THE UN has urged Governments in Asia and the Pacific to raise spending on social programmes to sustain the region’s robust economic recovery and ensure that the benefits of the revived growth trickle down to people most affected by the global financial crisis.

The Economic and Social Survey of Asia and the Pacific 2010 report, an annual publication of ESCAP, provides governments in the Asia-Pacific region, where 62 per cent of the world’s population live with a road map towards a more inclusive and sustainable development path.

According to the survey, even at the height of the economic crisis, Asia and the Pacific was still the fastest-growing region in the world, a trend supported mainly by fiscal stimulus packages made available by the region’s biggest economies.

The economic growth outlook for 2010 has improved significantly, with the region’s developing economies forecast to expand by seven per cent. China will be ahead of the pack with 9.5 per cent growth followed by India’s 8.3 per cent, according to the report.

The survey, however, points out that rising inflationary pressures, especially concerning food products, and asset price bubbles in a number of countries make 2010 a complex year for policy makers who will have to balance sustaining the momentum of growth with financial stability.

While monetary tightening measures may be necessary to restrain inflationary pressures, policymakers must be cautious about withdrawing fiscal stimulus packages lest the fledgling recovery process is disrupted, according to the report.

It also recommends the use of capital controls to moderate short-term capital inflows – the result of a massive expansion of liquidity in Western countries – which have created asset bubbles, inflationary pressures and exchange rate increases in the region’s developing economies.

The report makes a number of regional policy recommendations for inclusive growth, such as strengthening social protection and enhancing financial inclusion.