A U.N. report on Asia and the Pacific forecasts improved economic prospects for the region, but growth will be modest. India and China are expected to lead the gains. The U.N. Economic and Social Commission for Asia and the Pacific or ESCAP, says the recovery may be slow this year. That could undermine efforts to reduce poverty and could lead to higher unemployment in Asia. The report says many economies suffered setbacks last year because of the recession in the United States. Global economic problems were worsened by September's terror attacks in New York and Washington.
But ESCAP expects 2002 to set a base for recovery for 2003. The report says low interest rates, low energy costs and strong consumer spending will lead the way toward economic growth. ESCAP executive secretary, Kim Hak-Su, says India and China should report the fastest growth, up to seven percent. They avoided the international downturn in information technology. "China and India, the big countries with big populations, still maintain high economic growth. And they are not affected so much from this IT and financial market crisis," he said. "These two countries will maintain relatively high economic growth next couple of years." The report says Bangladesh, Australia, and New Zealand also have been largely immune to the 2001 global slowdown. Many Asian economies are still recovering from the financial crisis of the late 1990s. Mr. Kim says the recovery has been hampered by the slow implementation of needed financial reforms. "Southeast Asia still did not complete the reforms, especially financial sector reform. And also Southeast Asia is linked to the IT development and their economy also led by this information technology," he said. Economies such as Malaysia, Singapore, Taiwan, and South Korea still await recovery in the IT sector. Japan also is still grappling with the collapse of its boom economy a decade ago. Mr. Kim expects better times in 2003, with higher regional and global economic growth.