The Bangkok based UNESCP (United Nations Economic and Social Commission for Asia and the Pacific) recently released its latest assessment of the region's economy through the annual Bulletin on Asia-Pacific Perspectives 2003/2004. The annual Bulletin examines the effects on the region's outbreak of the SARS epidemic, trade expansion in the region and implications for SME financing. The Executive Secretary of UNESCAP, Mr Kiim Hak-Su, launched the Bulletin with Mr Raj Kumar, the chief of the Poverty and Development Division. With the theme 'Asia-Pacific Economics: Maintaining Dynamism', the Bulletin issues related to global and regional interdependence and the promotion of sustainable development.

These articles provide a perspective on some of the major policy challenges facing countries in managing stable and equitable economic growth and social development against the backdrop of the Millennium Development Goals as set by world leaders in 2000 as well as unexpected, adverse external shocks. The Bulletin also gives a glimpse of the 2004 economic and social outlook of the Asian and Pacific region.


Summary of the Bulletin on Asia-Pacific Perspectives 2003/04

- The global economy, including the ESCAP region, showed unexpected strength in 2003 despite the war in Iraq, the SARS outbreak in Asia and geopolitical tensions in West and East Asia. Indeed, preliminary indications are that global GDP growth in 2003 will either match, or modestly exceed, the performance in 2002.

- Inflationary pressures have risen only slightly, despite volatility in the energy markets; as a result, monetary authorities virtually across the world have been able to maintain an environment of low interest rates.


- Assuming that there are no new negative shocks, the prospects for the global economy in 2004 are broadly positive, with the possibility of acceleration in the growth rate in the second half of 2004. In that event, GDP growth for the year as a whole could be around 1 percentage point more than in 2003.


- At the same time as growth picks up steam, new policy issues will inevitably arise in the months ahead. In addition, short-term policy issues have to be placed within a longer-term continuum.


- Most countries in the ESCAP region have to confront major development challenges that go beyond short-term economic management and embody structural change, such as progress in poverty eradication, in accordance with internationally agreed goals and commitments, notably the Millennium Development Goals. These longer-term objectives may not be reached if there is too much preoccupation with the short term and in the absence of more explicit policy interventions involving the application of additional financial and non-financial resources.


- Within the ESCAP region despite the rise of trade with China reliance on the United States economy continues; the United States still directly accounts for over 20 per cent of the exports of developing countries of the ESCAP region.


- Concurrently, in many developing economies of the region while overall external positions remain favorable, domestic public debt is rising. The rising incidence of macro-economic imbalances could presage significantly increased instability in global financial markets in the near future.


- In the near term, Governments of ESCAP member countries are faced with the policy challenges of sustaining the momentum of growth by preserving business and consumer confidence, maintaining their commitment to the agenda of trade liberalization in the face of setbacks and difficulties in negotiations, such as those at the Fifth WTO Ministerial Meeting, held at Cancun, Mexico, in September 2003, and coping with the rapid increase in bilateral trade agreements.


- While there are grounds for cautious optimism with respect to the near-term growth prospects, it would be imprudent to assume that all countries will be able to negotiate the next 12-18 months smoothly.


- As stressed by the ESCAP secretariat in previous issues of the Bulletin and the Economic and Social Survey of Asia and the Pacific, individual Governments need to remain committed to macroeconomic prudence, good governance and flexibility in day-to-day economic management. Simultaneously, Governments must facilitate structural change to enable their economies to maintain competitiveness in a globalizing world economy.


- For the long term, the greatest challenges for the developing countries in particular emanate from meeting the Millennium Development Goals and agreements on sustainable development reached at the World Summit on Sustainable Development.


- As in previous years, issues in global and regional interdependence and in the promotion of sustainable development remain the focus of the shorter articles in the Bulletin. These articles provide a perspective on some of the major policy challenges facing countries in managing stable and equitable economic growth and social development against the backdrop of the Millennium Development Goals as well as unexpected, adverse external shocks.


- This issue of the Bulletin includes articles on a wide range of subjects such as Sustainable Development, an Asian Perspective; Poverty in the Pacific island countries; The Bangkok Agreement: prospects for trade expansion in the Asia-Pacific region; Lessons from SARs; The development of e-financing: implications for SMEs; and Basel II: promoting financial stability in the Asian and Pacific region.

For further information, please contact United Nations Information Services Bangkok, Tel: (66) 02 288 1864-9, Fax: (66) 02 288 1052, E-mail: unisbkk.unescap@un.org