Press Conference on 2010 Survey of Economic and Social Commission

for Asia and Pacific

 

The comparatively quick and strong recovery of the Asia-Pacific region from the world economic crisis had provided an opportunity to foster a more equitable, greener, more interconnected and more stable economy in the region, a United Nations development official said today.

“An important challenge was to ensure that economic recovery did not mean a return to business as usual, but that it would become much fairer, inclusive and would result in much more sustainable development,” Jomo Kwame Sundaram, Assistant Secretary-General for Economic Development, told correspondents at Headquarters, as he launched the 2010 survey of the Economic and Social Commission for Asia and the Pacific (ESCAP), together with Amr Nour, Director of the United Nations Regional Commissions New York Office.

The survey is an annual publication that gauges the impacts of economic trends in the region, Mr. Nour said, providing the Governments of the region -- representing 62 per cent of the world’s population -- a road map towards more inclusive and sustainable development.  This year’s publication focussed on the aftermath of the financial crisis.

The region had undergone a comparatively rapid recovery, Mr. Sundaram said, but the rebound remained fragile and uneven, with risks that included rising inflationary pressures, asset price bubbles, and the dangers of global imbalances.   Asia had been lending vast sums of capital to industrial countries, and, in a sense, financing the purchase of its own exports.  In addition, if China and India were taken out of the picture, the region’s economic growth was unremarkable.

The decrease in demand in export markets and the contraction of other capital flows, such as those from remittances and tourism, represented other risks, he said.  Unemployment had stabilized, but there were more workers and many were in more vulnerable jobs.  In addition, many more people were at risk of falling into extreme poverty upon the loss of employment.

Poverty had gone down most in the Asia-Pacific region, but that was mostly accounted for by China.  The situation in the rest of the region was highly uneven; 22 million people had fallen below the poverty line because of the crisis.  Inequality, in sum, had continued to rise.

Many countries still lacked major infrastructure, social protection programmes were extremely weak in most of the region, and there was also large-scale depletion of resources and environmental degradation.  Energy needs, on the other hand, continued to grow. 

The report, he said, therefore recommended an increase in social protection programmes, an agricultural revolution to enhance food security, an environmental transformation in the energy sector and others, and more inclusive financing mechanisms for small and medium enterprises.  More cooperation between countries in the region was needed for all those purposes, including a regional financial architecture for stability and to help lessen inequalities.

In response to questions, Mr. Sundaram said that there was now consensus that any move to a new global currency, away from the dollar and other currencies being used for reserves, would be a gradual process and probably based on the issuance of “special drawing rights” in lieu of the establishment of a new currency, per se.  Mr. Nour added that new regional arrangements could be pursued for the facilitation of international trade, which was the other function of global currencies.

In regard to the inclusion of Islamic Sharia principles in a new global financial architecture, he said that it would probably occur through bringing a variety of institutions that did not offer a fixed rate of return under the global regulatory framework.

Speaking on food security, he said that there had been a positive response to United Nations calls for a reformed agricultural sector, and in Asia there was a great deal of room to take advantage of new technologies to diversify and increase output.  Mr. Nour added that last year’s survey provided a greater focus on agricultural reform.

Trade had grown between Africa and Asia, in various directions, but it was very difficult to generalize across small economies to derive best practices.  However, economies of scale were seen as important in trade success, leading to strategizing towards interregional trade. 

He could not predict what kind of global financial architecture there would be in the future, but he was certain that the ad hoc arrangements that had accumulated were not ideal.  In addition, capital account management was being seen as more important, as opposed to the capital account liberalization that had been promoted, which increases the vulnerability of economies.  It was important to be wary of financial innovations, in general.

He acknowledged that measures of world poverty were confusing; some of the confusion resulted from the fact that, in China, for example, poverty had been decreasing, while inequality also increased, and that employment was not included in some anti-poverty strategies.  The most important factor in reducing poverty was the creation of decent jobs, something that the United Nations had been consistently stressing.

Replying to other questions, he said that the International Monetary Fund (IMF) had been slightly less stringent following the financial crisis in applying conditions for loans than it had been in the past.  IMF processes in many parts of the world might have had adverse effects, but it was too simplistic to draw a causative connection between IMF conditions and terrorism, as had allegedly been done by a writer cited by one journalist.   He warned, finally, against drawing simplistic parallels between the Greek financial crisis and the earlier Asian financial crisis.

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For information media • not an official record