High-level Policy Dialogue “Macroeconomic Policies for Sustainable Growth with Equity in East Asia”
Development in Asia is being increasingly impacted as the global economy remains mired in the Great Recession. China and India, which proved resilient in the early part of the crisis, have also slowed markedly. Although countries in East Asia have been relatively resilient, with Indonesia sustaining high growth at above the pre-crisis trend, job growth is seen to be on the wane, with 7 out of 10 countries in a recent regional sample exhibiting a fall in the pace of jobs created as compared to 2011.The impact of slower income growth on poverty reduction is also significant, with ESCAP estimating some 13.7 million people in the region being affected on a poverty line of $2-a-day.
While overall inflation is moderating in many economies, rising or high food and fuel price rises remain a concern. A further spur to domestic prices from outside the region has been to financial asset markets, such as equities and property, partly due to the loose monetary policy measures taken by developed countries. Amid consistent pressure on asset markets and exchange rates from foreign investors looking for higher returns, capital controls and other macro-prudential policy measures have gained popularity among policy makers.
In addition to the external headwinds, sustainable growth in the region has been constrained by structural impediments, as reflected in rising levels of inequality and lack of investment in areas such as infrastructure and the agricultural sector, which has led to reduced economic opportunities for the poor, environmental stress and lack of food security. In spite of significant progress in recent years, including through extending the provision of basic healthcare access and income support to poor workers and households, large gaps remain in the social protection regimes.
In light of the above challenges, the ESCAP-Bank Indonesia High-level Policy Dialogue for East Asia will provide an important and timely platform for the sharing of experiences and exchange of views among economic policy makers from across the region. It is expected that this meeting will not only help enhance the understanding of the current challenges but also foster a shared vision and strengthen regional cooperation with a view to rendering the region more resilient to future shocks and better positioned for inclusive growth.