These three threats are not only present at the same time but are also “converging” insofar as they are exerting a compounding impact on both developed and developing economies in the Asia-Pacific region, UN Resident and Humanitarian Coordinator of Nepal Robert Piper said.
“There is a need for comprehensive responses that balance economic, social and environmental considerations, for partial responses will only provide a temporary respite until a new major crisis hits the region”, the UN official said.
A report by ESCAP suggests that growth rates are expected to fall to 3.6 per cent for the developing countries in the Asia-Pacific region and 1.5 per cent for the region’s developed countries.
This would mean further social unrest and instability across the region but can also provide a unique opportunity for developing countries. Nepal is a case in point.
Average growth for Nepal is expected to average 3.7 per cent. In its projection of major macroeconomic indicators, the ESCAP report estimates Nepal’s inflation to drop this year from the current 7.7 per cent.
Under the circumstances countries like Nepal should formulate appropriate fiscal stimuli and extend government leadership in the economy, said Jyoti Prasad Lohani of the Centre for Policy Research and Analysis.
At the present time Nepal’s Maoist government has an opportunity to establish a strong social security system to address the development challenges of the future, Lohani added.
In fact the ESCAP report suggests that the current crisis offers governments in the broader region an opportunity to redirect economic growth towards sustainable and inclusive development.
For this reason the UN commission suggests governments adopt policies that promote regional macroeconomic cooperation, address issues relating to food security and sustainable agriculture, and build social foundations for more resilient societies.