report “Build forward plus fair”, calls for a new social contract for Asia and the Pacific |
In addition to the pandemic, the report shows that regional economies face “several downside risks”, GETAWAY said in a press releaselinked to the failing global supply chain,”rising inflationary pressures, prospects for higher interest rates, shrinking fiscal space,” and the emglobal economic fallout from Russia’s continued invasion of Ukraine.
Economic growth in developing countries across the wider region is expected to fall to 4.5% in 2022 and 5% in 2023, compared to an estimated growth rate of 7.1% in 2021.
$2 trillion in losses
The cumulative power loss due to COVID-19[feminine] for developing economies in the region between 2020 and today is estimated at nearly $2 trillion.
The survey warns against cuts in public spending on health, education and social protection “to protect the development gains of the past decades and prevent a worsening of inequalities in the region”.
The pandemic has deprived more than 820 million informal workers in the ESCAP region and more than 70 million children from low-income households of adequate access to income and education, the report notes.
“This outcome will have adverse effects on the future earning potential of these people and on overall productivity growth,” ESCAP said, as an additional 85 million people in Asia and the Pacific had already been pushed back into the extreme poverty in 2021.
“As developing countries in the region make progress in learning to live with COVID-19, balancing the protection of public health and livelihoods, it’s time to lay the foundations for a fairer future of equal opportunity and inclusive outcomessaid Armida Salsiah Alisjahbana, Executive Secretary of ESCAP.
Three-point action plan
The Commission recommends a “three-pronged policy agenda” aimed at shaping an inclusive economy for the region.
First, instead of reductions, develop countries in the region should direct public spending towards universal basic health coveragepushing further towards universal primary and secondary education and expanding social protection coverage.
The committee argues that “smart” fiscal policies can improve the overall efficiency and impact of public spending and revenue collection. At the same time, new sources of income should be explored, such as tax the digital economywhile shifting the tax burden to higher income households.
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 part of official reserves in social bonds, explore how a central bank digital currency can improve financial accessand encouraging more innovative financial instruments to guarantee a social safety net.
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.
The Economic and Social Survey of Asia and the Pacific is the oldest and most comprehensive annual socio-economic survey of the United Nations that informs policy-making in the region, first published in 1947.