The growing disparity in incomes and access to social opportunities in Asia-Pacific developing countries not only threatens social stability but is also a key constraint to the region’s economic dynamism, according to Survey 2014. Latest data from about 40 countries in the region show that the poorest 20 per cent of the population have less than 10 per cent of national income. Between the 1990s and 2000s, the share of the poorest fifth of the population in national income declined in Bangladesh, China, India, Indonesia, Malaysia and Turkey.
While mainly a domestic policy issue, tax revenue collection within a country can be affected by policies in other countries. A well-known example is the growing tax competition among countries to attract foreign direct investment. This is leading to a “race to the bottom” as reduced tax rates, concessions and incentives for foreign investors distort competition, placing local businesses at a disadvantage.
Growth prospects in most Asia-Pacific countries are projected to remain subdued, requiring them to step up productive and countercyclical spending, both as a short-term stimulus to the economy and to help remove long-term structural constraints to sustaining economic dynamism, according to Survey 2014. It advocates government expenditure, targeting three key impediments to growth: (i) socioeconomic inequality; (ii) infrastructure gaps in connectivity and energy; and (iii) environmental degradation and climate change.
Imagine not being able to vote in elections, obtain formal employment, use banking services or own property. What if you had no access to basic services such as healthcare and education? Millions of people in the Asia-Pacific region face these challenges every day because they have not been registered.
Drought is a creeping disaster and a silent killer. It rolls back development gains and exacerbates poverty, especially in least developed countries.
Paperless trade has revolutionized the way people do business in the Asia-Pacific region with some countries such as Singapore, saving an estimated US$1.3 billion per year in internal productivity. Gone are the days when Singaporean traders were required to submit up to 21 different forms to 23 different agencies, a process that used to take 15-20 days to complete. Nowadays, they can enjoy the efficiency of completing two electronic forms and waiting only 15 minutes to have all the necessary approvals granted.
ESCAP works to mobilize regional efforts to address poverty reduction and other socioeconomic concerns of countries with special needs, Least Developed Countries (LDCs), Land-Locked Developing Countries (LLDCs) and Small Island Developing States (SIDS), enabling greater integration into economic growth in the region.
As China’s Government initiates its long-term policy reform aiming to reduce the world’s second largest economy’s dominant reliance on exports and develop domestic demand-based growth drivers through inclusive development, other economies in the region also stand to benefit.
“Despite a slowdown in headline GDP growth in China, largely as a result of a fall in investment, an increasingly consumption-driven Chinese economy would benefit regional exporters of consumer goods through increased penetration to Chinese markets,” says the Survey.
With Asia and the Pacific showing signs of strain arising from persisting uncertainty in developed nations, it is time to reorient macroeconomic policies to address structural impediments to growth by promoting inclusive and sustainable development in a region with nearly two-thirds of the world’s poor and widening income inequalities despite rising prosperity.
Economic growth over the past decades has not translated into higher worker remuneration in the relatively richer Asia-Pacific nations, says the Survey, advocating the need for a minimum wage policy and asserting that it is also good for employers and the economy.