Excellencies, distinguished participants, ladies and gentlemen,
Welcome to the ESCAP Expert Group Meeting on economic policies for an inclusive post-pandemic recovery and development.
Nearly two years since the outbreak of COVID-19, the global development policy agenda is increasingly focused on equity concerns as the pandemic has exposed deep-rooted social and economic vulnerabilities.
In the Asia-Pacific region, ESCAP estimates that nearly 90 million people have been pushed back into extreme poverty by COVID-19.
ESCAP estimates show that while developing economies in Asia and the Pacific have rebounded from the worst in 2021, the scarring effects of the pandemic on employment, productivity, education, poverty and inequality are setbacks to the 2030 agenda for Sustainable Development.
In his July 2020 Nelson Mandela lecture, the United Nations Secretary-General identified COVID-19 as the “inequality pandemic” and emphasized the urgent need for a “New Social Contract.”
Also, the declaration from the G20 Rome Summit in October calls for greater attention to the needs of the vulnerable during the global recovery with the goal of reducing inequalities.
Following this, next year’s G20 Presidency under Indonesia will focus on ‘people’ among the three pillars of people, planet and prosperity supporting the 2030 Agenda.
Even before the pandemic, the region was lagging in its progress towards the Sustainable Development Goals. Its ability to meet the 2030 Agenda deadline, less than a decade away, is now at even greater risk.
While the Asia-Pacific region has witnessed impressive growth over the past few decades, this growth has not been sufficiently inclusive.
Along with the recent increases in poverty, the lack of inclusiveness will constrain the region’s future economic and development prospects. Achieving a faster and more resilient recovery requires placing inclusiveness at the centre of post-pandemic economic and social policies.
It is, therefore, timely that this meeting will review the challenges before us in ensuring that the post-pandemic recovery and development in Asia and the Pacific are inclusive.
The outcome of your deliberations will inform ESCAP policy recommendations to member States, to be outlined in the 2022 edition of its annual flagship publication, Economic and Social Survey of Asia and the Pacific.
The Survey will analyze the role of fiscal, monetary/financial and structural policies in enhancing inclusiveness, keeping in view the considerable impacts of COVID-19 on inclusiveness and inequality.
Reducing extreme poverty does not necessarily go hand in hand with reducing inequality. On the contrary, a decrease in poverty has often been associated with increased inequality.
ESCAP estimates that high levels of inequality are affecting the majority of people in the region and this impact is not declining.
We stress the importance of fiscal policies as these are key to reducing inequality. However, the reduced fiscal space due to stepped up public spending and increased government debt to fight the pandemic may force many countries to move towards austerity.
ESCAP analysis shows that fiscal consolidations increase inequality, a phenomenon that would be hard to reverse later.
With consolidations predicted for the medium-term, fiscal policy may need to be more targeted and efficient to make the best use of available resources.
ESCAP findings reaffirm that investments in education, health and direct transfers have a significant impact on inequality reduction but also caution that government support often does not go to the neediest, while efficiency in government spending still leaves room for improvement.
Given the fiscal constraints, it is time to consider the significant potential of monetary and financial policies in supporting inclusive development. Studies suggest that monetary policy affects inequality in Asia and the Pacific.
Central banks should also be interested in fostering inclusive development because inequality could affect monetary policy effectiveness and outcomes. Indeed, many central banks have directly contributed to inclusive finance by increasing financial education and strengthening financial consumer protection.
Yet, there remains room for central banks to redirect some of their traditional functions, such as official reserve management, towards inclusive development.
The ESCAP Survey 2022 will also explore the role of social finance, highlighting how social impact bonds and sustainability-linked debts may help channel private capital into social investment and promote inclusive development.
Prevention is always better than the cure, and a core driver of inequality is the economic structure itself. The region has shown that “growing-with-equity” is possible with an inclusiveness-oriented structural transformation focused on quality job creation for the majority while boosting economic productivity.
The COVID-19 pandemic has also created a generational opportunity to build a more equal and sustainable world. This is an opportunity that we cannot waste.
Efforts in Asia and the Pacific towards an inclusive future must be based on a New Social Contract that creates equal opportunities for all.
I wish you success in your deliberations over these three days to help forge a policy agenda that will inform regional c efforts towards building fairer economies and societies.
Thank you very much.