Economic and Social Survey of Asia and the Pacific 2003: Asia-Pacific economies: resilience in challenging times

Flagship20 Mar 2003

Despite the weakening of the global economy for a large part of 2002, developing economies in the ESCAP region performed surprisingly well, achieving growth of around 5 per cent during the year. This expansion, which was 2 percentage points higher than the 2001 rate, owed much to surging intraregional trade, fiscal stimulus and monetary easing.

The developing economies of the ESCAP region could expect a modest improvement in 2003, barring a major eruption of geopolitical hostilities. The prospects for development also depend to a considerable extent on the sustainability of enhanced intraregional trade and a supportive domestic policy stance. All in all, however, GDP growth in the region is still several percentage points below the pre-crisis level. This translates into fewer job opportunities and puts greater pressure on government budgets, including allocations for poverty reduction.

The positive impact of education and health care on the economic development and well-being of individuals is enormous. Moreover, the provision of education and health care is key to reducing poverty in developing countries. While the public sector is still a major provider of education and health care, more resources should be raised using multiple channels, including the public and private sectors, communities, non-governmental organizations, bilateral donors and multilateral organizations. An integrative approach using multiple sources for the provision of education and health care is recommended. Moreover, the effective and efficient utilization of resources is also important to achieve better results.

The achievement of fast economic growth, which is essential for sustainable poverty reduction, is often accompanied by environmental degradation. This affects the poor adversely and disproportionately. An analysis of the linkages between the environment and poverty and the policies adopted by the Asian and Pacific countries to mitigate their adverse impacts yields important conclusions regarding stakeholder ownership, decentralization and the maintenance of good governance for increasing the effectiveness of those policies.