BANGKOK -- A panel of the U.N. Economic Commission for Asia and Pacific says exports, which are historically the region’s traditional growth driver, are slowing due to the Eurozone debt crisis and uncertainties in the United States.
UNESCAP's panel has lowered the Asia-Pacific region’s growth outlook to 6.5 percent in 2012, from last year's 7.0 percent, and the U.N. group's Executive Secretary Noeleen Heyzer said new economic drivers are needed in the increasingly uncertain global climate as a means to combat slower growth.
"The old model of development no longer works," she said. "In terms of the new paradigm, we have to address the issues of poverty reduction -- the issues of growing disparities in our region -- but to turn these around as new drivers of growth."
Addressing UNESCAP's ministerial session in Bangkok, Heyzer told delegates from 62 countries that Asia-Pacific growth in recent decades had come at a cost of damage to eco-systems and rising social inequalities.
Thai Foreign Minister Surapong Tovichakchaikul told the commission the issues are timely, given the global economic challenges.
“We believe the driving force for survivability and prosperity lies in our close cooperation: Each of us can contribute to the stability and the prosperity of the region by forging closer regional economic integration," he said. "This will provide enormous economic and social development potentials to our region.”
The 10-member Association of South East Asian Nations is moving to a single market by 2015, opening borders to trade and people at an unprecedented level.
Tommy Koh, Singapore Foreign Ministry Ambassador at Large, said economic integration will boost employment and human welfare, adding that ASEAN’s single market will help meet the challenge of China and India’s growing influence in the region.
"Take, for example, the 10 ASEAN economies [that] cannot compete [individually] with China or India," he said. "But when we integrate into one, we are 600-million interconnected citizens with a very considerable GDP of $1.8 trillion -- we are in a better position to compete with India and China."
But Koh said concerns over the impact of a eurozone downturn are lingering and called for European policy makers to resolve the problems quickly due to the growing threat of a “dampening impact to the world economy”.
A eurozone downturn, he explained, may see Asia’s economic growth rate cut by up to 2.0 percent.
The UNESCAP panel said the region needs to promote seamless regional trade and business links, as well as financial cooperation and a coordinated regional response to risks posed by social and environmental threats.