Asian countries called to retool growth strategies

By The Nation

As a consequence of a sharp decline in demand for their exports, Asian countries face the challenge of retooling their growth strategies away from a heavy reliance on manufacturing exports to industrialised countries.

In addition, growth

needs to be rebalanced, putting larger weight on stimuli to domestic

consumption and public investment in infrastructure in order to sustain

robust rates of economic growth.

These are among the key findings contained in the United Nations annual

economic report World Economic Situation and Prospects 2009, for which the

Asia-Pacific regional launch will be held in Bangkok this Thursday.

The World Economic Situation and Prospects reports are produced at the

beginning of each year jointly by the UN Department of Economic and Social

Affairs, the United Nations Conference for Trade and Development and the

five United Nations regional commissions, including the United Nations

Economic and Social Commission for Asia and the Pacific (ESCAP).

This year's report says that if developed economies fail to recover in the

second half of 2009, then the Asia-Pacific region's gross domestic product

(GDP) growth would slow to as low as 3.7 per cent.

China remains the region's locomotive and its GDP growth dropped from 11.9

per cent in 2007 to a lower, albeit still strong 9.1 per cent in 2008.

Cambodia, the Philippines and Singapore, with their heavy reliance on

manufacturing exports to industrialised countries, have been affected the

most by declining exports resulting in their GDP growth dropping by about 3

percentage points in 2008 compared with 2007. In contrast, record high

prices of export commodities, including rice, palm oil and energy, in the

first half of 2008 allowed countries such as Thailand, Indonesia and, to a

lesser extent, Malaysia, to sustain growth rates in 2008 at levels similar

to those in 2007.

The regional launch of the World Economic Situation and Prospects 2009 will

be held in Bangkok this week. Senior officials from ESCAP - the Chief of

its Macroeconomic Policy and Analysis Section, Tiziana Bonapace, and

the Senior Adviser, Raj Kumar - will present the report's findings.

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