No Poverty

The Latin America and the Caribbean (LAC) region has been historically characterised as a region with some of the highest rates of inequality in the world. The richest quintile of the population in the region accounts for some 56 per cent national incomes for instance. The COVID-19 pandemic has now widened the gap. In the wake of closing and suffering businesses incomes have dropped and unemployment has risen with millions of households struggling to get by. Moreover the digital divide — notably the lack of high-speed broadband internet and appropriate digital skills — have prevented many people especially the most vulnerable from working or studying from home during the crisis. In these unprecedented circumstances 22 million more people have fallen below the poverty line in the region returning to 2008 levels.

This report was conceived before the outbreak of the COVID-19 pandemic and produced under the turmoil it brought about. For this reason we are twice grateful to everyone who made it possible.

The study focuses on the economic cost of the Israeli occupation of Area C which accounts for about 60 per cent of the total area of the occupied West Bank. While the occupation also imposes significant restrictions on Palestinian economic activity in Areas A and B it imposes more restrictions in Area C. This report estimates the cost of these additional restrictions on economic activities in Area C outside the settlements. The economic cost is estimated by applying an innovative well-established methodology that uses nighttime luminosity (NTL) captured by satellite sensors over a span of time to estimate levels of economic activity. Occupation fragments the geography and economy of the West Bank disfiguring Areas A and B and C and rendering them like a jigsaw the pieces of which no longer fit together. These areas broken down by a complex multi-layered control system are deprived of much more than their unity. How can the losses entailed by restrictions and territorial fragmentation be assessed? And what is the economic cost of depriving Palestinian producers of Area C the only contiguous part of the West Bank? This study aims to answer both questions by estimating part of this cost.

One of the main value additions of the Survey 2023 is a proposal for an augmented Debt Sustainability Analysis (DSA) approach that duly incorporates SDG investment needs potential socioeconomic and environmental gains government's structural policies that go beyond financial considerations and government's resource mobilization strategies and financial capacity. The Survey 2023 also provides new insights on how to prevent potential public debt crises and resolve public debt distress in order to effectively pursue the SDGs. For example in prevention of public debt crisis governments will need to explore unconventional policy measures such as leveraging the potential of non-tax policy measures and public assets. In resolving public debt distress governments might need to bring the rising number of commercial debt creditors into discussions with the existing institutional investors while fundamental policy actions to enhance fiscal resources are still needed governments will also need to explore unconventional policy measures such as leveraging the potential of non-tax policy measures and public assets amid rising public indebtedness. In resolving public debt distress while the emergence of commercial creditors brings new opportunities as many of them are increasingly mindful about the importance of sustainable development their participation in the existing global debt architecture is virtually missing. At the same time several unconventional SDG-aligned debt relief modalities have recently been proposed. Amid these and other changes in the global and Asia-Pacific debt landscapes and rising public indebtedness in the region it is time to rethink public debt issues in support of the SDGs.

Even before the COVID-19 pandemic the Asia-Pacific region was lagging in its progress towards achieving the Sustainable Development Goals while at the same time facing rising levels of government debt. The average government debt-to-GDP ratio in developing countries in Asia and the Pacific was at an 11-year high of 40.6 per cent in 2019. Driven by large stimulus packages and declining government revenues the pandemic pushed the region’s average level of government debt up to 49.5 per cent of GDP in 2021 with two thirds of regional economies reaching the highest level of such debt since 2008. Several economies are still struggling with double or triple the size of their recent average external debt servicing as high as 10 per cent of GDP in 2022.

Assessments on the risk of public debt distress typically carried out by international financial institutions (IFIs) and credit rating agencies (CRAs) have served various purposes for different stakeholders.

The Economic and Social Survey of Asia and the Pacific is a flagship publication of the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP). Published annually since 1947 the Survey is a valuable companion for policymakers civil society academia other United Nations entities including the United Nations Resident Coordinator offices and other stakeholders in the Asia-Pacific region and provides forward-looking analyses and recommendations on economic conditions and key sustainable development challenges.

Since the Asian financial crisis that began in mid-1997 Asia-Pacific developing countries have relied primarily on a three-pronged strategy of strong economic fundamentals large fiscal and foreign exchange buffers and timely countercyclical interventions for achieving debt prudence and macroeconomic resilience (Posen and Rhee 2013). This strategy proved highly successful during the 2007-2008 global financial crisis wherein Asia and the Pacific weathered the storm relatively smoothly and became the first region in the world to regain economic growth momentum (Park Ramayandi and Shin 2013).