Policy Statement - 65th Commission Session

Mr. Chairperson
Honorable Ministers
Distinguished Delegates
Ladies and Gentlemen

We have come together at a time of great challenges. The region faces some of the largest development threats of our time. From climate change, extreme food fuel volatility in 2008, to the worst financial-economic crises since the Great Depression – all of which could roll back our development gains and precipitate a human tragedy in many parts of our region. This is the time to use our collective strengths as Asia Pacific to prevent this emergency from happening. So allow me to first take stock of the challenges facing us and address the policy responses which could make a difference.

CHALLENGES

The Financial Crisis

What started as a financial crises in the West, has became an economic crisis in the East. The Asia Pacific region had initially shown remarkable resilience to this crisis due to the financial reforms post 1997. However, this resilience is under severe pressure with declines in investment and consumption in the global market. The World Trade Organization (WTO) predicts that global trade will shrink by 9 per cent in 2009. This is the most serious decline since World War Two. This year’s “Economic and Social Survey of the Asia Pacific” produced by ESCAP, estimates that growth of developing members will fall from 5.8 per cent in 2008 to an estimated 3.0 per cent in 2009. Our developed economies are now projected to contract by minus 3 per cent during this same period. As many as 23 million people, particularly women employed in the manufacturing sector could lose their jobs; remittances from migrant workers are falling and millions will experience rising income insecurity. The Asian Development Bank estimates that the number of poor in the region could increase by an additional 60 million people in 2009 and approach 100 million by 2010, affecting the achievement of the Millennium Development Goals in Asia Pacific.

Food – Fuel Security Issues

For millions across our region the economic crisis has become a food crisis as unemployment rises, incomes fall and price of food remains high. Despite our region’s enormous capacity to produce food, we are home to the largest number of food insecure people in the world. ESCAP’s 2009 theme study “Sustainable Agriculture and Food Security” identifies 25 countries that are considered food insecurity hotspots for our region. The Asia Pacific contains more than 64 per cent of the worlds’ undernourished adults and children. These numbers underline the fact that our region is one of great disparities. These development challenges must be overcome if we are to realize our full potential.

Poverty is the primary cause of food insecurity in our region. However other factors are also at work. Protectionist trade policies can drive up food prices, making it difficult for the poor to access food. Declines in farm revenue and increased costs of production are forcing small scale farmers out of business. Increasingly the young in rural areas are migrating, leaving the old behind as agriculture becomes an unviable option. Last year’s fuel-food crises underlined the linkages between fossil fuels and food production. These have not gone away. Least developed and many landlocked countries, together with small island developing states are almost totally dependent on imported oil and gas. This dependency complicates their ability to recover from the current economic crisis.

Climate Change

In Asia-Pacific, climate change is no longer a distant threat; it is a reality and a sign of what lies ahead. For many of our Pacific and Small Island States, it is a question of their survival or extinction. Higher temperatures are causing sea levels to rise increasing the frequency of storms and cyclones. These, in turn, cause a greater number of floods, landslides and erosion, destroying business, property and infrastructure. Other visible effects of climate change include water shortages, reduced agricultural productivity, forest fires and increased prevalence of diseases and viruses. All are likely to have devastating effects; particularly on the poor. This region is currently responsible for 34 per cent of greenhouse gas emissions. It is also the home to 7 out of the 15 major global greenhouse gas emitting countries. This region also suffers from the largest number of human casualties from natural disasters in the world. In fact, it accounted for 80 per cent of disaster related global casualties in the last decade.

PROPOSED POLICY ACTIONS

The convergence and scale of the challenges I have described reflect the profound need to respond with systemic changes and deeper reforms. The Bali Outcome document and subsequent analysis of the 2009 “Economic and Social Survey for the Asia Pacific” promote the idea that economic recovery should be based upon a more inclusive and sustainable development paradigm. Fiscal stimulus packages and policy reforms provide an excellent opportunity for this. The G20’s commitment of US$ 300 billion in aid provides the funds. Partnerships including with governments, business and civil society will also provide the additional resources and know how. So let me now outline three policy responses that can guide the way forward.

1. Increasing economic growth through regional trade and integration

Asia-Pacific is more economically integrated with rest of world than with itself. Intraregional trade accounts for only 37 per cent of exports in our region in comparison with NAFTA at 51 per cent and the E.U at 68 per cent. There are enormous opportunities for growth in South-South trade and investment but existing trade barriers, tariff and non tariff, need to be removed. Accelerated implementation of the numerous regional economic partnership agreements will also promote further trade and investment. ESCAP’s, “Navigating Out Of The Crisis: A Trade Led Recovery” provides guidance for policy makers. Early conclusion of the Doha Round in accordance with its development mandate will also be essential. According to the World Trade Organization its completion would be equivalent to a global stimulus package of over US 150 billion dollars.

In practical terms, trade will also be improved through increased investments in sustainable transportation and ICT connectivity. Closing the ICT divide and strengthening the Asian Highway and the Trans Asian Railway Networks are vital components for regional trade and integration.

2. Strengthening The Foundation For Social Protection

Building the foundations for better social security in the region will also mitigate impacts from current and future crises. This will require providing minimum wage and unemployment insurance to buffer people against financial uncertainties. In a region where life spans are increasing and 30 per cent of our elderly receive support, pensions will play an important role. Currently only 20 per cent of our population have access to health care. Access to health care insurance is, therefore, critical. Establishing agricultural insurance, regional food banks, and food for work will also ensure a food secure population.

Social protection systems not only create the social foundations for more inclusive and harmonious societies, they also make good economic sense. By increasing income security, the spending power of middle and lower income people is freed up, thus increasing domestic demand and macroeconomic stability.

3. Promoting Sustainability

Action on climate change cannot wait, and people are calling for action now. Otherwise, future generations will look back on us and ask us what we did and why it took us so long to act. We need a new sense of urgency and a new sense of responsibility. A responsibility to protect not only today’s economy but also to prepare for the economy of the future. We must be responsible in how we use the earth’s resources. The earth’s gifts which we take for granted are not guaranteed.

So far, the talk about the economic impact or cost of climate change has mainly been of the potential threat. Yet, we should also look for the opportunity for new growth, for innovation, and for a modern economy based upon green growth, energy efficiency and increased use of renewable energy. If climate change is the challenge of our generation, it also presents the opportunity of our generation. Opportunity or threat, this is a problem that we need to solve together.

If we engage the climate challenge as an opportunity, we will be able to turn the climate crisis into new economic possibilities that advance sustainable development and encourage green technologies, green industries and green jobs and also mainstream disaster risk reduction into development strategies. In this, we need partnerships between public and private sectors as well as civil society to bring about a paradigm shift not only in policies but also in behaviour.

Excellencies, Distinguished Delegates

ESCAP is becoming a strategic regional player that can effectively support our Member States in shaping a more balanced and inclusive approach to sustainable development. As your secretariat, and as chair of the United Nation’s regional coordination mechanism, we stand ready to facilitate the coordination of the development policy responses outlined. Their successful implementation will pave the way for a more economically, socially and ecologically balanced and inclusive Asia Pacific where people can live free from want, from fear, and from discrimination.

I seek your guidance and a reaffirmation of your commitment to this, your Commission, as Asia Pacific takes its place as a significant force in the global arena.

I thank you.