Asia-Pacific countries ask UN to lead development of regional financial architecture

The regional arm of the United Nations in Asia and the Pacific has been asked to take a leading role in supporting the development of a regional financial architecture, including the creation of a regional crisis management mechanism.

This was one of the outcomes of a meeting - held by the UN Economic and Social Commission for Asia and the Pacific (ESCAP) - which concluded in Bangkok today.

The three-day meeting of the Committee on Macroeconomic Policy, Poverty Reduction and Inclusive Development focused on the effects of the global financial and economic crisis on efforts to reduce poverty and promote inclusive development.

Representatives from countries across the region also requested ESCAP to oversee translating initiatives by major international economic forums - such as the G20 Summits and the UN Conference on the Financial Crisis held in June in New York - into concrete, regional-level policy recommendations.

At the national level, the Committee noted that in order to mitigate the effects of the current and future economic crises, domestic demand would need to be sustained by increasing income security for the poor. It recommended the development of physical infrastructure, particularly in rural areas, investment in education, health and other social sectors and, above all, the development of social protection systems.

“The region has to develop new sources or engines of growth to sustain its dynamism as the demand in the West will continue to remain weak, especially in view of the fact that credit-supported consumption is likely to be restrained as a result of efforts to narrow the global imbalances,” said Nagesh Kumar, Chief of ESCAP’s Macroeconomic Policy and Development Division.

The Committee recommended that South-South cooperation and triangular development cooperation – involving developed, developing and least developed countries - be promoted as effective tools for enhancing financial and technical assistance for countries with special needs in the region.

“A number of initiatives have been taken over the past decade in the direction of regional cooperation in Asia and the Pacific,” said Mr. Kumar. “These include a number of foreign trade agreements and comprehensive economic partnership arrangements. These arrangements need to be deepened and broadened to create a larger unified market.” During the session, representatives examined the effect of the economic crisis on achieving the Millennium Development Goals; programmes to assist least developed countries; and progress towards strengthening the Centre for Alleviation of Poverty through Secondary Crops’ Development in Asia and the Pacific (CAPSA), an ESCAP subsidiary body based in Bogor, Indonesia.