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UN ESCAP Chief: Asia's Economic Recovery Fragile


People try to grab onions being sold by a political party at cheap rates as a mark of protest against the rising prices in Mumbai, India, January 9, 2011 (file photo)

People try to grab onions being sold by a political party at cheap rates as a mark of protest against the rising prices in Mumbai, India, January 9, 2011 (file photo)

The United Nations Economic and Social Commission for Asia and the Pacific warns economic recovery remains fragile because of uncertainties of rising food and oil prices. U.N. Regional Executive Secretary Noeleen Heyzer said governments need to pay attention to the needs of low-income groups, as rising costs push more people into poverty.

Heyzer is warning that rising inflation across Asia already has led to more than 40 million people falling into poverty this year.

Across Asia and the Pacific, more than 600 million people live below the poverty line of less than $1.25 a day.

Higher prices for food and oil, as well as other "external shocks" - such as volatile capital flows from the uncertainties in the Middle East - are undermining economic confidence in Asia Pacific.

"The recovery is fragile and it is uneven, and what we need to do is to make sure that we develop a strategy on how to sustain the recovery and to ensure that recovery is more inclusive," said Heyzer.

Heyzer’s warnings come amid reports by the U.N. Food and Agriculture Organization and World Bank of rising global food prices, with global cereal stocks expected to fall sharply in the current year. She said the region needs to prepare for the impact of new economic shocks.

"External shocks, multiple shocks from food, fuel and finance," said Heyzer. "Even when you look at what is happening in the Middle East - because of the uprising - many of the migrant workers are being sent back and most of them to joblessness, and families dependent on remittance income would fall into poverty."

The International Office of Migration said that since February 20, more than 210,000 migrants have fled the unrest in Libya, most of them natives of Bangladesh.

Heyzer said that along with inflation, capital asset "bubbles" have appeared because of the "money flight" from the Middle East. In markets such as China and Thailand, governments have moved to curb lending and raise interest rates, in a bid to dampen price inflation in areas such as the property market.

She said governments need to ensure recovery is as broad as possible, calling on governments to "rebalance" development strategies with projects designed to reduce poverty.

Heyzer said governments need to give more attention to the needs of lower-income groups and lift investment in social development projects, such as the health sector.

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