Effective governance the key to Asia-Pacific economic growth
Effective governance the key to Asia-Pacific economic growth
Despite the positive economic outlook for 2017, Asia-Pacific economies including Laos are vulnerable to rising global uncertainty and trade protectionism.
This was a statement taken from the annual flagship report of the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) launched recently.
The Economic and Social Survey of Asia and the Pacific 2017 highlighted the importance of effective governance and fiscal management, given the high demands on fiscal policy to address the diverse challenges to sustainable development.
For instance, economic expansion has been accompanied by rising income inequality with inadequate creation of decent jobs in the region, which trails the world in social protection coverage. Developing Asia-Pacific economies also use twice as many resources per dollar of GDP as the rest of the world.
To address these challenges, the survey called for effective governance, in particular a proactive fiscal policy through productive investments in such areas as infrastructure, social protection and resource efficiency.
Effective governance can for example, improve health outcomes in the Pacific, promote economic diversification in North and Central Asia and the creation of decent jobs in South and South-West Asia, reduce development gaps in South-East Asia and accelerate ecological innovation in East and North-East Asia.
According to the survey, the region’s developing economies are projected to grow at 5.0 and 5.1 percent in 2017 and 2018, respectively, up from 4.9 percent last year.
Economic conditions are broadly stable in China and higher value-added sectors are gradually replacing excess capacity sectors as drivers of output and employment.
The continued softening of economic growth in China, projected at 6.5 percent in 2017 against 6.7 percent in 2016, reflects ongoing deleveraging and restructuring efforts to boost output in the medium term. Growth in India is forecast at 7.1 percent this year as re-monetisation restores consumption, and infrastructure spending increases. Relatively higher oil prices are projected to lift economic growth in the Russian Federation by 1.1 percent in 2017 after last year’s contraction of 0.2 percent.
Launching the Survey in Bangkok, United Nations Under-Secretary-General and ESCAP Executive Secretary DrShamshadAkhtaremphasised that better governance for effective mobilisation and use of fiscal resources is critical to advancing the 2030 Agenda for Sustainable Development.
“As we enter the second year of the 2030 Agenda, economic growth in Asia-Pacific economies is steady but modest amid prolonged weak external demand and rising trade protectionism. Future economic growth will need to rely more on productivity gains, compared to factor accumulation,” DrAkhtar said.
“Sustained productivity gains, in turn, will require effective institutions and better governance, in both public and private spheres,” she added. “In addition to ensuring sustained and robust economic growth, policymakers will need to address social and environmental challenges in order to improve the quality of this growth.”
