ECONOMIC AND SOCIAL

SURVEY OF ASIA AND THE

PACIFIC 2006
Developing economies in the UNESCAP
region grew by 6.6 per cent in 2005,
down from growth of 7.4 per cent in
2004.

Notwithstanding the slight deceleration,

performance in 2005 was remarkable in
view of an increasingly adverse
economic environment, led by high and
volatile oil prices, widening current
account imbalances and a softening of
global trade.
Economic growth in 2005
was driven essentially by
the strong performance of
China and the United States
of America.
The rise in oil and other commodity
prices did, however, increase
inflation in 2005 relative to 2004,
although the increase in prices
throughout the region remained
mild by historical standards.
Economies adjusted well to the
higher oil and commodity prices,
some attenuating the effects of
those prices by continuing to
subsidize petroleum products and
others by a pre-emptive tightening
monetary policy, and these
measures served to dampen
inflationary expectations.
Prospects for the UNESCAP
region for 2006 indicate that
output growth should maintain
its current momentum while
price pressures are likely to
abate somewhat if energy and
commodity prices remain at
current levels.
The region continues to face
serious and urgent demands. In
many countries, economic growth
is not generating enough well-
paying jobs or even enough to
absorb new entrants to the
workforce.
Inequality within countries
appears to be on the rise and
the environment continues to
deteriorate.
Across the region, the least developed
and Pacific island countries remain
marginalized, unable to participate fully in
the region’s dynamism. South Asia, where
GDP growth rates have risen dramatically
in the last two years, must sustain that
growth and translate it into a better
quality of life for the poor in East and
South-East
Asia, pockets of poverty continue to exist.
Central Asian economies are
making good progress, but
integration into the wider global
economy remains a daunting
challenge. In East and South-East
Asia, pockets of poverty continue to
exist.
Governments must continue to strive
for development through a
combination of macroeconomic
prudence and strong investment in
the future – in physical, social and
human assets – so that the pace of
progress can be maintained and its
fruits shared more equitably.
The principal policy issues and
challenges facing the region are
concerned with the course of oil prices,
the threat of global external payments
imbalances unwinding precipitously, the
impact of higher interest rates and the
potential for the avian influenza to
develop into a human pandemic.
Longer-term issues relate to the ongoing
challenge of poverty reduction, utilizing the
benefits of home remittances to
simultaneously improve social indicators
and macroeconomic fundamentals, and re-
energizing the trade liberalization agenda
following the Sixth World Trade
Organization Ministerial Conference, held in
Hong Kong, China, in December 2005.
THE GLOBAL ECONOMIC ROLE OF THE
ASIA-PACIFIC REGION

In 1973, Asia accounted for just 15% of the

world's economic output.

By 2003, the Asia-Pacific region's share was

23.9% of world output when measured on an
exchange rate basis.
Despite growth fluctuations,
Developing Asia has had a higher
average economic growth than the
industrialized United States, Japan,
and the EU over the last two
decades.
Asia-Pacific trade is multi-polar, with
neither the United States nor Japan
nor China being the single, dominant
trade partner of Developing Asia.
The United States produced 10% of
the world’s $7.7T of exports in
2003, China 8%, Japan 7%, and the
rest of Developing Asia 14%.
Developing Asia represents a
significant force in the global
trading system.
Research indicates that growth is
positively correlated to institutional
governance; however, governance is
not necessarily correlated to growth,
especially in cases of crony
capitalism and state capture of
profitable assets
 Key Factors for Asia- Pacific’s
Future

Energy, Infrastructure, and Environment.

Asia-Pacific’s economies grow, so do

their requirements for a better
infrastructure that balances demand in
energy, population, and environmental
factors.
 Urbanization
Urban issues have taken on
increasing importance as populations
move to the cities, placing stress on
physical and social infrastructures.

At present, 33% of Developing

Asia's population reside in urban
areas.
 Demographic Potential

The magnitude and youth of Asia-

Pacific’s population present a huge
market for trade and investment in Asia.
The Asia-Pacific region's 3.4B people
comprise 56% of the world’s population.

About 1B of Asia’s people are between 10

and 24 years old.
 International Cooperation

Multilateral trade groups not only

promote tariff reduction, but
seek a free, fair, and rule-based
environment, where healthy
competition improves security.
The World Trade Organization (WTO).

Asia-Pacific Economic Cooperation

(APEC).

Emergent Organizations
Association of Southeast Asian
Nations (ASEAN)
South Asian Association
for Regional Cooperation (SAARC)
EAST ASIA REGIONALISM IN THE CONTEXT
OF ASIA-PACIFIC DEVELOPMENT

“East Asia's future would be

determined by power politics much mo
re than by interdependence”

(Optimism of economists on the prospects for continuing

growth Vs. the pessimism with which strategists contemplate
potential security threats)

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