On November 18th, ISET hosted Principle Economist of Asian Development Bank, Dr. Donghyun Park, who gave a presentation on Inequality, Inclusive Growth, and Fiscal Policy in Asia.
Dr. Donghyun Park discussed how a recent sharp growth in Asia had a positive effect on the reduction of poverty in the region. However, income inequality is still high and in many Asian countries keeps growing. International experience shows that public spending can reduce income inequality. Representative examples of this trend are government expenditures on education and health. By opening more public schools with better educational level, government helps poor portion of population, as rich people always have option to receive good education from expensive private schools.
Dr. Donghyun Park pointed out that in Asia, policymakers traditionally used fiscal policy mainly to support growth rather than fight inequality. However, the recent trend of rising inequality suggests that Asian governments should consider this tool for inclusive growth as well. Dr. Donghyun Park also discussed that Asian governments would face problems with financing fiscal policies using tax revenue, as ageing populations will need greater government expenditures in the future. For now, Asia has a comparatively limited revenue base, however, attention should be paid not on increasing tax rate, but better tax revenue mobilization across all tax categories.
During his presentation, Dr. Donghyun Park introduced the latest ADB book on fiscal policy “Fiscal Policy for Inclusive growth” This book combines a number of background research papers which cover different dimensions of the central issue of how Asian counties can use fiscal policy to foster more inclusive growth.
ISET would like to thank Dr. Donghyun Park for delivering as usual, impressive and very formative presentation.