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Development Centre

Environmental hazards in Emerging Asia’s cities are on the rise

 

Economic growth in Emerging Asia, comprised of Southeast Asia, China and India, is showing signs of slowing amid trade tensions. Nonetheless, with domestic demand holding up well, GDP growth rates are projected to remain high at 6.2% in 2019 and 2020. Southeast Asia’s growth is forecast to come in at 4.9% and 5.0%, respectively, according to the OECD Development Centre’s 2019 Update of the Economic Outlook for Southeast Asia, China and India. China’s growth will slow to 6.2% and 6.0%, and India’s growth will remain robust at above 7.0%.

The deepening of trade tensions remains one of prominent risks to the region’s growth potential due to possible trade diversion, changes in global value chains and sharp currency movements. In the near-term, the speed at which Emerging Asian countries can re-allocate their exports will in part determine the impact of the tensions on domestic activity. The Update also notes that monetary authorities have moved to support growth and contain financial market vulnerabilities as inflation pressures in the region generally recede.

In  a special thematic chapter, the Update examines the impact of environment hazards in Emerging Asian cities in the context of rising urbanisation, increasing economic activity and climate change. The report reiterates that high levels of air pollution have serious health consequences, especially among lower-income households, and can curtail economic growth prospects. As such, it advises policymakers in the region to strengthen the enforcement of existing rules, and work towards clearer and targeted policy frameworks with the participation of all levels of subnational governments. Regional co-operation is crucial since environmental hazards are often transborder issues.

Specifically, the report calls for better monitoring of air quality in both large and small cities. It suggests that policies could target transportation, power generation and industry, which are the major sources of urban emissions. There is scope for enhancing enforcement of fuel quality and vehicle emissions standards, implementing scrappage programmes and some form of transportation pricing, expanding renewable energy capacity, reducing energy intensity and tightening the implementation of environmental policies. The report also stresses that policy responses cannot be limited to the local level, calling for clear coordination frameworks involving metropolitan, provincial and central governments to deal with the hazards.

For more information, journalists are invited to contact Kensuke Tanaka, Head of Asia Desk, OECD Development Centre ([email protected]; Tel: +33 (0)6 27 19 05 19) or Bochra Kriout at the OECD Development Centre Press Office ([email protected]; Tel: +33 (0)1 45 24 82 96).

For further information on the Economic Outlook for Southeast Asia, China and India 2019 Update, please visit: www.oecd.org/dev/asia-pacific/.

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About the report

The Economic Outlook for Southeast Asia, China and India 2019 Update is produced by the OECD Development Centre in collaboration with the Economic Research Institute for ASEAN. The report contributes to the OECD Southeast Asia Regional Programme, which aims to foster the mutual learning and the exchange of good practices between policy makers in Southeast Asia and in OECD member countries.

 

 

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