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Unsplash / Bill Oxford

Unsplash / Bill Oxford

On the frontlines of the battle to contain the public health and economic fallouts of the global COVID-19 pandemic, the Asia-Pacific region faces crucial policy choices as it tries to balance short-term responses with the long-term development vision enshrined in the 2030 Agenda for Sustainable Development.

As the global economy reels under the impact of the pandemic, governments are unleashing monetary and fiscal policy firepower to revive stalling growth. Yet, traditional macroeconomic policies to boost GDP growth in the short term do not address long-term development challenges.

Balancing the achievement of material prosperity with the social and environmental pillars of sustainable development has been long overdue in the region where decades of rapid economic growth has been accompanied by rising inequality and taken a heavy toll on the planetary health.

It is easy to overlook long-term sustainability concerns during economic crises. Yet, the slowdown is also a reminder of the importance of building resilience. It should also call into question the premises of the economic growth-centric approach, particularly with the climate emergency on hand.

The Asia-Pacific region stands at a very pivotal moment. The risk of losing all the hard-won progress is immense. Hence, the region needs to ensure that the next phase of its economic transformation is sustainable and maintains a fine balance between achieving higher level of social economic development without transgressing biophysical boundaries. It is also essential that government policies and decision-making are informed by science and evidence.

The growing economic uncertainty is no doubt an impediment to making the transition to a sustainable future. Yet, we cannot delay setting course for a sustainable path in keeping with the United Nations’ call to all stakeholders – Governments, businesses and consumers – to mobilize and accelerate progress towards the 2030 Agenda.

Raising our ambitions beyond economic growth requires policymaking to put people and planet first. Tackling unsustainable production and consumption patterns is a precondition for making economic growth planet friendly. The Asia-Pacific region has regressed the most on this Goal 12 (Responsible Consumption and Production). It targets the core economic activities of production and consumption which are also the main drivers of climate change. Hence, progress on Goal 12 is one of the most cost-efficient and effective paths to economic development that advances the well-being of both planet and people. Resource-efficient production leads to productivity increases with positive effects on value added and, therefore, on workers’ remuneration.

ESCAP estimates that, contrary to the general perception, putting the planet first is affordable for the region where annual subsides for fossil fuel outstrip total investment in renewable energy. Hence, it is time for vested interests in fossil fuels to submit to the need for our healthy planet.

As they tackle the current economic crisis, policymakers need to incorporate sustainability considerations in their short-term stimulus. For instance, environmental concerns were accounted for in the fiscal stimulus packages in the aftermath of the Global Financial Crisis. Eighty per cent of Korea’s $38 billion stimulus package in 2009-2012 was allocated to environment-related areas such as renewable energy, green buildings and transport, water, and waste management. In China, close to 40 per cent of the $586 billion stimulus in 2009-10 was allocated to areas such as energy efficiency, water and waste management.

How do we balance economic growth with social and planetary well-being? Stay tuned for the launch of the Economic and Social Survey of Asia and the Pacific 2020 on April 8, 2020 at 11am Bangkok time to learn more about how the region can make the transition to a sustainable growth path.

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Sweta Saxena
Chief, Macroeconomic Policy and Analysis
Macroeconomic Policy and Financing for Development +66 2 288-1234 [email protected]