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The world has looked up to the Asia-Pacific region for its economic success in the past decades. Rising inequality may have been tolerable due to high economic growth, as it reflected incentives for individuals and firms to save, invest, innovate and work hard, especially for the countries that were relatively poor. However, when countries move up the socioeconomic status, too much inequality and too little intergenerational mobility could harm long-term economic growth and lead to political and social instability. It is not yet too late to take actions to reverse such trends. Governments should take a proactive role in levelling the playing field in opportunities for individuals and families for now and in the future, and limit the scarring effects when crises occur. Such measures include universal provision of social assistance, social protection and other basic public services, provision and protection of decent work, and adoption of redistributive policies and progressive taxation, with a focus on the most vulnerable groups, such as women and the youth. It’s time to form a “new social contract” between governments, businesses and individuals to build a fairer tomorrow.

 

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Macroeconomic Policy and Financing for Development Division +66 2 288-1234 [email protected]