Higher productivity key to Asia-Pacific economic growth

30 Apr '16

4 min read

ESCAP recommends that if the region is to shift to a more sustainable development strategy driven by domestic demand, greater focus must be placed on productivity along with commensurate increases in real wages. According to ESCAP, a productivity-driven, wage-led approach would enable countries to increase their aggregate supply and demand, thereby enhancing well-being.

To boost productivity, the survey recommends a cross-sectoral and integrated approach. It notes that several countries in the region are deindustrializing too early in their development, by shifting from agriculture-based economies to ones in which services play a dominant role.

The survey estimates that a modest increase in agricultural productivity could lift an additional 110 million people out of poverty by 2030, but that improvements in knowledge and skills will be critical, to enable absorption of the large pools of surplus labour that are being released in the rural sector.

Identifying the important role of fiscal policy in reviving economic growth and supporting the 2030 Agenda, Dr. Akhtar emphasized that: “Fiscal initiatives should be underpinned by sustained reforms towards an efficient and fair tax system that delivers the necessary revenues and promotes equity.” (SH)

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