Sixth Astana Economic Forum: ESCAP organizes a session on "Challenges and Opportunities for Inclusive and Sustainable Development in Asia-Pacific"

Key challenges faced by Asia and the Pacific in achieving inclusive and sustainable development and policy options to cope with these very challenges were discussed at a panel session titled “Challenges and Opportunities for Inclusive and Sustainable Development in Asia and the Pacific” organized by ESCAP at the VI Astana Economic Forum. The Forum took place in the capital of Kazakhstan on 23 May 2013.

Initiated back in 2008 by the President of Kazakhstan, Mr. Nursultan Nazarbayev, the Astana Economic Forum is an important annual event attracting some of world’s most prominent intellectuals and heads of international organizations. It aims to address issues of utmost importance and discuss possible solutions for present-day economic, financial and social challenges which the world is facing

Dr. Nagesh Kumar, ESCAP Chief Economist and Director of ESCAP South and South-West Asia Office based in New Delhi, delivered the keynote presentation on Economic and Social Prospects of Asia and the Pacific: Fostering an Inclusive and Sustainable Future. The other panelists at the Panel moderated by Mr. Nikolay Pomshchenikov, Head of ESCAP Almaty-based North and Central Asia Office, included Nobel Laureate Professor Edward Prescott of Arizona State University, H.E. Ambassador Ashok Sharma of India to Kazhakstan, and Lord Michael Hastings, Global head of Corporate Citizenship at the KPMG.

“Though the economic outlook of the region in 2013 shows a modest increase over the 2012 growth rate (at 6 per cent compared with 5.6 per cent in 2012), there is a serious risk of subdued growth rates becoming the “new normal” for many regional economies if present economic trends were to continue and structural impediments are not addressed. This could mean an estimated output loss of $1.3 trillion by end-2017,” said Dr. Nagesh Kumar, citing projections made in the ESCAP flagship Economic and Social Survey of Asia and the Pacific 2013. Among the North and Central Asian economies, Kazakhstan was expected to move up to a 6 per cent growth in 2013 compared to 5 per cent achieved in 2012 on the back of higher oil output.

Dr. Kumar also underscored the policy challenges and risks arising from continued global economic uncertainty and volatility of short-term capital flows and commodity prices, declining employment rates and increased vulnerabilities of workers especially youth, widening inequalities and infrastructure deficits and growth constraints of natural resources, as well as vulnerability to natural disasters. The key medium-term challenges, however, was the need for the region to rebalance its growth drivers from dependence on extra-regional demand to domestic and regional demand, Dr. Kumar stressed.

Given the many development gaps, the Asian and Pacific region had tremendous opportunities to generate new aggregate demand to sustain its dynamism by focusing on inclusiveness of growth and broadening social protection, Dr. Kumar argued. ESCAP, in its flagship Survey, had unveiled a package covering a job guarantee for the poor, a universal pension for elderly, benefits for disabled persons, increased health expenditure, universal education and energy access that could guide a broadening of the social protection agenda for the region. The cost of implementing such a package in a gradual manner by 2030 would be affordable for most countries without jeopardizing macro stability. Least Developed Countries within the region would however need to be supported by the international community in the context of global partnership. Many governments in Asia and the Pacific were moving towards such policies as demonstrated by India’s rural jobs guarantee programme, Thailand’s universal health scheme, and China’s recent efforts to rebalance growth. ESCAP argued that investing in the social and environmental pillars of sustainable development reinforces economic pillar and leads to sustained, inclusive and equitable growth.

Professor Prescott said that the current turmoil in the advanced economies was a result of the bad policies followed in the past. A number of Asian countries were rapidly catching up with the advanced economies with sound policies. Japan, the Republic of Korea, Singapore, Hong Kong and Taiwan Province of China, have caught up with the advanced economies and now China was moving on the similar trajectory. Lord Hastings discussed the enormous impact of expanding middle class and urbanization on sustainable development that will require high investments and support from businesses, governments and civil society.

H.E. Sharma discussed challenges of inclusive and sustainable development in South Asia, especially in the context of rising population density and natural resource scarcity. In the ensuing discussion, issues concerning lessons from the history in industrialization experiences of Asian countries and of harnessing youth bulge were addressed.