priorities in addressing economic and financial shocks: some perspectives from asia-pacific lldcs...

Priorities in addressing economic and financial shocks: Some Perspectives fro

m Asia-Pacific LLDCs

Syed NuruzzamanChief

Countries with Special Needs SectionESCAP

Basic indicators of socio-economic performance of Asian LLDCs

AFG ARM AZE BHU KAZ KYR LAO MON NEP TAJ TUR UZB

GDP, bln US$ 19.2 10.3 63.4 1.7 188.1 5.9 8.3 8.8 18.9 6.5 28.1 45.4

Population, mln 35.3 3.1 9.2 0.7 16.6 5.5 6.3 2.8 30.5 7 5.1 29.3

Population growth annual, %

2.7 0.2 1.2 1.6 1 1.1 1.3 1.5 1.7 1.4 1.2 1.1

Trade-GDP ratio, % 81 71 87 93 77 142 82 149 42 73 123 59

Net FDI inflows, US$ 83 664 4,485 16 13,227 694 301 4,715 94 11 3,187 1,403

Literacy rate 15+, % … 100 100 52.8 … 99 … 97 60 100 100 99

Life expectancy at birth, years

49 74 71 68 67 68 68 69 69 68 65 68

Under 5 mortality rate, 1,000 live births

101 18 45 54 28 31 42 31 48 63 53 49

Maternal mortality rate, 100,000 live births

460 30 43 180 51 71 470 63 170 65 67 28

Economic and financial shocks and the LLDCs

4

External shocks and Coping Capacity

A country’s 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

Pacific Islands excl PNG

South-East Asia

South Asia

Pacific Islands

Africa

Latin America and Caribean

Asia Pacific

LLDCs Asia Pacific

LDCs Asia PacificNorth-Central Asia

excl RUS

0.60

0.65

0.70

0.75

0.80

0.85

0.40 0.45 0.50 0.55 0.60 0.65

Coping Capacity

Exp

osu

re

More exposure to external economic shocks

Less exposure to external economic shocks

Economic Growth: Recent Trends

High trade-GDP ratio

Trade-GDP ratio (%)

0

20

40

60

80

100

120

140

160

AFGARM AZE

BHUKAZ

KYR LAO

MONNEP TA

JTU

RUZB

Exports in GDP

Exports of Goods and Services

0.010.020.030.040.050.060.070.080.0

(% o

f GD

P) 2005

2008

2009

2010

2011

Export growth

Merchandise export growth rate (%)

-50

-40

-30

-20

-10

0

10

20

30

40

50

60

2008 2009 2010 2011

AfghanistanArmeniaAzerbaijanBhutanKazakhstanKyrgyzstanLao PDRMongoliaNepalTajikistanTurkmenistanUzbekistan

Direction of merchandise exports

To From 1990 2011 1990 2011 1990 2011 1990 2011

Afghanistan 17.6 75.6 73.7 13.1 4.4 4.3 3.9 6.4Armenia 4.3 8.2 73.6 64.9 20.7 14.3 0.0 11.0Azerbaijan 22.0 15.0 55.7 70.9 2.6 9.0 19.4 2.1Kazakhstan 57.5 29.6 31.7 52.4 8.9 7.1 0.8 0.9Kyrgyz Republic 41.1 65.7 57.5 27.1 0.5 0.2 0.0 6.8Tajikistan 37.0 60.7 52.8 24.0 2.5 1.2 0.0 7.7Turkmenistan 4.4 74.9 92.0 12.2 3.2 2.5 0.0 7.5Uzbekistan 12.7 63.3 80.6 33.1 0.4 1.0 0.1 2.5Mongolia 31.6 88.5 45.2 4.6 2.4 6.6 0.1 0.1Bhutanc 99.3 97.7 0.6 1.9 0.0 0.2 0.0 0.0Lao PDR 85.2 73.7 11.1 9.6 1.7 2.1 0.0 0.1

Asia Europe

North andCentralAmerica Middle East

(% of total)

Imports of Goods and Services

0.010.020.030.040.050.060.070.080.090.0

100.0

Afghan

istan

Armen

ia

Azerb

aijan

Kazak

hstan

Kyrgyz

Republic

Tajik

istan

Turkm

enist

an

Mongolia

BhutanNepal

(% o

f GD

P)

20052008200920102011

MDG Score Card: ESCAP LLDCs

MDG Goal 1 – Poverty rate

$1.25 poverty rate (%)

0.0

10.020.0

30.0

40.0

50.060.0

70.0

80.0

Afg

hani

stan

Arm

enia

Aze

rbai

jan

Bang

lade

sh

Bhut

an

Kaza

khst

an

Kyrg

yzst

an

Lao

PDR

Mon

golia

Nep

al

Tajik

ista

n

Turk

men

ista

n

Uzb

ekis

tan

Earliest

Latest

Trends in Unemployment

2004 2006 2008 2009 2010 2011Afghanistan 3.4 ... ... ... ... ...Armeniaa 9.6 7.5 6.3 7.0 7.0 6.2Azerbaijanb 8.0 6.6 5.9 5.7 5.6 5.4Kazakhstan 8.4 7.8 6.6 6.6 5.8 5.4Kyrgyz Republic 8.5 8.3 8.2 8.4 8.7 ...Tajikistana 2.0 2.2 2.2 2.0 2.1 2.5Turkmenistan 2.6Uzbekistana 0.4 0.2 0.1 0.2 0.1 0.1Mongolia 3.6 3.2 2.8 3.6 3.6 5.2Bhutan 2.5 3.1 ... 4.0 3.3 3.1Nepald ... ... 2.7 ... ... ...Lao PDR ... ... ... ... ... ...

Global economic crisis could push additional people into extreme poverty

$1.25/day $2/day

2009 with revised economic growth rate 17 mil 21 mil

2010 if economic growth continues 21 mil 25 mil

2010 if economic growth same as 2009 i.e. prolonged crisis

31 mil 36 mil

Slow progress in reducing poverty and hunger

Progress in eradicating extreme poverty and hunger in LLDCs (MDG1)

CountryUS$ 1.25 per day poverty (%) Underweight children

(% under age 5)

Earliest Latest Earliest Latest

AfghanistanArmeniaAzerbaijanBhutanKazakhstanKyrgyzstanLao PDRMongoliaNepalTajikistanTurkmenistanUzbekistan

…17.5 (1996)15.6 (1995)…4.2 (1993)18.6 (1993)55.7 (1992)18.8 (199568.4 (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

Under-5 mortality rate

0

50

100

150

200

250

Afghan

istan

Armen

ia

Azerb

aijan

Bangla

desh

Bhutan

Kazak

hstan

Kyrgyz

stan

Lao P

DR

Mongo

liaNep

al

Tajik

istan

Turkm

enistan

Uzbekis

tan

(per

1,0

00 liv

e bi

rths

)

1990

2010

Goal 4: Reduce child mortality

Infant mortality rate

020406080

100120140160

(per

1,0

00 li

ve b

irth)

1990

2000

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

Thank you