Geneva, 21 July 1999
ECE/GEN/99/18
STATEMENT BY
MR. ADRIANUS MOOY, EXECUTIVE SECRETARY OF THE
ECONOMIC AND SOCIAL COMMISSION FOR
ASIA AND THE PACIFIC (ESCAP),
TO THE
ECONOMIC AND SOCIAL COUNCIL
(Geneva, 21
July 1999)
Mr President,
Distinguished
Representatives,
It gives me much pleasure to
report briefly to the Council once again on the work of the
Economic and Social Commission for Asia and the Pacific.
It would be fair to say, Mr
President, that in the year since the Council last met, we
have witnessed a much deeper and more widespread impact of
the Asian economic and financial crisis than had been
anticipated. While seven relatively large economies of Asia
suffered significant output contractions in 1998 compared to
only one in 1997 and none in 1996, the output growth of
developing economies of the region almost stagnated in 1998 -
a stark contrast with the earlier trend which showed a nearly
6 per cent growth in 1997 and 7 per cent in 1996. Obviously,
this marks the worst performance of the developing countries
in the region in the last two decades. To make matters worse,
the crisis has been further transformed into a social crisis
of major proportions in several countries, with large
segments of the population having plunged into poverty and
destitution almost overnight.
Mr President,
In the midst of this
somewhat bleak scenario, however, there have been some
encouraging signs on the horizon. For instance, exchange
rates and stock markets have substantially recovered, foreign
exchange reserves have risen significantly, inflation has
been generally moderate and interest rates are on a downward
trend. There are also signs of restoration of both consumer
and investor confidence.
On the basis of these
developments, I would venture to suggest that the worst of
the crisis is over, and that we can look forward to a
resumption of growth during the second half of 1999. In
saying this, I am fully aware that optimism has to be
tempered by a number of risks and uncertainties in the
domestic, including banking and corporate restructuring, as
well as external economic environment, particularly the
prospect of Japan's recovery.
Clearly, it is the
responsibility of individual countries to respond to and
manage the process of liberalization. At the same time, the
international community has a responsibility to assist the
countries - not only in sustaining the process of recovery
but also in preventing the recurrence of future crises by
properly managing the process. If one were to compare the
Asian crisis to the Mexican crisis, the impact of the Asian
crisis has been much deeper and the process of recovery has
certainly been much longer compared to the Mexican crisis.
Indeed, the crisis has demonstrated unequivocally the need to
improve the architecture of the international financial
system if we are to avoid a more serious crisis. There is no
doubt that reforms in this area pose a daunting challenge
that requires careful thinking. At the same time, no one can
disagree that the present system is ill-equipped to prevent
the highly destabilizing impact of rapid capital movements on
individual economies. In this context, a number of issues
deserve urgent attention. As in national financial systems, a
lender of last resort facility is needed to counteract a
pervasive lack of investor confidence. An agreed framework
for debt workouts is required. The development of a
role-based system encompassing arrangements for overseeing
and, if necessary, regulating cross-border capital flows also
merits serious consideration.
At the regional level, a
common framework of managing the financial sector is needed.
This includes the establishment of common prudential
standards, a more uniform classification of non-performing
loans, the development of monitoring and surveillance
mechanisms to contain the contagion effects, and the
establishment of a quick-disbursing fund to provide emergency
assistance.
Mr President,
It was clear from the
discussions at the fifty-fifth session of the Commission that
continued efforts towards structural reform by governments
are important to speed up economic recovery, to strengthen
countries' competitiveness and to promote economic security
in this era of globalization. It was also felt that the
process of liberalization has to be managed carefully,
including the pacing and sequencing of sectors in line with
the condition of a country's institutions and human resource
development, and economic governance. Above all, growth with
equity needed to be maintained at all times. While the top
priority in the short run will have to be the provision of
social safety nets through various emergency programmes, in
the medium run, developing countries in the region should
establish an effective and efficient framework for social
protection - something which was overlooked for a
considerable period.
The Commission noted the
continuing challenges posed by inequitable growth and
therefore emphasized the need to promote regional and
subregional cooperation.
The Commission also noted
that despite the rapid growth in the region, the magnitude of
poverty in Asia remained large, with the region being home to
around one billion of the world's poor. Hence, poverty
reduction and its eventual eradication remained the single
most important task facing the region.
The Commission stressed the
role that ESCAP can play in strengthening the spirit of
inter-country cooperation by bringing the countries of the
region together to share their experiences and know-how,
including tripartite forms of cooperation. Indeed, the
presence of countries at several layers of development in
Asia has created ample opportunities for sharing of
experiences.
The Commission emphasized
the importance of measures to protect the environment in
order to promote sustainable development as well as the need
for priority to be accorded to human resources development in
order to promote sustained growth. These are also areas that
the Commission will be concentrating on in the coming years.
Mr President,
I am pleased to inform the
Council that the Commission also endorsed the preparations
for two important forthcoming events, namely the Ministerial
Conference on Space Applications for Sustainable Development
in Asia and the Pacific, which the Government of India has
generously offered to host in New Delhi in November this
year, as well as the Fourth Ministerial Conference on
Environment and Development, which the Government of Japan
has generously offered to host next year.
Mr President,
The Asia-Pacific region has
witnessed the establishment of several subregional
organizations, including the Association of Southeast Asian
Nations, the South Asian Association for Regional
Cooperation, the Economic Cooperation Organization, the
Pacific Community and South Pacific Forum, and the
Bangladesh-India-Myanmar-Sri Lanka-Thailand Economic
Cooperation, or BIMST-EC, as well as several interregional
groupings such as APEC and the Indian Ocean Rim Association
for Regional Cooperation.
Several of these bodies and
groupings are at the fledgling stage and need assistance in
programme development and the execution of specific technical
assistance activities. In that connection, special emphasis
needs to be placed on the promotion of South-South
cooperation as well as on strengthening inter-subregional
cooperation in such fields as human resources development,
trade and infrastructure development and industry.
Indeed, these are also areas
which lend themselves to collective action by the family of
UN organizations. In this regard, I am pleased to report that
in pursuance of Council resolution 1998/46, the Regional
Coordination Meeting at ESCAP was held under the chairmanship
of the Deputy Secretary-General of the United Nations on 2
June 1999. We look forward to working closely with our sister
agencies in following up on the recommendations of the
Regional Coordination Meeting.
Mr President,
I am also pleased to report
that the Regional Hearing for the ESCAP Region in preparation
for the Millennium Assembly next year will be held at the
premises of the United Nations University in Tokyo, with the
generous support of the Government of Japan, in early
September this year.
Mr President,
We are living in exciting,
yet challenging, times as we stand at the threshold of the
twenty-first century. Indeed, we in Asia and the Pacific feel
that we are living in a continuously evolving region. The
vastness and diversity of the region - economically, socially
and culturally - is without comparison. The problems and
potentials are also great. I wish to assure the Council that
the ESCAP secretariat, together with our partners within and
outside the United Nations development system, stand firmly
committed to press on with the urgent tasks of economic
development and social progress in Asia and the Pacific.