Full Report - Subregional Office for East and North-East Asia - escap

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ECONOMIC AND SOCIAL SURVEY OF ASIA AND THE PACIFIC 2013 Thus, despite the remarkable resilience of the Asia- Pacific economies to economic crises and natural disasters, the people living in this region continue to be highly vulnerable and insecure. In other words, there is a disconnect between the resilience of the economies and the resilience of the people in the region as rapid growth and economic recovery have not been inclusive and did not increase security of jobs and livelihoods. Instead, growth has been mostly jobless, that is without a commensurate growth of decent and productive employment in the formal sector. As a result, livelihood insecurity and disparities of opportunities and outcomes, including income and wealth, are on the rise and reinforcing one another, especially in the absence of a decent social protection system. Therefore, enhancing resilience of livelihoods and the inclusiveness of the development process must be explicitly recognized as key priorities for the Asia- Pacific region when considering the development agenda beyond 2015 and assessing the challenges that lie ahead. There is a clear need for forward-looking macroeconomic policies that focus on productive and decent employment, human and social development and environmental protection as well as on protecting the development gains in times of crisis, instead of just on inflation and the budget deficit or public debt (see box A). Experience over the past three decades has shown that low inflation and a primary budget surplus may be a necessary but not sufficient condition for enhancing the resilience of people and attaining inclusive and sustainable development. Forward-looking macroeconomic policies, thus, must promote the provision of “universal access to public and social services” and “social protection floors” in order to make development more inclusive and protect development gains. 5 As the ESCAP 2011 Theme Study, The Promise of Protection: Social Protection and Development in Asia and the Pacific reiterated, “a robust system of social protection not only fulfils people’s basic rights, it also establishes a firm platform for both social and economic development and provides an automatic stabilizer for vulnerable groups affected by crisis”. Therefore, “social protection must not simply be seen as a handout. It is an investment in inclusive growth. It is an investment in human capabilities to get people out of exclusion and poverty and to build resilience to risks and vulnerabilities”. 6 In the context of the Asia-Pacific region, both resilience and inclusiveness have specific meanings beyond what is generally understood. In particular, as highlighted in the ESCAP 2013 Theme Study, Building Resilience to Natural Disasters and Major Economic Crises, resilience entails not only the ability to steer the economy and sustain growth during economic crises but also protect livelihoods and hence the resilience of people. Box A. Forward-looking macroeconomic policies “Forward-looking macroeconomic policies are needed to safeguard the sustainability of public investment strategies in support of broad-based growth and the achievement of the Millennium Development Goals. Macroeconomic policies should not focus narrowly on debt stabilization and curbing inflation, but should ultimately be supportive of growth of real output and employment. It is often necessary, therefore, to relax unnecessarily stringent fiscal and monetary restrictions and to use countercyclical fiscal and monetary policies to boost employment and incomes and to minimize the impact of external and other shocks on poverty. This requires countries to strengthen mobilization of domestic resources and adopt mechanisms that promote countercyclical policy responses. Enhanced international cooperation to strengthen tax revenue collection and increase sovereign debt sustainability can greatly buttress the fiscal capacities of all Governments”. Source: Report of the Secretary-General A/64/665: Keeping the promise - a forward-looking review to promote an agreed action agenda to achieve the Millennium Development Goals by 2015, para. 50. 4
▲ WHY FORWARD-LOOKING MACROECONOMIC POLICIES FOR INCLUSIVE AND SUSTAINABLE DEVELOPMENT IN ASIA AND THE PACIFIC? INTRODUCTION Box B. Mainstreaming social and environmental pillars for inclusive and sustainable development Figure A below contains a schematic presentation of an integrated framework in which the strengthening of social and environmental pillars through the state provision of basic income security and public services to all and investment in environmental protection reinforces the economic pillar and hence helps achieve resilient and inclusive sustainable development. It also recognizes that strengthening the social and environmental pillars has a direct fiscal implication, which, in turn, has a direct macroeconomic impact on, for instance, inflation and debt. This may consequently affect growth. The framework also includes resource mobilization. It is easier to mobilize resources when they are earmarked for socially desirable causes. Moreover, increased access to basic public services, such as improved health and education, as well as greater income security will make growth more inclusive. It will also over time lead to a more productive labour force and thereby to more sustainable growth as the total factor productivity increases, strengthening in turn resource mobilization. As a result, the impacts of such public actions to strengthen social and environmental pillars on public debt and inflation may not be large, and should not destabilize the macroeconomy. Thus, it is a win-win solution. Figure A. An integrated framework Inclusive and sustainable development ▲ ▲ Resource mobilization ▲ Higher productivity and sustained growth ▲ Public debt and inflation ▲ Required public investment ▲ ▲ Healthier and more educated labour force Better environment Resilient people Inclusive society ▲ Strengthening social and environmental pillars by providing universal access to basic public services through well designed national public investment policies, that focus, for instance, on: Education Energy security Health Human security Income security Environmental protection ECONOMIC PILLAR ▲ ▲ SOCIAL PILLAR ▲ ▲ ENVIRONMENTAL PILLAR Source: ESCAP. 5
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Page 7 and 8: PREFACE The Economic and Social Sur
Page 9 and 10: EXECUTIVE SUMMARY FORWARD-LOOKING M
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THE STATE OF INCLUSIVE AND SUSTAINA
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MACROECONOMIC PERFORMANCE AND POLIC
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DEVELOPMENTAL MACROECONOMICS: THE C
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Turkey Hong Kong, China Tajikistan
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INVESTING IN INCLUSIVE AND SUSTAINA
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Percentage of GDP INVESTING IN INCL
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❚ ❚ ✕❚ INVESTING IN INCLUSI
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207 REFERENCES
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REFERENCES REFERENCES Abdyrasulova
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REFERENCES (2012a). The debate on e
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REFERENCES (2012). World Energy Out
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REFERENCES Ma, K-H (2008). Assessme
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REFERENCES (2011b). Child Poverty i
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REFERENCES United Nations, Economic
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STATISTICAL ANNEX STATISTICAL ANNEX
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STATISTICAL ANNEX Table 2. Poverty
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STATISTICAL ANNEX Table 4. Resource
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STATISTICAL ANNEX Technical notes T
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STATISTICAL ANNEX Source: Barro, Ro
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STATISTICAL ANNEX estimates based o
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This publication may be obtained fr
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READERSHIP SURVEY The Macroeconomic
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Half a decade since the onset of th
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Full Report - Subregional Office for East and North-East Asia - escap

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