Growth in Asia moderated further to 5.5% in 2012, reflecting continued weakness in import demand in most advanced economies. Aggregate output in Developing Asia decelerated to 6.7%, from 7.8% in the previous year, on the back of dimming global growth prospects and slowing growth, particularly in China – the region’s largest economy – and India. In China, output weakened to 7.8%, mainly due to declining foreign direct investment, rising labor costs and soft domestic demand. Similarly, growth in India slowed to 4.9%, an outcome mainly of stalled investment and deteriorating business sentiment.
The Asia region has met several MDGs ahead of target. These include halving the incidence of poverty, promoting gender equality in education, reducing HIV prevalence and the spread of tuberculosis, halving the proportion of people without access to safe drinking water, and enhancing environmental sustainability. However, rising inequality continues to dampen the impact of the region’s impressive growth performance on poverty reduction, with the Gini coefficient rising in 11 countries that together account for more than 80% of Developing Asia’s population. The region still suffers from high levels of hunger, as well as child and maternal mortality, and is home to the largest number of the world’s absolute poor. It also represents the largest share of energy poor in the world, with a total of 628 million people lacking access to electricity.
OFID supports inclusive growth and development among its Asian partners using all tools and instruments at its disposal. In 2012 alone, more than US$438.6m. was approved in development financing to help generate incomes and raise living standards for millions of poor people in 21 countries. Of this total, US$269m. was provided in public sector financing, the bulk of it ($168m.) to upgrade national road networks and facilitate the movement of freight and people. Some US$80m. was dedicated to enhancing access to energy for the poor.
Through the private sector window, US$65m. was committed to support industry and telecommunications, as well as to bolster the activities of micro-financing organizations in Azerbaijan and Sri Lanka. Additionally, a total of US$95m. was approved under OFID’s Trade Financing Facility, primarily for the import of petroleum products by Lebanon, Pakistan and Turkey.
In terms of grant financing, thirteen countries in the region shared around US$10m. for a wide variety of small-scale initiatives in the areas of energy, agriculture, knowledge and technology transfer, healthcare and emergency relief, as well as several operations in Palestine.