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The United Nations Development Program (UNDP) announced the release of its Economic and Social Survey of Asia and the Pacific 2006 in Beijing on Thursday at an event entitled, "Inspiring the International Economy Energy".

 

According to the survey, global economic growth in 2005 was driven essentially by the strong economic performance of China and the US. But there was a slowdown recorded in growth; 3.2 percent as compared with the record growth rate of 4 percent in 2004.

 

The growth rate of developing countries in Asia and the Pacific also decelerated moderately from 7.4 percent in 2004 to 6.6 percent in 2005. The slowdown in the global economy and in the developing countries of Economic and Social Commission for Asia and the Pacific (ESCAP) was the result primarily of high and volatile oil prices and a softening of global trade. More expensive oil also heightened inflation in the region. However, overall price pressures remained mild by historical standards.

 

Prospects for 2006 indicate that gross domestic product (GDP) growth should maintain its current momentum as price pressures abate slightly. This is based on the following assumptions: that oil prices do not increase significantly; that large global current account imbalances do not unwind precipitously; and that a judicious mixture of monetary and fiscal policies preserves the growth momentum while keeping inflation in check.

 

In relation to China, its GDP growth is expected to slow down marginally from 9.6 percent in 2005 to around 8 percent this year.

 

The region also faces the threat that avian influenza might develop into a pandemic, the report warned. As a conservative estimate, the global loss in GDP from a pandemic could amount to US$200 billion in just one quarter and in a worst-case scenario could plunge the global economy into recession. So there is an urgent need for collective preparedness in the region involving the stockpiling of medical supplies and taking joint action on possible control measures, such as travel restrictions, to minimize the spread of the disease.

 

Longer-term issues as highlighted in the report relate to the ongoing challenge of alleviating poverty and reducing inequalities, utilizing the benefits of home remittances to simultaneously improve social indicators and macroeconomic fundamentals, and reenergizing the trade liberalization agenda agreed at the Sixth WTO Ministerial Conference held in Hong Kong in December 2005.

 

Moreover, the region needs to address the problems of unemployment and underemployment. The incidence of unemployment appears to have increased despite rapid growth in recent years while underemployment remains more serious than unemployment, especially in rural areas. Even within the ranks of the employed, the vast majority of workers earns a paltry wage and therefore remains vulnerable to internal and external shocks.

 

A disturbing aspect of the problem is the phenomenon of youth unemployment, which appears to be on the rise. Governments therefore need to take a number of initiatives to improve the functioning of labor markets, specifically to enhance youth employment, and improve the productivity and earnings of all workers.

 

For their part, employers need to display better corporate responsibility by providing training opportunities for workers to enable them to enhance their skill levels in today's rapidly changing global economy.

 

This 2006 edition of the annual report was prepared and completed in Bangkok by ESCAP by 62 commissioners. It has been released globally in New York, Geneva, and 13 other cities in the Asia-Pacific region, including Beijing, Colombo, Dacca, Islamabad, Jakarta, Katmandu, Kuala Lumpur, New Delhi, Manila, Moscow, Seoul, Tokyo and Hanoi.

 

(China.org.cn by Xu Lin, March 31, 2006)