Economic and Social Survey of Asia and the Pacific

2412-0979 (online)
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The Economic and Social Survey of Asia and the Pacific monitors regional progress, provides cutting-edge analyses and guides policy discussion on the current and emerging socio-economic issues and policy challenges to support inclusive and sustainable development in the region. Since 1957, the Survey has also contained a study or studies focusing on a significant aspect or challenge relevant to the economies of Asia and the Pacific region.
Economic and Social Survey of Asia and the Far East 1966

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31 Dec 1966
9789210599269 (PDF)

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This latest edition of the Survey analyzes current economic and social developments in the region against the background of events in the world economy. It also focuses on the serios problems of growth and transformation of the area's least developed and Pacific Island developing economies.

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  • Introduction

    The economic performance of the developing countries in the ECAFE region as a whole during the period 1960-1965 was far from satisfactory. Not only did their economic growth, especially on a per capita basis, lag behind that of the other developing regions of the world, but the trend of the rate of growth in the first half of the present decade also tended to be somewhat lower than that achieved during the second half of the 1950’s. In particular, the year 1965 was the worst from the regional point of view; the annual rate of economic growth for the developing ECAFE region dropped to as low as 1.9 per cent, representing a decline of per capita income by one half of one per cent.

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  • Expand / Collapse Hide / Show all Abstracts Aspects of the finance of development

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    • Domestic resources: Savings and financing

      Development require the application of resources to capital formation and to the maintenance and expansion of services such as education, administration and research. The question as to the balance which is to be maintained between non-investment and investment expenditures where the former are primarily a charge on the state, points immediately to the dual aspect of the problem of raising resources: deciding upon the level of resources that might in principle be used to raise future income and consumption, and the location of these resources in the economy. Given the basic ignorance about how to raise the level, policy is heavily oriented towards transferring resources. Correct orientation is not synonymous with success in achieving the ultimate object of raising and distributing resources or with an energetic development and operation of the suitable fiscal and monetary mechanism.

    • Foreign resources

      In the trivial sense of an accounting identity, net foreign resource inflows, being the counterpart of a deficit in the balance of payments on current account, must equal the difference between domestic capital formation and domestic saving. While this says nothing of interest about the role of foreign resources in the process of economic development, it is a convenient starting point for a quantitative description of recent trends of foreign resource flows into developing Asia.

    • Monetary policy in the finance of development

      A leading issue in the finance of development, and one that is bringing several countries of the region to the cross-roads of fundamental decisions, concerns the interaction between growth and stability: the areas of consistency and the points of conflict. It is known to have exercised a major influence in the discussions between donors and aid-receiving countries, and is a primary concern of monetary and planning authorities within the latter. Central banks in developing countries perform two basic functions: one is to provide finance for development and the other is to stabilize the economy. The present chapter concentrates on the second of these and discusses the strategy of monetary expansion. The dangers of inflationary finance to the internal allocation of resources and to the external balance are well recognized in the statutory background of central banks in the region. On the other hand, the institutional and structural setting in developing economies limits both the mobilization of voluntary savings and the scope for taxation and has led to a frequent resort to central banks for the finance of deficits.

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  • Expand / Collapse Hide / Show all Abstracts Current economic development

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    • Economic growth

      During the period 1960-1965, not only did the economic growth of the developing ECAFE region lag behind that of Latin America and West Asia, but also its rate of growth tended to decline, as evidenced by the fact that its annual growth rate of 3.9 per cent in 1960-1965 was slightly below its annual growth rate in 1955-1960. This situation was brought about in particular by the slow growth of Ceylon, India and Indonesia, and also by the decline in the annual growth rate of Burma, Cambodia and Iran during 1960-1965 as compared with the preceding five years. Despite this dismal note, however, there is some cause for optimism if growth possibilities are judged from the past performances of the individual countries mentioned. Ceylon, for instance, had a growth rate of 5.7 per cent in 1960 and 4.1 per cent in 1962; India’s rate was 7.4 per cent in 1960 and 8.2 per cent in 1964; and Indonesia had a rate of growth of 4.1 per cent in 1961 and 5.7 per cent in 1965. These rates show that, under more favourable circumstances and with greater external assistance, these countries can hope to surpass the higher levels of growth they attained in the past, and that, together with the notable growth rates of the Republic of Korea, China (Taiwan), West Malaysia, Thailand and others, the average growth rate of the developing ECAFE region can be raised to 5 per cent or over, as was the case in 1963 and 1964.

    • Developments in agriculture

      During the five-year period 1960/61-1964/65, total agricultural production in the developing countries of the ECAFE region rose annually at an average of approximately 2.4 per cent, while total food production increased at a slower rate by about 2.2 per cent per annum. In 1965/66, however, total agricultural production and total food output suffered a setback, both declining from a year earlier by some 2 per cent. This situation is more alarming when total agricultural production, especially total food output, is considered in relation to population. Between 1960/61 and 1964/65, per capita agricultural production in the aggregate rose annually by only a small fraction, but per capita food output in 1964/65 was lower than the 1960/61 level by 1 per cent, the year when it regained its pre-war level.

    • Industrial developments

      The index of industrial production in the developing ECAFE countries for the first three quar ters of 1966 rose by 5.6 per cent over the corresponding period in 1965. This is slightly more than half the rise of 10.2 per cent during the same period in 1965. This drop in the growth of industrial production could be ascribed mainly to the slackening of industrial activity in India, which was the direct result of the stagnation of agricultural production and the continuing shortage of foreign exchange. In spite of the rapid growth in the other developing countries, India’s low performance accounted for the decline in the figure for the growth rate of the region as a whole, since India’s industrial production represented about half of the total output in the developing ECAFE region.

    • Monetary and financial developments

      During 1966 inflationary tendencies increased in most developing countries of the region. On the one hand, there was a shortfall in agricultural production and consequent slackening in the growth of industrial output. On the other hand, effective demand, particularly in the private sector, expanded rapidly judging by the changes in money supply.

    • External trade

      This is a broad review of the development of the ECAFE region’s trade from 1960 to the second half of 1966 in the context of the United Nations Development Decade. It attempts to depict the ECAFE region’s position in world trade, and the characteristic features of the region’s trade expansion from the points of view of trade balance, terms of trade, and capacity to import. It also analyzes the changes in the direction and composition of trade, the pattern of the region’s intra-regional trade, and explores the ways of promoting intra-regional trade. Since the focus of attention is on the trade problems of the developing ECAFE region, the analysis of the developed ECAFE countries trade is limited to their trade relationships with the developing ECAFE countries.

    • Balance of payments

      In 1966, judging from preliminary figures, most of the developing ECAFE countries experienced similar or greater difficulties in their balance of payments position, compared with earlier years. Undoubtedly by far the most important element in those difficulties was the deficit on commodity trade. In the first half of 1966, most developing ECAFE countries had continuing unfavourable trends in their trade balance. Notable exceptions were India and Pakistan, whose trade deficits were reduced; this partly reflected the reduced availability of foreign assistance and capital. Owing to the size of the trade balance of these two countries, there was a slight improvement in the trade balance of the developing ECAFE countries as a whole for the first half of 1966, as compared with the first half of the previous year. However, data for the third quarter of 1966 indicate that by then the import surplus of the developing ECAFE region was already running at a higher rate than in the corresponding period of 1965.

    • World market conditions for selected primary commodities

      This is an attempt to review the recent world market conditions for seven major primary commodities of the developing ECAFE region from various points of view, such as direction of exports, demand and supply situations and price problems. These commodities are natural rubber, tea, rice, copra and coconut oil, sugar, jute and allied fibres, and raw cotton.

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