The Asia-Pacific region continues to face a deeply challenging external environment. The V-shaped recovery from the depths of the 2008-2009 global financial crisis in 2010 proved to be short-lived, as the world economy entered the second stage of the crisis in 2011, due to euro zone debt concerns and the continued uncertain outlook for the United States economy. The region will be affected by slackening demand for its exports and higher costs of capital, as well as by loose monetary policies and trade protection measures of some advanced economies.
Despite the slowdown, Asia and the Pacific remains the fastest growing region globally. It also serves as an anchor of stability and has emerged as a growth pole for the world economy. South-South trade with Asia and the Pacific in 2012 will help other developing regions, such as Africa and Latin America, further reduce their dependence on low-growth developed economies.
Another key challenge for the Asia-Pacific region is volatile and high commodity prices, which are likely to become the “new normal” of the global economy. The commodity boom presents risks as well as opportunities. Price shifts will change incentives, but the cautionary message is that less-developed economies should resist the impulse towards commodity specialization, which, in turn, can delay industrialization and economic diversification.
The 2012 edition of the oldest and most comprehensive annual review of development in this vast and diverse region, the Economic and Social Survey of Asia and the Pacific highlights critical challenges and options for policymakers. These include the need to better manage the balance between growth and inflation; coping with capital flows and exchange rate volatility; addressing jobless growth and unemployment; and tackling serious and growing inequalities.
Turbulence and volatility generate uncertainty. In these challenging times, the Survey 2012 can serve as a important resource to achieve more resilient, inclusive and sustainable development for Asia and the Pacific.