Developing nations still at the vanguard of global economic recovery: UN report

Emerging economies remain the driving force behind the world economic recovery, as they are showing strong growth rates, a UN report launched here Wednesday said.

The mid-2011 update of the World Economic Situation and Prospects (WESP) is an overview of the state of the world's economy created with the collaboration of the UN Department of Economic and Social Affairs (DESA), the UN Conference on Trade and Development (UNCTAD) and the five UN regional commissions. The 2011 WESP was released in December 2010, but due to some positive economic changes around the world, its creators saw fit to release a mid year update.

"The main reasons why we've upgraded this are a better than expected performance particular in emerging markets economies but also slightly greater strength of the U.S. economy that has led to upgrading our forecast, but the recovery remains rather uneven," Rob Vos, director of the development policy and analysis division of DESA said at the mid-year report's launch.

The upgraded outlook indicates that world gross product (WGP) is now projected to grow by 3.3 percent in 2011 and 3.6 percent in 2012, a slight improvement over the expectations in December 2010. However, some regions are expected to exhibit greater economic growth than others.

"Clearly in South Asia there is still a strong performance led by China and India and those are the countries that are still keeping up the growth of the global economy," Vos said.

According to WESP, South Asia is projected to average 6.9 percent growth in 2011 and 7.0 percent in 2012, while East Asia will remain the fastest growing region in the world economically with projected 2011 growth of 7.3 percent.

Vos said that unemployment still remains a problem for many countries, although the problem is notably prevalent in developed countries.

"Among the heightened downside risks is that unemployment rates remain high particularly in many of the developed countries but also there's much more longer term unemployment that may be much more difficult to tackle than the short term employment problems and we also see a weakening of the stimulus measures," he said.

The WESP mid-year update provided some key suggestions for curbing the unemployment problem. It said that fiscal policy should redesigned for more sustainable medium and long term growth, including the design of public investments that will alleviate infrastructure bottlenecks.

Jomo Kwame Sundaram, UN assistant-secretary-general for economic development, who joined Vos in presenting the 2011 update report, explained that strengthening international economic cooperation remains essential to dealing with the challenges posed by the world economy.

"In recent times there has been a breakdown of international cooperation and coordination and this has been a recurring theme in the various publications associated with the world economic situation and prospects, which have been coming out for some time, " Sundaram said.

"As you all may remember, part of the reason why the crisis did not deteriorate too badly in 2008 and 2009 and the elements of a recovery came into place fairly early was precisely because of the success of international coordination on a variety of fronts, macroeconomic as well as on trade and other issues which was successfully achieved between the Washington meetings, and the London meeting of the G20 (Group of 20)," he said.

He said that this cooperation is particularly important for many countries that are not G20 members, because they rely on the group for coordination and direction.

"There are now measures which are being taken by certain governments which have very important consequences for their rest of the world and this inability to achieve greater coordination means that many governments are not in a position to deal with some of the consequences of this," he said.

He pointed to the example of increasingly volatile commodity prices, which many believe require greater global attention and coordination.

Source: Xinhua

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