CS73: Policy Statement at Opening of the Ministerial Segment

Delivered at the opening of the Ministerial Segment of the 73rd Session of the Economic and Social Commission for Asia and the Pacific in Bangkok, Thailand.

Linking the Global Agenda to National Implementation - ESCAP’s Regional Cooperation to support the 2030 Agenda

Excellencies,
Distinguished Delegates,
Ladies and Gentlemen,

Welcome to the 73rd session of the Economic and Social Commission for Asia and the Pacific.

2017 marks ESCAP's 70th anniversary. This milestone gives us a rare opportunity for reflection. Seventy years ago, ours was a region devastated by conflict. Many of our people were still subjugated by colonial empires. China was in the grip of civil war. The Indian subcontinent was undergoing its transition to independence and partition. A long-fought struggle for self-determination had begun in South East Asia. Political instability was rife, poverty and famine endemic, and social tensions widespread.

But even then, there was a clear sense of better times ahead. Speaking at the Asian Relations Conference in 1947, the Indian Prime Minister Jawaharlal Nehru spoke of "the end of an era" and "the threshold of a new period of history" for the region. Our growth story since bears testimony to the resilience, ingenuity and hard work of ordinary men and women across Asia and the Pacific. Collectively, we have shifted the world's center of economic gravity eastward. Our region now accounts for over a third of the world's output. We are driving global growth, global trade and increasingly, science, technology and innovation. Forty-four per cent of the world's R&D investment originates from five large economies in our region which lead in South-South Cooperation. We are home to 61 per cent of the world's foreign exchange reserves, and are a favored destination for foreign direct investment. Our urbanization is proceeding at a breakneck speed, while agriculture's share in our economies is declining, as manufacturing and service industries expand and diversify. Above all, we have drastically reduced poverty. In 2012 poverty in the region has fallen to 15 per cent of the population – undeniably too high but down from the highs of fifty per cent in 1990s. Poverty reduction is being driven by countries in East Asia. It's time for South Asia and the Pacific to take the lead.

During these seventy transformative years, ESCAP has prided itself on having been the trusted partner of all its member States. The institution has continuously reformed and reinvented itself to serve the emerging needs and requirements of the region. It has offered an inclusive platform dedicated to finding multilateral solutions to regional problems. ESCAP's normative work has helped forge treaties, agreements and standards. Our solid analytical work has offered insights into emerging challenges and opportunities. And our technical cooperation programs have provided policy advice and capacity building. Through this Commission you established the Asian Development Bank, you laid the foundations of the Asian Highway and Trans Asian Railways networks, and promoted intra-regional trade at every opportunity. ESCAP's pioneering social development work meant we were the first region to adopt a framework for action on disabilities – the "MDGs for persons with disabilities".

We need to build on diversity and strengths of our different subregions. Global governance and international cooperation must work to meet the demands of countries with special needs. In particular we must lend a voice to the small island States that are on the frontlines of climate change. These countries are shouldering a disproportionate burden of the costs from greenhouse gas emissions which are generated elsewhere. We need to assist them to build resilience to climate induced natural disasters and work collaboratively for better management of oceans and their resources. Least Developed Countries need to expand productive capacities and increase their levels of social and economic development, while Landlocked Developed Countries need to become more "land-linked" to better engage with the global economy.

As we progressed on normative and analytical work, we have built on these proud achievements with unwavering commitment to UN principles. Through multilateralism, we have promoted inclusiveness and openness. These principles are still pertinent today but we need to deal with the growing inequalities, vulnerabilities, financial excesses and the continued denial of the basic rights and services of many of our citizens. For us to rebuild trust in the international system, we must redouble our multilateral efforts to create shared benefits, delivered through balanced, sustainable development.

Asia and the Pacific is on track to make up half of global GDP by 2050 and regain the share of global output we enjoyed two hundred years ago. China has already overtaken the US in 2014 to become the largest economy in purchasing power parity. It is expected to overtake the US in market exchange rate terms by 2030. India has the potential to become the second largest economy in the world by 2050 in PPP terms. Studies point to Vietnam, India and Bangladesh as having the potential to be the fastest growing economies in the next thirty years. Average incomes in our emerging economies should close a significant amount of the gap with developed economies by 2050.

Asia's growing leadership in global governance was further confirmed just a few days ago in Beijing at the Belt and Road Initiative Summit. World leaders gathered at the summit to discuss this transcontinental plan that will connect China's to the world, and kick-start trade and industrial development. Other ambitious plans have also been put forward in Asia including the Republic of Korea's Eurasia Initiative and Japan's Free and Open Indo-Pacific Strategy. These are integral to ESCAP's regional cooperation mandate.

