WIDE GAPS in human development, as well as inadequate infrastructure and intraregional trade are holding back Asia and the Pacific from assuming a bigger role in the global economy, a senior United Nations (UN) regional official said in an international conference in Jakarta, Indonesia on Thursday.
“Changes taking place in the world economy are likely to catapult the Asia-Pacific region as the center of gravity of the world economy, with China, India and Indonesia emerging as the growth poles for not only the region, but also the entire world,” an official statement quoted Noeleen Heyzer, executive secretary of the Economic and Social Commission for Asia and the Pacific (ESCAP), as saying during the conference in her keynote speech, titled: “Rebalancing of Economic Structures Key to Sustainable Growth.”
The ESCAP chief said, however, that the region must address major challenges before it can realize its economic potential and reclaim “the pre-eminent position it had for most of human history.”
“…one should not underestimate the downside risks and policy challenges that the region faces in sustaining its dynamism that is so critical for closing the development gaps and catching up with the advanced countries,” she said.
An immediate concern is the sharp rise in global food and energy prices which, according to ESCAP estimates, could delay and reverse progress in poverty reduction in many countries in the region, Ms. Heyzer said.
The emerging economies in the region also have to cope with the adverse impact of volatile capital inflows which threaten economic stability.
But the most basic challenge facing Asia-Pacific economies in the medium term is to reduce their traditional reliance on export markets in the slowing developed economies by deepening intraregional trade and investment, Ms. Heyzer said.
“ESCAP analysis shows that consumption has failed to keep pace with growth in East Asian countries, while investment has failed to keep up in ASEAN (Association of Southeast Asian Nations) countries, including Indonesia,” Ms. Heyzer said.
There is considerable potential for further boosting trade among Asia-Pacific countries which has grown much faster than the region’s trade with the rest of the world, she noted.
ESCAP studies show the presence of “considerable complementarities, in terms of matching imports of one country to buy exports of partner countries, within and between subregions,” Ms. Heyzer noted.
Realizing this potential will require improving physical and trade connectivity within the region by developing transport links and harmonizing business procedures across borders.
These challenges provide the region with a “historic opportunity to rebalance its economic structure in favor of itself to sustain its dynamism with strengthened connectivity and balanced regional development, and to make the 21st century a truly Asia-Pacific century,” the ESCAP chief said. –Businessworld
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