Global Financial Crisis and Economic and Social Challenges for Asia and the Pacific
As the first global economic contraction in modern times hit Asia and the Pacific in late 2008, economic growth among developing economies of the region decelerated sharply from a pre-crisis level of 9.1 % in 2007 to 4.0 % in 2009. The seemingly V-shaped recovery witnessed in 2010 was subject to several downside risks, such as return of inflation and financial and exchange rate volatility, and risks of a double-dip recession that have continued to threaten the fragile recovery 2 years beyond this chapter was first written and as most of the economies across the globe have witnessed another slowdown since the second half of 2011. Besides them there is the medium-term challenge of sustaining Asia-Pacific growth as the advanced economies of the West are no longer able to play their role as engines of global growth. ESCAP has argued that the region can turn its challenges such as economic, social, ecological, and development imbalances into opportunities. For instance, new aggregate demand could be generated for driving growth by closing the development gaps by empowering the poor and generating growth which is more inclusive of the poor and more ecologically sustainable. Social protection programs and interventions must be seen not only as solely welfare strategy but as social investments that pay off richly. The focus should also be on driving agricultural growth and make agriculture more environmentally resilient, as the majority of poor people live in the rural areas and depend on agriculture for livelihood. Greener industries and businesses based on innovations that are eco-efficient will save energy, water, and earth’s resources and provide more affordable green products and services, while promoting environmental sustainability could become new drivers of growth. The financial system could be made more inclusive to make modern financial services more accessible and small and medium enterprises can be assisted to contribute to development. Investment in human capital will also enable Asia-Pacific region to shape a more knowledge-intensive and innovative path for sustaining future growth. The chapter is concluded with some policy options for leveraging some of these synergies between economic, social, and environmentally sustainable policies for a more inclusive and sustainable future for Asia-Pacific.
KeywordsGlobal Financial Crisis Social Protection Downside Risk Asian Financial Crisis Fiscal Stimulus
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