Next Phase Of Asia Pacific's Growth Should Be Productivity-Driven: UN

By Mohd Haikal Mohd Isa BANGKOK, April 29 (Bernama) -- The next phase of Asia Pacific's economic growth should be driven by broad-based productivity gains as nations begin implementing the 2030 Agenda for Sustainable Growth, said the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP). In its Economic and Social Survey for Asia and the Pacific, the UN said productivity growth will require higher, targeted fiscal spending, enhanced skills, better infrastructure and improved agricultural productivity. "In the developing countries of Asia and the Pacific, annual average growth of total productivity declined from 2.8 per cent in 2000-2007 to just below one per cent in 2008-2014," said the UN Under-Secretary and ESCAP Executive Secretary Dr Shamshad Akhtar in releasing the report on the survey on Thursday. The productivity slowdown accounted for almost a fifth of the recent economic slowdown, from an average of 9.4 per cent during 2005-2007 to an estimated 4.6 per cent growth in 2015. The report said sustained and resilient economic and productivity growth, backed by balanced economic, social and environmental development, is a prerequisite for successful implementation of the 2030 Agenda. Steady growth in real wages, which is critical for tackling poverty and inequality as well as supporting domestic demand, also ultimately depends on productivity growth, it said. "Concerted efforts are needed to revive the region's economic dynamism and more effectively pursue the 2030 Agenda," the report said, adding that such interventions particularly through fiscal measures could support not only domestic demand but also strengthen foundations for productivity-led growth. The survey also called for continued rebalancing towards domestic and regional demand as prospects for export-led growth remain subdued. It also highlighted that despite emerging challenges, the region's economic outlook is broadly stable, and forecast a moderate pickup in economic growth in developing Asia and the Pacific to 4.8 per cent in 2016 and 5.0 per cent next year. "ESCAP recommends that if the region is to shift to a more sustainable development strategy driven by domestic demand, greater focus must be placed on productivity along with commensurate increases in real wages," said the report. --BERNAMA