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