Analysis by Kalinga Seneviratne<\/p>\n\n\n\n
BANGKOK (IDN) – The major United Nations agency overseeing development in the Asia-Pacific region has called for a major rethink in the development paradigm for the region.<\/p>\n\n\n\n
In an \u2018Economic and Social Survey<\/a>\u2019 of the region presented to its 72nd sessions here from May 17 to 19, the Economic and Social Commission for Asia and the Pacific (ESCAP<\/a>) says that while the centre of global economic gravity continues to move eastwards, the time has come for the Asia-Pacific region to adopt a development model that relies more on domestic and regional demand.<\/p>\n\n\n\n Arguing that it is futile to continue the exclusive reliance on export-led development, ESCAP is also calling for more rural agriculture and industrial development, with better rural-urban connectivity via transport and communication links.\u00a0\u00a0HINDI<\/a>\u00a0|\u00a0INDONESIAN\u00a0<\/a>|\u00a0JAPANESE<\/a>\u00a0|\u00a0TAGALOG<\/a>\u00a0|\u00a0THAI<\/a>\u00a0|\u00a0URDU<\/a><\/p>\n\n\n\n \u201cThese challenges can be partially met through enhanced domestic resource mobilisation, given the exceptional tax potential of the region. Unlocking this potential will require countries to abolish tax holidays and exemptions that are distorting investment regimes,\u201d ESCAP’s Executive Secretary Dr Shamshad Akther said in an opening address.<\/p>\n\n\n\n \u201cProgressivity of taxation systems will help to tackle inequalities and direct flows to more sustainable investments,\u201d she argued, pointing out that the region has good potential \u201cto strengthen enabling environments to tap capital for sustainability\u201d because it holds global liquidity close to 100 trillion dollars and sovereign wealth funds worth about 3 trillion dollars.<\/p>\n\n\n\n The economic outlook for Asia-Pacific is broadly stable, argues the report, predicting a growth estimated at 4.6 percent last year to increase marginally to 5 percent in 2017.<\/p>\n\n\n\n With the prospect for export-led growth uncertain due to economic woes in Europe and Japan as well as the United States, it is a shift in development strategy towards increasing domestic demand and productivity that will drive the regional economies of the future, says ESCAP.<\/p>\n\n\n\n \u201cOne of the fundamental issues we are raising in our survey is low wages,\u201d Hamza Ali Malik, Chief of ESCAP’s Macroeconomic Policy and Analysis Section, told IDN-INPS in an interview. \u201cIf the region is to have sustainable development, it has to enhance productivity (and) you need a high level of productivity to support a high level of real wages.\u201d<\/p>\n\n\n\n In a high-level discussion at the sessions here, there was broad agreement that monetary policy has failed and that fiscal policy now needs to be given more prominence, with governments using increased tax revenue to stimulate economic growth by investing in health, education and infrastructure development that would enhance productivity in the long term.<\/p>\n\n\n\n