Effective governance key to improving quality of economic growth

IRNA - Economic growth needs more effective governance in public and private sectors, says United Nations Under-Secretary-General of the United Nations Shamshad Akhtar.

The United Nations official, in an article, highlighted the impact of economic growth in the Asia-Pacific on the world economy and stressed that good governance can guarantee improvement of quality of economic growth.

The full-text of the article according to a press release faxed to IRNA by the United Nations Information Center (UNIC) in Tehran on Wednesday reads as follows:

The Asia-Pacific region’s high and steady economic growth has been an anchor of stability for the struggling world economy in recent years.Developing economies of the region now account for almost a third of global GDP, slightly less than the combined output of the developed economies of North America and Western Europe.

If the region continues to grow at the current pace, it would account for more than a half of world economic output by the year 2050.With its increasing importance, the role of traditional ‘success factors’ such as education, high investment and savings rates, reliance on world markets through exports, is likely to evolve as well.Future economic growth will need to rely more on productivity gains which, in turn, require effective institutions and better governance, in both public and private spheres.

Importantly, the policy focus will have to be more on the quality of economic growth, to cater for social and environmental aspects as well.Decades of rapid Asia-Pacific economic growth have come at a high cost to people and the planet in the form of rising inequalities and environmental degradation.

The bulk of countries in the region still have significant poverty levels, with a heavy concentration of wealth at the top.The majority of its population is not yet “middle class” but rather “transitional class”, and therefore vulnerable to falling back into poverty.Wide income inequality undermines social cohesion, and hurts long-term economic growth by reinforcing inequality of opportunities.