While some economies and subregions remained relatively immune initially, the speed and intensity of the global slowdown and its intensity slowed GDP growth in those economies and subregions, as well.  The events of 11 September 2001 also aggravated the slowdown, through a loss of business and consumer confidence.

The survey notes that as at early March 2002, signs of a global and regional upturn were mixed.  On balance, however, evidence of gentle recovery in both the global and regional economies was becoming more discernible.  The majority of ESCAP economies were expected to exceed their 2001 GDP growth rates in 2002.  A benign inflationary environment, spare capacity and comfortable external positions indicated that most economies in the region had considerable leeway to compensate for the loss of external demand through domestic stimulus measures.  Such measures, however, should not put sound macroeconomic fundamentals at risk over the medium-term.

The survey also states that the slowdown in 2001 needed to be seen against the background of achieving the Millennium Development Goals in the area of poverty eradication, universal primary education, promotion of gender equality and empowerment of women, reduction of child mortality and improvement of maternal health.  In that regard, there were grounds for optimism that most of the goals could be achieved in the ESCAP region.  That, however, would require

in-depth analysis and the preparation of the necessary policy strategies.  The achievement of the goals in the least developed countries (LDCs) depended critically upon donor countries accepting the need to increase official development assistance (ODA) to 0.7 per cent of gross national product (GNP).

According to the survey, recovery in 2002 is conditioned by both external and domestic factors.  Externally, the overall economic environment in the United States, the main engine for global upturn, remained uncertain, by and large, despite some positive sign on the horizon, such as improved consumer confidence and a significant increase in the last output of 2001.  Japan was in the throes of yet another recession, the third in the last decade, while the European Union, based on present evidence, was unlikely to match its 2001 performance in 2002.  Domestically, most economies continued to grapple with inevitable trade-offs involved in running loose fiscal and monetary policies in the short-term, against the need to maintain sound macroeconomic fundamentals over the medium-term.

The survey states that economic recovery in the ESCAP region in 2002 and beyond was essentially predicated upon a significant improvement in the external environment, supported by appropriate domestic policy measures.  The varying characteristics of each subregion, however, suggested that policy approaches needed to be conceived in a more nuanced way in order to reflect the differences between and within the various subregions, or within a particular group of countries, for instance, the LDCs.

Mr. Kinniburgh informed correspondents that DESA had also issued a World Economic Forecast yesterday and the question that would be raised would most likely be -- why were the numbers in that document and ESCAP's Survey slightly different?  That was due to time lags.  Obviously, ESCAP had produced a printed book and that did not happen overnight.  The cut-off point for that body's data was a bit earlier than the number put out by DESA yesterday.  But, the big story was essentially the same.  There was a very rapid slowdown in 2001, which particularly affected the exporting countries within the Asia region, and there was a turnaround in 2002.

Ms. Al-Bassam said the survey showed that there were some Millennium Goals that were likely to be achieved and others that presented more of a challenge.  Based on ESCAP's analysis of past trends, the Commission believed that poverty reduction by 2015, for example, was possible.  It also noted that in South Asia, and other individual countries and subregions, addressing that same problem might be less successful.  The ESCAP also indicated that sustained efforts were needed by all to ensure that goal of poverty reduction was achieved.

In addition to ESCAP, the New York regional office represents the Economic Commission of Europe (ECE), Economic Commission for Latin America and the Caribbean (ECLAC), the Economic Commission of Africa (ECA) and Economic and Social Commission for Western Asia (ESCWA).

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