But fulfilling Asia's potential will require a careful adjustment of our growth strategy, delivering against the SDGs through greater economic integration and intraregional trade. We will need to redouble our efforts to increase productivity; improve the quality of governance in public and private sectors; strengthen and diversify our financial system to support trade and investment; and continue to promote technological innovation while working to improve the quality of education and training available for our children and our workforce. Our focus must shift to the quality of growth to reduce inequalities and overcome environmental and climate related challenges.

Before considering how we build on past achievements to deliver these goals, let me share some insights on the regional outlook.

Asia and the Pacific is poised to grow by 5.1 per cent in 2018, and although lower than pre-global crisis trends, growth has stabilized. But global dynamics are changing as nationalism is nurturing a mistrust of globalization and driving myopic protectionism in many of our export markets. If the global uncertainty which flows out of these trends does not abate, this could carry significant implications for our region. For major developing countries of our region, if global uncertainties grow, growth could be 1.2 percentage points lower than baseline projections. Our Region has however categorically reiterated its commitment to promoting free trade, investment and greater liberalization. Our leaders are saying no to protectionism which in the words of Mr. Putin would "slow down the recovery of the global economy".

The region's economic outlook continues to depend on steady rebalancing and restructuring of China's economy. To quote the IMF, a transition that is good for China is good for the world. But the outlook also depends on exploiting the untapped potential of South Asia, and economic diversification in North and Central Asia. Strengthening of enabling policy and regulatory environment is critical for attracting robust private sector investment. Productivity gains - rather than factor accumulation - backed by stronger governance in both public and private sectors is essential. With global monetary conditions set to tighten gradually, the right mix of macro-prudential policies will be needed in the region to manage exchange rate volatilities and ensure financial and price stability. Responsible fiscal policy can and should play a more active role to boost economic growth.

More steadfast and speedy implementation of the 2030 Agenda for Sustainable Development, together with rigorous implementation of the Paris Agreement on Climate Change and the Addis Ababa Action Agenda will help Asia Pacific to confront emerging challenges and uphold its traditions of navigating exogenous shocks and turbulent times.

ESCAP is the most inclusive intergovernmental platform offering the space for consensus-building to address systemic regional challenges; cope with shared vulnerabilities and external shocks; and promote resilient infrastructure connectivity. ESCAP is truly a policy body which offers a voice to small and large countries alike to share their vision and plans for regional cooperation and integration. Our regional solutions, agreements and support for implementation of 2030 Agenda are directed to promote shared prosperity for the wellbeing of the people in the region.

Our priority is to ensure we safeguard the interest of the Countries with Special Needs and to ensure "no one is left behind." We not only support the international programs and action plans for LLDCs, LDCs and SIDs, but produce annually the Asia-Pacific Countries with Special Needs Development Report. In 2017, our focus has been "investing in infrastructure for an inclusive, sustainable future", and this builds on the analysis of the previous two years on bolstering productive capacity; and analysis of the 2030 Agenda by mapping it against ongoing action programs at the national level. A special body and panel discussion Countries with Special Needs is an integral part of the Commission.

We have institutionalized and operationalized several key overarching strategic regional forums to ensure they support implementation of two core priorities - sustainable development; and regional economic cooperation and integration. Through these platforms we promote integrated, cross-sectoral linkages and harness the means of implementation of the 2030 Agenda. These overarching platforms are reinforced by ESCAP's sectoral committee work programme. Our sectoral committees in turn have been realigned to operationalize the 2030 Agenda drawing on the multi-sectoral strengths of ESCAP to leverage cross-sector and cross-border synergies.

Allow me to elaborate further on these forums. Firstly, the Asia-Pacific Forum on Sustainable Development has evolved as a coordinating intergovernmental body. Its primary role is to define priorities and oversee the implementation of the SDGs and promote regional policy coordination, coherence, the follow up and review. Transboundary SDGs will be serviced and reinforced by the technical work underway to foster regional economic cooperation and integration, and ensure resolution of cross-border issues and development of connectivity networks in a sustainable manner. A Regional Road Map lays out priority areas, defines processes, implementation and technical cooperation arrangements to be supported by partnerships, and institutionalizes the tracking of SDG progress. An SDG Resource Facility will soon be operationalized to facilitate member States' implementation of SDGs. We count on the Commission's endorsement of this strategic forum.

Secondly, through four rounds of consultation, the Asia-Pacific High Level Dialogue on Financing for Development, has helped to deliver focused outcomes and tailored support to member States on the regional follow up of financing for development. An Eminent Expert Group on Tax Policy and Public Expenditure Management for Sustainable Development has been established to advise ESCAP and its member States on key aspects of public finance. We have built the capacities of member States to structure effective Public Private Partnerships, and assisted the development of regulatory frameworks for financial inclusion with close regard for financial stability and consumer protection. Drawing on the advice of our Eminent Expert Group and on our partnerships with the other international organizations we will ensure that our policy advice is harmonized with global and regional realities. Our important role as a regional think tank on financing for development has been reflected by the production of more than 50 financing for development think pieces since 2014.

