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Economic and Social Survey of Asia and the Pacific 2024
Given the urgency of the SDG Stimulus and that public debt distress is likely to remain a major macroeconomic policy challenge for Asia and the Pacific in coming years the Survey 2024 will continue to focus on fiscal and public debt challenges and policy options. After outlining the changing economic financial and development context and its medium-term fiscal implications the Survey 2024 will dive deeper into policy options that developing Asia-Pacific economies as debtors and as part of the international community can explore to boost affordable and long-term financing for essential public spending on sustainable development and reduce the associated sovereign credit risks and costs. In addition to identifying ‘what’ policy actions should be taken the Survey 2024 will also give emphasis on ‘how to’ implement the needed policy actions. Insights from approaches such as political economy behavioural science and country case studies will be used.
Foreword
Our world is engulfed in a perfect storm. The ongoing effects of the cost-of-living crisis are joined by multiple conflicts geopolitical tensions rising mistrust and the triple planetary crisis of climate change biodiversity loss and pollution.
Macroeconomic prospects, challenges and policies
Macroeconomic conditions in the developing Asia-Pacific region continue to remain challenging despite higher GDP growth and moderating inflation. Average economic growth in the region picked up from 3.5 per cent in 2022 to 4.8 per cent in 2023; however the rebound was concentrated in only a few large economies. In other developing Asia-Pacific economies economic growth remained moderate in 2023. On the external front countries that rely on merchandise exports faced weak external demand especially from China and Europe. On the domestic front although global commodity prices have receded from their 2022 peaks following the outbreak of war in Ukraine and international sanctions related to that war average inflation in the Asia-Pacific region remained relatively high thus repressing household consumption.
Affordable and long-term financing for Governments: Domestic taxation and savings
Developing Asia-Pacific countries are confronted with the trilliondollar challenge of financing effectively in order to achieve the Sustainable Development Goals. Prior to the COVID-19 pandemic the Sustainable Development Goal financing gap in the developing countries of Asia and the Pacific was estimated at $1.5 trillion annually or equivalent to 5 per cent of the combined GDP of economies in the region (ESCAP 2019). This estimate is likely to have increased since then. Globally such a financing gap in a group of 48 developing countries amounts to $2.3 trillion.
Fiscal implications of global megatrends
The rapidly evolving global landscape propels fiscal policy into profound transformations frequently venturing into uncharted territory
Affordable and long-term financing for Governments: Multilateral development cooperation
In the wake of the substantial financing needs for investing in the Sustainable Development Goals and tight global financing conditions (see chapter 1) increasing access to affordable and long-term financing for Governments cannot be achieved solely through domestic policy actions (see chapter 2). In February 2023 the United Nations Secretary-General outlined a vision to deliver financing at scale in his SDG Stimulus to Deliver Agenda 2030 initiative (United Nations 2023d). Taking a cue from this global agenda the present chapter explores three areas of stronger international development cooperation that can help increase access to development financing by Governments in the Asia-Pacific region.
Explanatory notes
Analyses in the Economic and Social Survey of Asia and the Pacific 2024 are based on data and information available up to 15 February 2024.
Acknowledgements
The Economic and Social Survey of Asia and the Pacific is a flagship publication of the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP). Published annually since 1947 the Survey is a valuable companion for policymakers civil society academia United Nations entities including the Resident Coordinators/United Nations Country Team Units and other stakeholders in the Asia-Pacific region; it provides forward-looking analyses and recommendations on economic conditions and key sustainable development challenges.
Preface
The 2024 edition of the Economic and Social Survey of Asia and the Pacific depicts a mixed picture of the region’s economic landscape.
Two Years in Review: Changes in Afghan Economy, Households and Cross-cutting Sectors (August 2021 to August 2023)
The report is an evidence-based assessment of the economic and social situation in Afghanistan two years after the power shift in August 2021. The report shows that the Afghan economy and people are still in crisis with high levels of multidimensional deprivation low growth and urgent humanitarian needs. The report also highlights the impact of the crisis on women and girls who face severe restrictions on their rights and freedoms. The report calls for urgent action to address the humanitarian and basic needs of the Afghan people by stimulating economic recovery revitalising the financial sector and investing in community development and local economic resilience including women’s economic enterprises. The report aims to inform and influence the policy discourse and decision-making on the future of Afghanistan and to contribute to the efforts of building an increasingly stable prosperous and resilient nation.
Executive Summary
Two years following the power shift in August 2021 there are some positive — mixed with lingering negative signs — in Afghanistan’s society and economy. The country appears to have made good progress in maintaining stability and security - which is vital for the resumption of economic activity and pursuit of development. Similarly the efforts to curb corruption and combat opium production and illicit narcotics trade have yielded fruit creating an opportunity for joint national and international efforts to secure gains and build on the momentum.
Gender developments: Women disproportionately victimized by the changes
Since August 2021 different decrees have been put in place reducing the access of women and girls to education employment and daily public services. This has effectively reversed two decades of hard-won gains in gender equality. An indicative timeline of the additional measures is presented in the annex. The economic loss caused by these restrictions on female workforce was estimated to reach up to US$ 1 billion by end of 2022.
Subsistence insecurity index: An innovative approach to analyse extent and intensity of destitution
This study constructs an index called the Subsistence Insecurity Index (SII) to quantify the extent and degree of subsistence insecurity prevalent in Afghanistan following the Alkire-Foster (AF) method for the multidimensional poverty index (MPI). Using the MSNA2022–2023 data a set of 17 indicators are selected based on relevance to subsistence that cover the dimensions of health living conditions and livelihoods in order to identify whether or not a household is subsistence insecure (Table 1 Annexes) meaning whether the households have access to most basic items opportunities and services needed for mere subsistence-level living conditions.
Acknowledgements
This report is the second annual review after the regime change in Afghanistan prepared by the United Nations Development Programme Country Office Team in Afghanistan under the overall direction and guidance of Mr. Stephen Rodriques UNDP Resident Representative in Afghanistan.