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GEO-3: GLOBAL ENVIRONMENT OUTLOOK  
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Economic development

Asia and the Pacific's traditional agricultural economy is losing ground to service industries: during the period 1972-99, agriculture's contribution to GDP fell from 23 to 16 per cent while the contribution of the service industries grew from 43 to 50 per cent

Source: UNEP, Topham Picturepoint

During the past 30 years, countries in the region have striven for economic development and higher standards of living. However, annual GDP growth rates decreased from a high of 9.76 per cent in 1970 to 2.54 per cent in 1999, with a negative growth of -1.04 per cent in 1998 due to the Asian economic crisis (World Bank 2001). Overall, however, between 1972 and 1999 per capita real incomes (measured in US$1995) nearly doubled in Northwest Pacific and East Asia, growing by an average of 2.4 per cent annually (see graph). In South Asia, the growth rate also exceeded 2 per cent (compiled from World Bank 2001). However, growth was very low in the Pacific Islands, and this is consistent with recent studies that indicate a general decline in the standard of living in Pacific island countries (UNESCAP 1999).

Asia and the Pacific accounted for 41.7 per cent of global external debt at US$1 073 977 million in 1999 - a significant burden which has increased more than five-fold from US$189 968 million in 1981 (World Bank 2001).

The economic structure of the region has changed remarkably over the past 30 years, with the importance of agriculture diminishing and the service sector growing. Even in South Asia, the contribution of agriculture to GDP fell from 39 per cent in 1980 to 30 per cent in 1995 while the contribution of the service sector increased from 35 to 41 per cent. (World Bank 1997). These structural changes are also reflected in employment. In 1960, 75 per cent of Asians were employed in agriculture. By 1990 this had fallen to nearer 60 per cent while the share of people working in industry grew from around 15 to 21 per cent (ADB 1997)

In the Pacific, lifestyles have changed from subsistence to cash-driven societies reliant on budgetary assistance. The standard of living for the sub-region's urban dwellers is relatively high when compared with those in other developing countries. However, there are some worrying trends, with indications of rising unemployment, particularly among young people; high drop-out rates from primary schools; low household cash incomes; and a growing incidence of drug abuse and crime (SPC 1998). Many of the small and remote islands of the Pacific have essentially no industry at all, while other countries in the sub-region have small industries related to food or beverage processing, clothing and minor machinery assembly or repair (UNEP 1999).

GDP per capita (US$1995) by sub-region: Asia and the Pacific

Although incomes in Australia and New Zealand dwarf those elsewhere, there has been steady growth in the other sub-regions, except in Central Asia and the South Pacific Islands

Note: data unavailable pre-1984 for Central Asia and pre-1981 for South Asia

Source: estimated from World Bank 2001