Through inclusive policies:

Asia Pacific region should boost internal demand

Sanjeevi JAYASURIYA

The Asia-Pacific region should boost internal demand by lifting millions out of poverty through inclusive policies to sustain dynamic growth. The region needs to enhance connectivity to create a seamless and region-wide market, Economic and Social Commission for Asia and the Pacific Bangkok Economic Affairs Officer Dr Muhammed Hussain Malik said.

The key concerns for the region are liquidity injection in the developed world resulting in capital flows and asset bubbles. There is sluggish demand in major developed country markets due to growth slowing down. These could be negated with enhanced intra-region market development, he said.

The global food and commodity prices increase will affect up to 42 million poor and there will be five years delay in reaching the Millennium Development Goals (MDGs). The Japanese disaster, one of a host of natural disasters will also impact the region.

The region should deploy multi level policies to combat price rises including building buffer stocks, strengthening public distribution systems and social protection for poor. There is a need to reverse the neglected agriculture and look more at the supply side policies as demand side policies have limitations, he said.

It is an important move to set up regional food banks and South-South cooperation in agricultural research and development. The global food price volatility could be over come by regulating commodity markets and disciplined conversion of food in to bio-fuels. The oil price volatility could be minimized by agreeing to benchmark oil prices and strategic action and G20 should play a major role in this regard, he said.

The exporting countries need to take better advantage of the growing demand in major regional countries as regional economic integration can narrow the region's development gap through trade.

There is larger potential for increasing intra-regional trade. But, trade can not flow seamlessly without proper connectivity in infrastructure and institutions. Asia Pacific transport links needs to be evenly developed lowering the trade cost by improving connectivity to boost trade, Dr Malik said.