Amid continued uncertainty about the trajectory of the COVID-19 pandemic and rising global risks, the region’s economic recovery and progress must be anchored in “a new social contract” of inclusiveness to protect vulnerable people from future shocks, according to the Economic and Social Study of Asia and the Pacific for 2022, released today by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
In addition to the pandemic, the report shows that regional economies face several risks related to supply constraints, rising inflationary pressures, prospects for higher interest rates, shrinking fiscal space and Emerging global economic fallout from the ongoing Russian-Ukrainian conflict. Economic growth in developing Asia and the Pacific is expected to moderate to 4.5% in 2022 and 5% in 2023, from an estimated growth rate of 7.1% in 2021. The cumulative output loss due to COVID-19 for developing economies in the region between 2020 and 2022 is estimated at nearly $2 trillion.
With shrinking fiscal space in many developing countries in the region, the Survey warns against budget cuts in health care, education and social protection in order to protect the development gains of the last decades and prevent a worsening of inequalities in the region.
The pandemic has deprived more than 820 million informal workers and more than 70 million children from low-income households in the region of adequate access to income and education. This outcome will have detrimental effects on the future earning potential of these individuals and on overall productivity growth. An additional 85 million people in Asia and the Pacific had already been pushed back into extreme poverty by 2021.
“As developing countries in the region move forward to learn to live with COVID-19, balancing public health protection and livelihoods, it is time to lay the foundations for a future. fairer equal opportunities and inclusive outcomes,” said Armida Salsiah Alisjahbana. , Under-Secretary-General of the United Nations and Executive Secretary of ESCAP.
ESCAP recommends a three-pronged policy agenda aimed at shaping an inclusive economy in Asia and the Pacific. First, instead of cuts, developing countries in the region need to direct public spending towards basic universal health coverage, push further towards universal primary and secondary education, and expand social protection coverage. “Smart” fiscal policies can improve the overall efficiency and impact of public spending and revenue collection. At the same time, new sources of revenue should be explored, such as taxing the digital economy, as well as shifting the tax burden to the better off.
Second, the 2022 Survey argues that central banks in the region can and should direct their traditional monetary policy towards promoting inclusive development. While remaining focused on keeping inflation low and stable, central banks can invest some of their official reserves in social bonds, explore how a central bank digital currency can improve financial access, and incentivize financial instruments. more innovative financiers for social purposes.
Third, governments can also proactively guide, shape and manage the process of structural economic transformation, which is increasingly driven by the digital robotics and AI revolution, for more inclusive outcomes. This includes support for the development of labour-intensive technologies, inclusive access to quality education, reskilling, building labor negotiation skills and social protection floors.
First produced in 1947, the Economic and Social Study of Asia and the Pacific is the oldest and most comprehensive annual socio-economic study by the United Nations informing policy-making in the region. This year Survey analyzed the importance of effective government actions and the role of fiscal, monetary and structural policies in enhancing inclusion, bearing in mind the far-reaching negative effects of COVID-19 on poverty and inequality.
Access the full report: https://reliefweb.int/node/3837145/
For multimedia documents related to the Survey: https://trello.com/c/Fzc7w8r1
Communications and Knowledge Management Section
+66 2288 1869