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 quintile and seven times worse in Thailand (UNICEF, 2011b). In South Asia undernutrition among children decreased only slightly, from 64% in 1995 to 60% in 2009 for the poorest 20% of the population as opposed to a large decrease from 37% to 26% among the richest 20% during the same period (ADB, 2012b). Significant disparities in access to social services within countries are also stratified by area of residence and by gender. Lack of progressivity in tax structure and insufficient public provisioning contributing to inequality Inequality in the region has been exacerbated by the failure of fiscal policy to play its distributional role through making the tax structure more progressive and providing for increased expenditure in the public provisioning of essential services, including social protection. Many economies in the region have failed to raise sufficient tax revenue despite rapid growth, as demonstrated by their low and stagnant tax-to- GDP ratios (see figure 1.21). The stagnant tax-to- GDP ratios when the economy was growing indicate lack of sufficient progressivity of the tax structure. In fact, the Asia-Pacific economies as a group have the lowest tax burden of any developing region in the world (Park, 2012). The dependence of the region’s economies on direct income taxes as opposed to indirect value-added taxes is lower than many countries and far below that of the OECD economies as a whole (Park, 2012). Declines in formal employment and the consequent rise in vulnerable employment are also contributing to the growing inequality through the falling share of wages in GDP. There is a clear negative relationship between the tax burden of countries in the region and their levels of inequality (see figure 1.22). The negative relationship is more pronounced between public social expenditure and levels of inequality (see figure 1.23). In spite of significant progress in recent years in a number of countries, including through extending provision of basic health-care access and income support to poor workers and households, Asia- Pacific countries still exhibit significant shortcomings in their social protection regimes. Public social security expenditure remains low at less than 2% of GDP in one-half of the countries where data are available (see figure 1.24). In addition, only 30% of persons above the retirement age in Asia and the Pacific receive a pension on average, while only 10% of the unemployed receive any benefits (ILO, 2010c) and (Bonnet, Saget and Weber, 2012). Vulnerable employment is a persisting issue within the Asia-Pacific region. Despite high rates of economic Figure 1.21. Tax-to-GDP ratio in selected developing Asia-Pacific economies Percentage of GDP 20 18 16 14 12 10 8 6 4 2 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Bangladesh India Pakistan Cambodia China Indonesia Thailand Republic of Korea Source: ESCAP, based on data from CEIC Data Company Limited. Available from http://ceicdata.com (accessed on 8 February 2013). 52
THE STATE OF INCLUSIVE AND SUSTAINABLE DEVELOPMENT IN UNCERTAIN TIMES CHAPTER 1 Figure 1.22. General government taxes and inequality in selected global and Asia-Pacific economies 70 60 HND COL SYC BOL BRA ZAF Gini coefficient 50 40 30 ARG COG IRN BTN YEM PRY CHL MEXPER SWZ CRI SLV JAM CHN MKD RUS THA USA GEO MAR TUR MYS LTU ISR MDV VNM PRT EST BIH GBR AZE JOR LVA IRL ALB ESP POL MNG GRCMDA AUS ITA TJK IND BEL ARM CHE HRVFRA CAN EGY ROU NLD HUN LUX KAZ DEU SVN AUT BLR UKR SRB FIN SVK CZE BGR NOR SWE LSO y = -0.3017x + 44.964 R 2 = 0.0592 DNK 20 10 Source: ESCAP. 0 0 5 10 15 20 25 30 35 40 45 50 General government taxes over GDP (per cent) Notes: Asia-Pacific economies are highlighted in bold. Country codes - countries and areas of the ESCAP region are available in the explanatory note. - non-ESCAP members; names and codes are as follows: ALB - Albania; ARG - Argentina; AUT - Austria; BEL - Belgium; BGR - Bulgaria; BIH - Bosnia and Herzegovina; BLR - Belarus; BOL - Bolivia; BRA - Brazil; CAN - Canada; CHE - Switzerland; CHL - Chile; COG - Congo, Rep.; COL – Colombia; CRI - Costa Rica; CZE - Czech Republic; DEU – Germany; DNK – Denmark; EGY - Egypt, Arab Rep.; ESP – Spain; EST – Estonia; FIN – Finland; FRA – France; GBR - United Kingdom of Great Britain; GRC – Greece; HND – Honduras; HRV – Croatia; HUN – Hungary; IRL – Ireland; ISR – Israel; ITA – Italy; JAM – Jamaica; JOR – Jordan; LSO – Lesotho; LTU – Lithuania; LUX – Luxembourg; LVA – Latvia; MAR – Morocco; MDA – Moldova; MEX – Mexico; MKD - Macedonia, FYR; NLD – Netherlands; NOR – Norway; PER – Peru; POL – Poland; PRT – Portugal; PRY – Paraguay; ROU – Romania; SLV - El Salvador; SRB – Serbia; SVK - Slovak Republic; SVN – Slovenia; SWE – Sweden; SWZ – Swaziland; SYC – Seychelles; UKR – Ukraine; USA – United States of America; YEM – Yemen Rep.; ZAF - South Africa. Figure 1.23. General government social expenditures and inequality in selected global and Asia-Pacific economies General government social expenditures and inequality 70 SYC ZAF 60 50 JAM LSO BOL SLV y = -0.3992x + 56.714 R 2 = 0.3308 Gini coefficient 40 30 20 CHN YEM BTN GEO MDV AZE IRN RUS PRT TUR EST ISR ESP ITA LTU LVA BEL GBR MDA ALB GRC IRL POL ROU SVN HUN CAN LUX UKR KAZ EGY NLD AUT BLR BGR SRB DEU SVK FIN NOR CZE SWE DNK 10 Source: ESCAP. Note: See notes for Figure 1.22. 0 0 10 20 30 40 50 60 70 80 growth in East Asia, more than half (50.8%) of the region’s workforce maintains vulnerable employment status. Such figures are significantly worse in South Asia where vulnerable employment is more than 78% (ILO, 2011a). Vulnerability of employment and inequality are both inimical to domestic demand. As shown above, General government social expenditures over total government outlays (per cent) inequality and vulnerability have been exacerbated by the failure of governments to raise tax revenue through a progressive tax structure. This has constrained their ability to spend on basic social services, including social protection. Progressive taxation and social protection measures not only reduce inequality, but also lessen vulnerability by acting as automatic stabilizers. The low tax revenue 53
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UNDER EMBARGO UNTIL 03.30 GMT, THUR
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ECONOMIC AND SOCIAL SURVEY OF ASIA
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PREFACE The Economic and Social Sur
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EXECUTIVE SUMMARY FORWARD-LOOKING M
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on education and health. Indebted c
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ACKNOWLEDGEMENTS This report was pr
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CONTENTS Page Foreword ............
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CONTENTS (continued) Page Australia
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BOXES Page A. Forward-looking macro
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FIGURES (continued) Page 1.20. Ineq
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TABLES Page 1.1. Main destination e
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References to dollars ($) are to Un
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ABBREVIATIONS ADB AEC APEC ASEAN AS
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SOURCES OF QUOTATIONS (a) Page 1: a
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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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