"World hunger is projected to reach an historic high in 2009 with 1.02 billion people going hungry every day, according to new estimates published by the Food and Agriculture Organization today. The most recent increase in hunger is not the consequence of poor global harvests but is caused by the world economic crisis that has resulted in lower incomes and increased unemployment. This has reduced access to food by the poor, the UN agency said. In Asia and the Pacific, an estimated 642 million people are suffering from chronic hunger.

The urban poor will probably face the most severe problems in coping with the global recession, because lower export demand and reduced foreign direct investment are more likely to hit urban jobs harder. But rural areas will not be spared. Millions of urban migrants will have to return to the countryside, forcing the rural poor to share the burden in many cases."

"In the gloom of the financial crisis, there is still a bright spot for China -- growth in its central, western and even northeastern regions is gathering momentum. But the growth picture is very different in many of the nation's formerly booming coastal areas. According to the National Bureau of Statistics, annualized GDP growth in Guangdong province sank to 5.6 percent in the first quarter, the lowest level in 20 years. In contrast, development in the hinterlands is accelerating. Anhui registered growth of 11.6 percent, Sichuan 10.8 percent and Hubei 10 percent in the first.

The figures indicate that the main driving force of the economy is shifting from south to north and from east to west. Effects of the 4 trillion yuan ($586 billion) stimulus package in central and western regions are taking the lead for recovery, a structural change that will play a critical role as China grapples with the financial crisis."

"The flow of private capital to developing countries, viewed widely as the most crucial input for progress, has collapsed with the global downturn, according to a World Bank report. Flows slumped from $1.2 trillion in 2007 to $707 billion last year to a projected $363 billion this year. The projected figure is only 30 percent of the total amount two years ago.

The East Asia and Pacific region has felt the full brunt of the crisis because of its close trade links with wealthy countries, and because of declining investment as well as a drop in industrial production and of exports. Companies have moved to cut production and investment because of the collapse in exports, and households have curbed consumption amid rising lay-offs and economic uncertainty."

"The Philippine government is preparing to ratify the free-trade agreement it signed as a member of the Association of Southeast Asian Nations (Asean), with the governments of Australia and New Zealand. The AANZFTA was signed by 10 Asean governments and those of Australia and New Zealand, and is expected to come into force by July 1, 2009, provided that New Zealand, Australia, and at least four Asean countries have notified completion of their respective internal requirements to bring the FTA into force by that date.

The FTA envisions a regional common market by 2015, and marks the first time that Australia and New Zealand have been involved jointly in negotiating an FTA with third countries. It was also the first time Asean embarked on comprehensive FTA negotiations covering all sectors, including goods, services, investment and intellectual property, simultaneously."

"Despite stiff resistance from domestic lobbies, trade openness in Bangladesh has been making progress, albeit gradual, for nearly two decades, with the result that total trade -- merchandise exports and imports -- now make up 45 percent of the country's gross domestic product, from under 20 percent in 1990. However, the tone of the recent budget speech on the trade agenda was somber. It acknowledged that trade liberalization would be kept on hold until the economy was out of the woods.

But to see tariffs go up -- and protective tariffs at that -- comes as something of a surprise, as it signifies not a standstill but a reversal of the past slow but sure momentum in the direction of trade openness. Two of the sweeping tariff changes are worth a close examination. One is the reduction of the rate of duty for the class of imports described as basic raw materials. The other sweeping change lies in the imposition of a 5.0% Regulatory Duty on all imports now subject to the top rate of 25% customs duty."

"From a low of 23.6% in FY02, India's savings rate jumped to a record high of nearly 38% in FY08. This fuelled an unprecedented investment boom, raising the demand for all sorts of investment-related goods, cement, metals, commercial vehicles, financial services, equipment & machinery among others. This, in turn, had a multiplier effect on related sectors and India ended up as one of fastest growing economies in the world.

What caused this surge in savings? Between FY02 and FY08, the combined gross saving rate of India Inc and their public sector counterparts jumped from 1.62% of GDP to 13.3%. During the same period, the household sector savings rate remained stagnant at around 24% of the GDP. But there is a danger now lurking in background. Public sector savings is already under the threat of turning negative. If this happens under the weight of rising subsidies and other welfare measures, it will create a huge savings hole at the macro level."

"Thai Prime Minister Abhisit Vejjajiva's government sought Senate approval on Monday for plans to finance part of a 1.43 trillion baht ($61.2 billion) stimulus package to revive the recession-hit economy. The upper house of Parliament will consider an executive decree plus a bill seeking to borrow a total 800 billion baht outside the normal fiscal process to help finance the three-year package.

The package, known as 'Strong Thailand 2012', will cover more than 6,000 development projects. Finance Minister Korn says that the program could lift economic growth by 1.5 percentage points per year. The increased local borrowing, part of which would also be made through commercial bank loans, would raise public sector debt to nearly 60 percent of gross domestic product from about 42 percent now."

"Philippine President Arroyo supports wider cooperation in stabilizing Asia's financial markets, including creating a regional version of the International Monetary Fund, a report said on Sunday. The president was referring to efforts by regional governments and private companies to revitalize the market by issuing bonds denominated in several local currencies.

Arroyo said the idea of establishing an Asian version of the IMF should be the next subject to be studied by the region to strengthen its financial stability. She also praised as a great success the expansion of the Chiang Mai Initiative, a currency swap framework to guard against financial crises."

"Energy-starved Bangladesh has readjusted its clock, bringing forward the country's standard time by one hour, as part of measures to increase use of sun light and reduce electricity consumption. According to Energy Ministry officials, the government expects that 250 megawatt could be saved with the readjustment in the country that faces power shortage of nearly 1,500 MW.

The country switched time from GMT+6 to GMT+7 on Saturday and will continue with the daylight saving measure till October one when the clock will be turned back an hour. Schools and offices began an hour earlier as the country expects a five percent reduction in the national power demand between 7 pm and 8 pm -- the evening peak hour."

"Kazakhstan President Nazarbayev said the country has managed to mobilize $19 billion for economic stabilization program. Priorities in development include the construction industry, metallurgy, oil refining and services, chemistry and pharmaceutics, infrastructure and power.

According to the head of the state, 100% of 261 billion KZT allocated in 2007-09 has been spent for support of small and medium business. 8037 projects have been financed. 191 billion KZT has been allocated for all regions of Kazakhstan for realization of the 'Road Map' project this year."

Please share this e-newsline with others interested in the development of Asia-Pacific.

For questions, comments, complaints please visit our online contact form

To change your email address or to unsubscribe from ADBI e-newsline please visit:
http://www.adbi.org/e-newsline/subscribe.php

Sign-up for ADBI's free e-notification service to ensure you receive an e-mail when we post new publications and opportunities.

The stories and links selected and the views expressed in e-Newsline are those of the authors and editors and do not necessarily reflect the views or policies of the ADB Institute. The Institute does not endorse them and accepts no responsibility whatsoever for any consequences of their use. Original name usage is retained in quoted articles, although it may not necessarily follow ADB naming conventions.