UN calls for addressing inequality

Economic growth likely to slow in developing Asia-Pacific countries

Developing Asia-Pacific economies need to shift focus on social inclusion to address such issues as inequality and climate change, according to the United Nations Economic and Social Commission for Asia and the Pacific, or UNESCAP.

"We cannot grow if we continue to have inequality. We need a paradigm shift. We can't just focus on economic growth at the cost of social inclusion," UNESCAP's Deputy Executive Secretary Hongjoo Hahm said in Hong Kong on April 4.

The Bangkok-based agency released its annual report, Survey 2019: Ambitions Beyond Growth. Despite huge economic gains recorded in the last 50 years, UNESCAP said developing Asia-Pacific countries continue to struggle with inequality and environmental degradation.

According to the UNESCAP report, income inequality has increased since 1990, with the top 10 percent of the region's population accounting for more than half of income and wealth in 2017.

Greenhouse gas emissions have increased sixfold, from 0.9 to 5.8 metric tons per capita. The increased emissions will also affect the region the most as it is home to five of the world's 10 economies most affected by climate change in the past 10 years. The five are Bangladesh, Nepal, Sri Lanka, Thailand and Vietnam.

The GDP of the developing countries in the Asia-Pacific region expanded by 5.3 percent in 2018 but growth will slow to 5 percent in 2019 and 5.1 percent in 2020 on the back of weaker export demand from Europe and the US-China trade friction.

Sweta Saxena, chief of UNESCAP's macroeconomic policy and financing for development division, said despite the expected slowdown, economic growth in the region remains stable. But she said the region's economic planners need to rethink their growth strategy to ensure that economic gains will not leave anyone behind.

"The $1.5 trillion annual investment will require a change in mindset. We need to invest in the wellbeing of people and planet," Saxena said at the report's launch. The proposed investment is equivalent to roughly 5 percent of the combined GDP of developing Asia-Pacific countries in 2018.

She said this investment will ensure that developing Asia-Pacific economies will meet UN's 17 Sustainable Development Goals.

The goals were approved in 2015 by 193 UN members and were meant to address the world's most pressing problems by 2030. Also known as Agenda 2030, the 17 goals include eradication of extreme poverty, halting deforestation, promoting gender equality and reducing conflict.

Saxena said the $1.5 trillion annual investment is tantamount to spending one US dollar per person per day. But this is enough to finance human capacity development, renewable energy sources and improved access to transport, information technology, water and sanitation.

She said $669 billion can be used to support basic human rights and develop human capacities. This can be done through targeted cash transfers, social insurance schemes, feeding programs, boosting farm production and improving healthcare and basic education systems.

A total of $590 billion will be allocated for environmental protection. This investment will be used to encourage the shift from fossil fuels to clean energy sources; enhance energy efficiency; conserve coral reefs and mangrove areas; and build climate resilient infrastructure.

The remaining $196 billion will finance the building of more roads and railways, expanding access to information and communications technology, water supply and sanitation services.

The UNESCAP report said both public and private funding sources can be used to raise the investments. Governments, for instance, can impose wealth-based and environmental taxes to raise revenues.

Hahm said that while wealthier countries like China can afford such investment, smaller economies like the Pacific island countries and regions may need more help. This is why regional cooperation is important.

He said private financing can be coursed through innovative financial instruments like green bonds and impact investing.

"This is why we launched the UN ESCAP report in Hong Kong as this is the financial hub of Asia," Hahm said.

He said green bonds and new investment tools can leverage the massive $51 trillion in assets managed by the private financial sector in the developing Asia-Pacific region.

prime@chinadailyapac.com

(China Daily 04/05/2019 page4)