UN tips faster Asian growth, urges poverty action

Asia-Pacific growth will edge up this year on the back of a recovery in the US and emerging nations, a UN study said Thursday, but it urged governments to take bolder steps to lift millions out of poverty. The Economic and Social Survey of Asia and the Pacific forecast growth in the region to reach 6.0 percent, up from 5.6 percent last year, but still far below the 7.8 percent of 2010-11 and the highs reached before the financial crisis. The report comes days after the International Monetary Fund forecast a slight rise in regional growth, although at a lower rate than previously stated as it warned the global outlook remained fragile. The UN study tipped China, the world's number-two economy and key driver of regional growth, to expand 8 percent in 2013, from 7.8 percent last year, while India is expected to surge 6.4 percent, from 5.0 percent in 2012. "The increase is partly due to an expected improvement in global demand arising from steady, although sub-par, growth in the United States and a limited rebound in the performance of major emerging economies." But with world economies still facing uncertainty, Asia-Pacific nations face a defining moment if they want to meet poverty reduction goals, UN under-secretary general Noeleen Heyzer said. "This is no time for complacency... the need for a more inclusive and sustainable pattern of economic and social development continues to be critical," she said in the report, an annual check-up on regional economies. "As much as the region anchors the global economy, it is still home to more than 800 million people living in extreme poverty, 563 million people undernourished and more than one billion workers in vulnerable employment." With lower growth rates expected to become the "new normal" -- China and India had each achieved average expansion of around double digits before 2008 -- the report urged countries to spend heavily on policies it says could bring hundreds of millions out of poverty, narrow the wealth gap and lift growth. It said developing countries had often achieved stabilisation targets such as low inflation and budget surpluses at the cost of development, for example cutting government expenditure in areas such as education and health. The study said it would cost nations 5-8 percent of GDP to establish a minimum wage, guarantee a set number of working days for the poor and provide universal pensions, healthcare and education by 2030. Failure to act could see more people sink into poverty with economic insecurity, poor infrastructure and "extreme exposure" to climate change-related risks carrying the potential to hamper growth, it added. The survey praised export-reliant Thailand for raising the minimum wage to $10 a day this year, estimating it will marginally boost jobs and growth, while China was also lauded for efforts to rebalance its economy from exports towards more domestic consumption. "The good news is that Asia and the Pacific has already started to rethink and reinvent itself," Heyzer added.