Reinforcing both these platforms are the intergovernmental deliberations ESCAP has developed on regional economic cooperation and integration, or RECI. Our work on RECI aims to promote more integrated, sustainable and resilient connectivity while ensuring an effective balance of social, economic and environmental considerations; and focuses on implementing transboundary SDGs. This involves offering normative work on both the hard and the soft infrastructure needed to foster seamless connectivity of road, energy and ICT networks. This is complimented by steps to foster market integration through establishing simpler "rules of the game" and better coherence to the many overlapping trade and investment agreements; resisting the calls of non-tariff protectionism; finding a common approach to regional trade facilitation; while liberalizing regional labor mobility and shared vulnerabilities. We have produced 5 analytical reports on RECI, one which addresses the prospects of the entire region and 4 detailed sub-regional reports.

To maximize efficiency, with your support, the ESCAP Commission and secretariat has now been reconfigured to respond to the demands of the 2030 Agenda. Our enhanced conference structure ensures a cross-sector integrated approach, exploiting the multi-sectoral and thematic strengths as well as instituting the means of implementation hubs of ESCAP with focused outcomes. Allow me to outline six examples of areas in which we have recorded substantial progress.

First, the operationalization of the Energy Committee, supported by a new dedicated energy division, lays the foundation for regional collaboration on SDG7, which comprises targets on universal energy access, renewable energy and energy efficiency. It is somewhat ironic that the region faces an acute energy deficit despite its rich hydrocarbon and renewable energy resource potential. Our promising economic prospects imply that energy demand will increase by an estimated 60 per cent over next 25 years. However the supply response remains stifled because of inadequate energy connectivity and inadequate power grids that prevent the more even distribution of energy resources and hamper the integration of large scale renewable and clean sources.

To deliver completely on SDG7, the region has to provide electricity to 420 million unserved people, offer reliable power to industry whose productivity suffers from discontinuous supply, and to reduce further the region's energy intensity, which has already declined by 35 per cent from 1990 to 2014. Success in achieving SDG7, in particular the move to renewable energy has positive impacts on the SDGs for climate action and health.

The Energy Committee has recognized the significance of a region-wide energy transition supported by enhanced energy connectivity to meet growing demand in sustainable manner. This approach will need to be underpinned by enhanced legislative and regulatory actions to harmonize cross-border standards, and by encouraging private sector participation through a more conducive policy environment. ESCAP has been called to support the energy transition through building capacities, harmonizing regulations and standards, and pricing mechanisms.

Second, the Asia-Pacific Ministerial Conference on Transport last year adopted an integrated Regional Action Programme for Sustainable Transport Connectivity in Asia-Pacific (2017-2021) which sets a blueprint for enhancing transport connectivity to support regional integration and achieving SDGs 3, 7, 9, 11 and 13. It also provides a new impetus for achieving the vision of seamless connectivity based on quality sustainable infrastructure and supportive policy and legal frameworks. Member States have adopted a set of model agreements and logistics information systems to harmonize operational standards along regional corridors. In parallel, an interregional coordination committee on transport has been established to foster connectivity between Asia and Europe through harmonizing technical and operational standards and addressing the connectivity challenges Central Asian countries face. Work is underway to support implementation of regional goals and targets for road safety to help member States save 400,000 lives per year from road crashes in the region.

Third, the joint Committee session of STI and ICT has considered the role of these two critical elements in the frame of the SDGs. STI is a key part of SDG17. It could have a profound impact on elevating human capacities to deliver on all of the goals. This Committee endorsed the Master Plan for the Asia-Pacific Information Super Highway, offering an opportunity to build more resilient infrastructure and enable the widespread use of ICT. The Committee further agreed on convening the Asia-Pacific Innovation Forum to strengthen regional STI cooperation. With support of ESCAP's STI Advisory Board drawing on regional experts, and bringing together advanced STI institutions and subregional STI bodies, ESCAP is strengthening the STI ecosystem by ensuring the dynamic centers share new ideas, innovations and technologies to fully exploited the potential of STI for the SDGs across Asia and the Pacific. We developed a flagship publication on harnessing STI for sustainable development as the Theme Study for last year's Commission.

