Asia Pacific: Restoration should see a ‘new social resolve’
The disruptions include “rising inflationary pressures, rising interest rates, shrinking financial space” and the global economic landscape developed as a result of the Russian invasion of Ukraine.
Economic growth in developing countries in the region is expected to slow to 4.5 percent in 2022 and 5 percent in 2023. During the year 2021, the economic growth of the region was 7.1 percent.
Loss of 2 trillion
Countries with developing economies in the region Covid-19 Because of this, between 2020 and now, the total loss is estimated to be about two trillion dollars.
The survey warns of fiscal cuts in public sectors such as health care, education and social security, in order to maintain the growth gains made in recent decades and prevent inequalities from deepening across the region.
The report shows that the epidemic has deprived more than 82 million informal workers of employment and more than 70 million children of schooling in Asia and the Pacific.
The commission says the situation will adversely affect future income prospects and overall productivity growth. While in the Asia-Pacific region, an additional eight and a half million additional people have already been pushed into extreme poverty by the year 2021.
The commission’s executive secretary, Armada Salsia Elisjahabana, says developing countries in the region, while balancing public health and protecting livelihoods as they learn to cope with the presence of COVID-19, will build a more sustainable society with equal opportunities and inclusive results. Now is the time to lay the foundation for a just future.
Three point action plan
The Commission has recommended a three-pronged policy agenda for the region with the objective of shaping an inclusive economy.
First, developing countries in the region, instead of cutting public spending, should increase spending towards basic universal health coverage, increase efforts towards universal primary and secondary education, and expand social security.
The commission argues that thanks to “smart” fiscal policies, the effects of public spending and revenue collection and overall efficiency can be improved. At the same time, new sources of income should be explored, which may include measures such as shifting the tax burden on high-income households and taxing the digital economy.
Second, the 2022 survey argues that central banks in the region need to shift their traditional monetary policy approaches to promote inclusive growth. Central banks can invest a portion of official reserves in social bonds, focusing on reducing and stabilizing inflation.
Third, the governments of countries should actively guide the process of structural economic transformation and take an active part in shaping and managing for more inclusive outcomes. Digital robotics and the AI revolution are guiding this transformation process.
These include the development of labor-intensive technologies, inclusive access to quality education, skills redevelopment, strengthening labor bargaining capabilities and support for social security platforms.
The Economic and Social Survey in Asia and the Pacific is the oldest and most comprehensive annual study of the United Nations in the field, providing information on policy-making in the region. The survey was first published in 1947.