Progressive tax policies alongside better and effective economic governance can help economies in the region widen inclusiveness and move decisively towards sustainable development, it said.
The high and steady economic growth in Asia-Pacific is led by India and China, according to the Economic and Social Survey of the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
As an year-end update, the survey finds resilient domestic demand and policy support resulting region's developing economies growing at a steady pace of just below 5 per cent despite sluggish global economy and weak trade growth.
External demand is likely to remain weak, with trade
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protectionist measures and sentiments, which are already on the rise, resulting in prolonged weakness in global trade and a drag on productivity growth, Akhtar said.
The report also pointed out rising income inequality arising out of non-translation of output expansion from globalisation and technology in recent years into commensurate rise in decent jobs in a number of Asia-Pacific countries.
"Progressive tax policies can be particularly effective in nurturing a more balanced society and reducing extreme inequalities," Akhtar said.
"The region undergoes further structural transformation, efforts to lift productivity and innovation should be matched by measures to enhance worker skills and social protection," the report said.
Fiscal policy should play proactive role to support domestic demand and meet long term priorities, it said.
Public infrastructure outlays are deemed particularly effective in addressing structural bottlenecks.
It will help in the current environment of weak external demand, weak private investment, low borrowing costs and benign inflationary pressures, according to the survey.