U.N. report has gloomy forecast for South Asia

Press, 9 March 1982, Page 26

U.N. report has gloomy forecast for South Asia

NZPA-Reuter Bangkor

Grinding poverty, slow growth of income, lack of ‘ jobs, and chronic trade deficits continue to blight economic progress in 'South Asia, according to a United Nations survey.The assessment came in a regional survey report prepared by the United Nations Economic and Social Commission for Asia and the Pacific (E.S.C.A.P.) for discussion at the annual E.S.C.A.P. Ministerial conference in Bangkok later this month.

In contrast, the report said, the five member States of the Association of SouthEast Asian Nations (A.S.E.A.N.), plus Burma, Hong Kong, and South Korea, last year maintained strong rates of economic growth in the midst of world recession.

It said that their growth rates ranged from five: per cent in the Philippines to 10 per cent in Hong Kong, while recession' reduced growth rates in industrialised nations to less than 2 per cent.

One increasingly disconcerting aspect of economic success in most of the SouthEast Asian countries was a widening gap between the' rich minority and the majority poor. Countries of-South Asia —

Afghanistan. Bangladesh, Bhutan, India, Nepal, Pakistan, and Sri Lanka — are among the poorest in the world, with per capita incomes ranging from SNZIO2 in Bhutan to SNZ242 in Pakistan. The survey said that low income was compounded by glaring inequalities. The richest 20 per cent took 59 per cent of the total income in Nepal, 49 per cent in India, and 43 per cent in Sri Lanka. The poorest 40 per cent of the population received only 16 to 17 per cent of the gross national product (G.N.P.) in India and Pakistan, and 19 to 20 per cent in Bangladesh and Sri Lanka. Food production had hot kept pace with population growth in Afghanistan, Bangladesh, and Nepal, and was barely in line in India and Pakistan. Even Sri Lanka, with a substantial production increase, had to import a good deal of rice, the report said. Malnutrition was widespread and mass starvation a recurring danger to be avoided only by large imports of cereals. The survey said that an estimated 1.8 million Pakistanis; a similarly large number of Indians, and 50,000 Sri Lankans were working in oilrich Middle East countries, while Bangladesh expected to send 43,600 workers each year. The survey said that another common feature of the economic situation in South Asia was continuous and substantial reliance on foreign aid and borrowings to finance growing balance-of-payments deficits. “Dear oil and domestic inflation have pushed up import bills, and world recession has impeded export growth,” said the survey in summing up South. Asia’s economic woes. On South-East and East Asia, the report said that the countries of the region recorded high growth rates in spite of falling prices of their leading commodities

and greater difficulties in marketing exports of manufactured goods. However,- the. Philippines, Thailand, and South Korea had some problems with balance of external payments and Thailand and South Korea had been forced, to devalue their currencies.; - Inflation, ranging from seven to nine per cent in Singapore and Malaysia and 29 per cent in South Korea, • was also a big problem in all countries except Burma, the survey said. On economic inequalities, the survey said that in the Philippines, with SNZ96O per capita income, 41 per cent of the rural population lived below the official poverty line of SNZ2S6, and, 32 per cent of city dwellers below ?NZ34O. The richest 20 per'cent of the population took 54 to 56 per cent of national household income, it said. On J&va Island, where two thirds ;of Indonesia’s 148 million population are. concentrated, 51 per.cent livedbelow a poverty line of . SNZI2S. per capita. . Thailand had 32 per cent of its 38 million rural population living below SNZI4O-:perA capita and 15 per'cent Of .its urban masses below SNZI47, The situation .-was- riot very' different in South Korea and Malaysia. . The survey said national plans now emphasised eradication of poverty in rural areas.

The report said that following a poor economic performance during 1981, 13 island countries and territories in the South Pacific were gearing towards an’increase in domestic export and production this year.

These 13 members, and associate members of E.S.C.A.P. faced unique problems which, made them “more vulnerable to overseas economic conditions than most other regions,” the report said. It noted that the gross domestic product (G.D.P.) declinedjin 1980 and 1981, while unemployment worsened in

the urban areas. Prospects of increased domestic export and production were brighter for 1982. however.

Pppulation growth ranged from 3 per cent in Vanuatu and Tonga to a low of 1 per cent in Samoa and Tonga. Subsistence agriculture and cash cropping absorbed the bulk of the labour force and, except for Fiji, where industry provided more than a fifth of non-agriculture employment, industrial activities accounted for only 4 to 16 per cent in other island economies.

South Pacific island countries depended heavily on a few primary commodities and, with the exception of sugar, which lifted Fiji’s earnings by more than a third, 1981' was a bad year for the islands as commodity prices slumped. Large-scale replanting had become “mandatory” aS a large number of crops had become unproductive, the report said. Although i there was a marked slow-down in. trade over 1980-1981, imports increased by a' range of-16 to 27 per cent during 1980 in the main islands. ’ 'Of this, food and beverages were the-• principal imports, accounting for a. range of 14 per , cent in the Solomon Islands to 30. per cent in Tonga. . _ . Mineral fuel imports in the same year accounted for 14 to 23 per cent Of-the total. Excess imports increased the balance of payments deficits in all the islands and in Papua. New/ Guinea reduced the normally sizeable trade surplus to a deficit of SNZIOO million in 1980. Transfers and. capital flows, however, allowed Fiji and Tonga to chalk up a surplus while other islands managed only minor deficits. Inflation ranged from 11 per cent in Papua New Guinea to between 25 and 30 per cent for Samoa and Tonga during 1980, following the rising cost of imports, particularly petrol, seasonality of local food crops, and monetary changes, the report said.