Priorities in addressing economic and financial shocks: Some Perspectives from Asia-Pacific LLDCs Syed Nuruzzaman Chief Countries with Special Needs Section ESCAP

Basic indicators of socio-economic performance of Asian LLDCs AFGARMAZEBHUKAZKYRLAOMONNEPTAJTURUZB GDP, bln US$ Population, mln Population growth annual, % Trade-GDP ratio, % Net FDI inflows, US$ , , , ,1871,403 Literacy rate 15+, % … …99… Life expectancy at birth, years Under 5 mortality rate, 1,000 live births Maternal mortality rate, 100,000 live births

Economic and financial shocks and the LLDCs

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External shocks and Coping Capacity A countrys vulnerability to external setbacks depends on the extent of its exposure to global economy and its capacity to cope

High proportion of exports to advanced countries Primary commodity exporters Highly dependent on capital flows – private, official (ODA) and remittance High external debt Nature of vulnerabilities of LLDCs

Direct balance sheet effects The credit squeeze Reduced availability of trade credit Effects –Fall in primary commodity prices –Falling export volumes –Reduced private investment flows –Reduced Official Flows –Reduced remittance flows Crisis Transmission in LLDCs

Stronger capacity to cope with crisis Weaker capacity to cope with crisis Varying levels of country exposure & coping capacity More exposure to external economic shocks Less exposure to external economic shocks

Economic Growth: Recent Trends

High trade-GDP ratio

Exports in GDP

Export growth

Direction of merchandise exports ( % of total)

MDG Score Card: ESCAP LLDCs

MDG Goal 1 – Poverty rate

Trends in Unemployment

Global economic crisis could push additional people into extreme poverty $1.25/day$2/day 2009 with revised economic growth rate 17 mil21 mil 2010 if economic growth continues 21 mil25 mil 2010 if economic growth same as 2009 i.e. prolonged crisis 31 mil36 mil

Slow progress in reducing poverty and hunger Progress in eradicating extreme poverty and hunger in LLDCs (MDG1) Country US$ 1.25 per day poverty (%) Underweight children (% under age 5) EarliestLatestEarliestLatest Afghanistan Armenia Azerbaijan Bhutan Kazakhstan Kyrgyzstan Lao PDR Mongolia Nepal Tajikistan Turkmenistan Uzbekistan … 17.5 (1996) 15.6 (1995) … 4.2 (1993) 18.6 (1993) 55.7 (1992) 18.8 ( (1996) 44.5 (1999) 63.5 (1993) 32.1 (1998 … 3.7 (2007) 2.0 (2005) … 2.0 (2007) 3.4(2007) 44.0 (2002) 2.2 (2008) 55.1 (2004) 21.5 (2004) 24.8 (2000) 46.3 (2003) … 3.9 (1998) 10.1 (1996) … 8.3 (1995) 11.0 (1997) 44.0 (1993) 12.3 (1992) 48.7 (1995) 17.4 (2005) 12.0 (2000) 18.8 (1996) … 4.0 (2005) 9.5 (2006) … 4.0 (2006) 3.4 (2006) 37.1 (2006) 6.3 (2005) 45.0 (2006) 17.6 (2007) 11.0 (2005) 5.1 (2006)

Goal 4: Reduce child mortality

Building resilience to future crisis

Building resilience – inclusive and sustainable development Prepare for new normal- build instability in the global markets and external shocks in development strategy Focus on broad-based, employment-intensive and inequality- reducing development strategy Economic growth driven by productive capacity development Diversify export base and destinations Invest in internal connectivity Land-linked hubs with strong transport corridors and trade facilitation Regional and south-south trade and financial cooperation Maintain macroeconomic stability, rule of law and reduce corruption International support through trade, investment, remittance, aid, and technology transfer Strengthen social protection Improve basic services and their delivery

Promoting social protection Social protection in Asia and the Pacific, selected countries

Please read Vientiane Consensus

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