Fourth, the reconstituted Committee for Macroeconomic Policy, Poverty Reduction and Financing for Development has offered us an opportunity to promote sustainable financing concepts and modalities and advocated for fiscalization of SDGs with the support of ministers of finance, central bankers, the private sector and civil society from across the region, who now drive our financing for development platform. There is consensus that tax and expenditure policies must be designed to mitigate inequalities, while bridging the development divide, financing social safety nets and promoting sustainable and climate friendly investments. They must achieve this by using PPPs and deepening and diversifying capital markets to service both equity and debt demands, while encouraging institutional investors to finance infrastructure. Through our financing for development work, we will share knowledge of financial innovation such as impact investment and Fintech that has gained momentum in our region to promote inclusive finance, while keeping in perspective financial stability considerations.

Fifth, our Statistics Committee has endorsed the collective framework and action plan to support regional statistical development to tackle the gaps in statistical capacity for the SDGs.

Sixth, the Trade and Investment Committee has been molded to be supportive of SDG17. It deliberates on trends of Asia Pacific trade and investment and the issues and challenges facing the region. It promotes multilateral frameworks to support south-south regional trade agreements. More recently, it promoted the first framework agreement on cross-border paperless trade facilitation, enhanced the data availability with new online datasets, the Asia-Pacific Research and Training Network on Trade, to strengthen capacities for trade negotiations, develop national export and investment strategies. ESCAP has developed online tools to help improve analysis through SDG indicators and support of SMEs connection to international markets, with a focus on women's engagement.

ESCAP will continue to act as the regional centre devoted to strengthening the means of implementation for both the SDGs and the Addis Ababa Action Agenda. This will be accomplished by promoting expansion of trade through meaningful participation in the global trading system and the multilateral process; streamlining while deepening regional trade agreements; promoting effective investment agreements and strong SME development; enhancing participation in the digital economy by promoting paperless trade and ecommerce; and supporting innovative policy approaches to achieving the SDGs such as impact investing and social enterprise promotion. Each of these endeavors will be underpinned by the development of meaningful data and analytics to help guide policy makers in making evidenced-based policy decisions.

Sixth, ESCAP has restructured its Social Development Division to strongly support several social SDGs. Key on our platform have been the following elements:

  • The follow up on the Beijing 2020 declaration with an emphasis on enhancing the recognition of womens' rights; the need for raising the currently low womens' labor force participation; women's economic empowerment, including through entrepreneurship; and gender based budgeting, to name just a few. These offer an illustration of some of our gender work. Addressing gender equality can add at least $ 4.4 trillion to Asia-Pacific region's GDP by 2025.
  • Technical work on ageing. The share of Asia Pacific's ageing population is set to grow rapidly from 12 to 25% by 2050 with one-fifth being over 80 years and many living with disabilities. The combination of the ageing population and the 650 million people suffering from disabilities will have an impact on growth and enhance the demand for social safety nets. ESCAP is now undertaking third regional review of The Madrid International Plan of Action on Ageing (MIPAA). In 2012, to support the UN Convention on the Rights of Persons with Disabilities, we provided the world's first set of regionally agreed disability-inclusive development goals, the Incheon Strategy, that has strong links with the 2030 Agenda and we are now helping member States in implementing the Incheon Strategy and conducting the mid-term review to accelerate its implementation.
  • The Asia-Pacific is a source of 98 million migrants but it also hosts 60 million migrants. Overall, overseas migration has mobilized $279 billion in remittances, alleviating balance of payment pressures, while boosting household consumption and living standards. Generally, migrant workers work in vulnerable environments, lack social security and other fundamental rights. The region sees substantial South-South migration and is host to three of the top five refugee-hosting countries in the world – Turkey, Pakistan and the Islamic Republic of Iran. As the world comes together to fulfil the commitment made by Member States in the New York Declaration on Migrants, ESCAP will be holding a Regional Consultation for the Global Compact on Safe, Orderly and Regular Migration to assist our member States develop their regional perspective that can feed into the global negotiations.

ESCAP has launched it's the issue of the Asia Pacific Social Panorama focusing on "Sustainable Social Development in Asia and the Pacific: Towards A People-Centred Transformation". The report's policy simulations underscore that growth alone will not translate into social development unless it generates decent jobs and broader coverage of social protection, including universal education and health care. Keeping in mind the criticality of social protection, ESCAP has created the online Social Protection Toolbox to assist policy makers with an interactive tool to identify national coverage gaps and generate appropriate good practices.

In conclusion, we continue to pursue the implementation of the agenda 2030. As we do, we intend to benefit from the Secretary General's three reform initiatives. First, to improve the peace and security architecture; second to reposition the UN development system at the global, regional and country levels to address the needs of the 2030 Agenda and the Paris Agreement; third to make the United Nations more nimble, efficient and effective, while improving coordination.

Thank you for your attention.