1 May 2017: The UN Economic and Social Commission for Asia and the Pacific’s (ESCAP) annual flagship report highlights the importance of effective governance and improved fiscal management to sustain the region’s economic growth and support progress on the 2030 Agenda for Sustainable Development and its Sustainable Development Goals (SDGs).
The report, titled ‘Economic and Social Survey of Asia and the Pacific 2017: Governance and Fiscal management,’ projects that the region’s developing economies will grow at 5.0% in 2017 and 5.1% in 2018, up from 4.9% in 2016. China is forecasted to grow at 6.5% in 2017 and India at 7.1%.
The region’s economic growth is expected to rely more on productivity gains, which require effective institutions and governance.
The authors identify global uncertainty, rising trade protectionism and weak external demand as risks to the region’s economic growth, an increase in which could reduce growth. Therefore, future economic growth in the region is expected to rely more on productivity gains, which will require effective institutions and better governance.
The Survey finds that the quality of governance affects development outcomes by affecting the composition and efficiency of public expenditure. Weak institutions are linked to increasing inequalities and slowed poverty reduction, as well as capacities to design and implement environmental rules and safeguards. The report also illustrates how corruption can distort the structure of public spending by reducing social expenditure for education, health and social protection. The report finds a marginal improvement in institutional quality in the region, due to gains in landlocked developing countries (LLDCs) in North and Central Asia and countries in East and North-East Asia.
The authors also observe that: economic expansion has not resulted in adequate creation of decent jobs in the region, contributing to rising income inequality; developing Asia-Pacific economies use twice as many resources per dollar of gross domestic product (GDP) as the rest of the world; and fiscal data and information should be produced and disseminated to support public administration capacities. The report also recommends a proactive fiscal policy through productive investments in infrastructure, resource efficiency and social protection,and creating an enabling environment of institutions, policies and public services to increase the efficiency of factor and product markets.
ESCAP Executive Secretary Shamshad Akhtar launched the report at ESCAP headquarters in Bangkok, Thailand, on 1 May 2017, emphasizing the importance of effective institutions and better governance to advance the 2030 Agenda. [ESCAP Press Release] [UN Press Release] [Publication Website] [Publication: Economic and Social Survey of Asia and the Pacific 2017: Executive Summary] [Launch Information]