UN report calls fairer, more balanced, sustained recovery in Asia-Pacific

08:17, May 07, 2010      

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A United Nations report released Thursday urges governments in the Asia-Pacific region to increase social spending to consolidate the region's stronger than anticipated economic rebound and to spur over the long term a fairer, more balanced, and sustained economic recovery.

"Governments must embrace this opportunity to secure the gains of the economic rebound by investing in social programs that directly benefit people hardest hit by the crisis, act to reduce poverty, and create a more sustainable economy," Noeleen Heyzer, UN Under-Secretary-General and Executive Secretary of the United Nations Economic and Social Commission for Asia and the Pacific ( ESCAP) said at the launch of the report.

The report titled "Economic and Social Survey of Asia and the Pacific 2010", an annual publication of the ESCAP provides the governments of the Asia-Pacific region - representing 62 percent of the world's population - a roadmap towards a more inclusive and sustainable development path. However, rising inflationary pressures, especially of food products, and asset price bubbles, in a number of countries make 2010 a complex year for policy makers who will have to balance sustaining the momentum of growth with financial stability. While monetary tightening may be necessary to restrain inflationary pressures, policy makers must be cautious about withdrawing fiscal stimulus packages lest the fledgling recovery process is disrupted.

The survey also recommends the use of capital controls to moderate short-term capital inflows - the result of a massive expansion of liquidity in western countries - which has created asset bubbles, inflationary pressures and exchange rate increases in the region's developing economies.

"We know from experience following the 1997 Asian Financial Crisis that it may be years before the poorest people are able to recover from the past two years' global crisis; governments need to maintain programs to help people recover their assets and livelihoods," said Dr Heyzer.

According to the survey, a sustained, long term development for all economies within the region will have to rely on creating new engines of growth by rebalancing the region with greater regional consumption through increased intra-regional trade, accelerating the development of an Asia-Pacific consumer market.

"This is the moment when the Asia-Pacific region can assure the long term benefits of the recovery by creating a sustainable, interconnected, greener, regional economy, while reducing the social and economic disparities which left it vulnerable to such crisis," said Dr Heyzer. "The region has the opportunity to strengthen its economy, its environment, its society, and better connect itself."



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