Won’t be unscathed from the current crises:
Asia-Pacific can emerge stronger
Dr. Noeleen HEYZER
It would be difficult enough for the Asia-Pacific region, or any
region for that matter, to deal with the fallout of just one global
crisis. Yet, our region now finds itself dealing with three major global
crises: a Great Recession, food and fuel price volatility and a range of
climate change calamities.
There is a real need to strengthening social policies to
create more resilient societies better able to face economic
volatility in the Asia-Pacific. |
These three crises converged in 2008. How they are dealt with in 2009
will influence the future path of development in the Asia-Pacific
region, and through that, the lives of billions of its peoples.
ESCAP’s Economic & Social Survey of Asia and the Pacific 2009
provides groundbreaking analysis of regional trends which should assist
policy makers identify solutions.
The repeated and brutal downward revisions of economic forecasts have
confounded all but a few of the most seasoned analysts. Estimates of
wealth wiped off balance sheets run into trillions and even tens of
trillions of dollars.
FINANCIAL CRISIS
The Survey’s results paint a mixed picture. On one hand, developing
countries in the region have shown that they are better prepared than in
1997 when the last financial crisis hit.
Over the past decade, their regulatory reforms in the financial
sector, combined with cautious macroeconomic management policies, have
built a protective buffer of foreign exchange reserves.
On the other, despite the impressive economic growth experienced over
the last decade, inequalities between rich and poor have worsened in the
Asia-Pacific. This has brought to the fore vulnerabilities for which
forward planning and policy action will be essential.
During the first part of 2008, crude oil prices soared to record
levels and food commodity prices increased to the highest levels in over
20 years. This caused alarm amongst the developing countries of our
region because of the disproportionate adverse impact on the poor.
IMPACT
The impact was particularly severe as the price of the region’s main
staple food, rice, increased by a staggering 150 per cent in only four
months.
Then, by early September, it was clear that the growing financial
crisis would be particularly damaging given the region’s heavy reliance
on exports to industrial countries for growth.
As a result, 24 million people in Asia and the Pacific are in danger
of losing their jobs, with women and youth disproportionately affected -
and this is aggravated by an increase in the number of undernourished to
583 million in 2007, up from 542 million in 2003-2005.
A worsening of the state of poverty and hunger in the region is now
impossible to avoid and yet basic social protection programme coverage
is low in the Asia-Pacific. It is estimated that only 30% of the elderly
receive pensions and 20% of the population has access to health-care
assistance.
These statistics suggest that there is a real need to strengthening
social policies in order to create more resilient societies better able
to face economic volatility. The provision of minimum wages,
unemployment insurance and expansion of other social protection schemes
will help bolster domestic demand during times of uncertainty.
These social support systems need to be implemented as part of a
development framework that helps create longer term macro-economic
stability for the region.
These food/fuel and economic crises are problematic enough on their
own, but the third global crisis of climate change threatens to have
even more fundamental, long term consequences.
Natural disasters, often associated with climate change stresses,
struck with particular intensity in 2008. The number of deaths in the
region reached 232,500 persons, accounting for a staggering 97.5 per
cent of such fatalities worldwide.
One of the deadliest storms ever, Cyclone Nargis, left a
heart-wrenching trail of death and destruction in Myanmar: 84,500 people
dead and 53,000 missing.
Australia’s “big dry,” the worst drought in more than 100 years,
entered its seventh year with fires causing devastation in the country’s
south-east.
UN studies have shown that there is a direct correlation between
poverty and vulnerability to disasters. As the numbers of poor increase
in our region, so too will the number of people at risk.
Although all attention is now focused on fighting the economic
crisis, addressing food and fuel security issues in combination with
climate change is not necessarily a contradiction in policy objectives.
DEPENDENCY
The Global Green New Deal promoted by UN Secretary-General Ban Ki-moon
is based on the premise that investing in the green economy can generate
millions of jobs while addressing the challenges associated with
reducing carbon dependency, protecting ecosystems and preserving water
resources.
There is untapped potential for developing countries in the region to
cooperate in developing affordable climate-friendly technologies the
promote energy efficiency and diversify energy sources to include
renewables.
Putting in place the appropriate financial incentives and regulatory
frameworks regionally will help to secure energy supplies and speed up
the transition to a low-carbon energy systems.
Further development and implementation of the ESCAP framework on
renewable and sustainable energy should be given priority. The region
should also play a more influential role in the multilateral processes
that are reforming the global architecture on finance, trade rules as
well as climate change.
The converging crises can be used to jump-start a regional
reorientation towards a more inclusive and sustainable development path.
Some countries in the Asia-Pacific are in a stronger position to help
not only themselves but also others to smooth the impact of the crises
and strengthen regional solidarity.
ESCAP’s Survey, to be launched globally on March 26, emphasizes the
importance of regional cooperation to develop long term solutions.
The writer is UN Under-Secretary-General and the Executive Secretary
of the United Nations Economic and Social Commission for Asia and the
Pacific. |