UN Report Calls For Asia-Pacific to Adopt New Social Contract of Inclusiveness

By Linda Khoo Hui Li BANGKOK, April 14 (Bernama) -- The Asia and Pacific region’s economic recovery from COVID-19 outbreak and other global risks must be anchored in “a new social contract” of inclusiveness to protect the vulnerable from future shocks, according to a United Nations (UN) survey. According to the Economic and Social Survey of Asia and the Pacific for 2022, released by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), the pandemic has denied more than 820 million informal workers and over 70 million children in low-income households in the region adequate access to incomes and schooling. It said an additional 85 million people in Asia and the Pacific had already been pushed back into extreme poverty in 2021. “This outcome will have scarring effects on the future earning potential of these persons and overall productivity growth,” it said. The survey said regional economies face several downside risks related to supply constraints, rising inflationary pressures, shrinking fiscal space, and the emerging global economic fallout from the ongoing Russian-Ukrainian conflict. It said the economic growth in developing countries in Asia and the Pacific is projected to moderate to 4.5 per cent in 2022 and 5 per cent in 2023, compared with an estimated growth rate of 7.1 per cent in 2021. It added that the cumulative output loss due to COVID-19 for the region’s developing economies between 2020 and 2022 is estimated to be nearly US$2 trillion. “With dwindling fiscal space in many developing countries in the region, the survey cautions against cuts in fiscal expenditures on health care, education and social protection in order to protect the development gains of past decades and prevent further deepening of inequalities in the region,” the survey said. Therefore, ESCAP recommends a three-pronged policy agenda aimed at shaping an inclusive economy in Asia and the Pacific. First, it said developing countries in the region must tilt public spending towards basic universal health coverage, push further towards universal primary and secondary education, and expand social protection coverage. “Smart” fiscal policies can improve the overall efficiency and impact of public spending and revenue collection. New sources of revenue should be explored, such as taxing the digital economy, along with shifting the tax burden towards those better off,” it said. Second, ESCAP suggest that central banks in the region can and should tilt their traditional monetary policy conduct towards promoting inclusive development. Third, it said the governments can also proactively guide, shape and manage the structural economic transformation process, which is increasingly driven by the digital-robotics-AI revolution, for more inclusive outcomes. The Economic and Social Survey of Asia and the Pacific is the UN’s oldest and most comprehensive annual socioeconomic study informing policymaking in the region. It is first published in 1947. -- BERNAMA