Asia makes progress but more can be done: WB

Asia makes progress but more can be done: WB

Bernice Han, Agence France-Presse, Singapore

Rapid economic progress in the past two decades has led to a huge reduction in poverty in Asia but there remains a lot more that governments can do to help the poor, a senior World Bank official said.

"In East Asia, the situation of the poor has been improving quite dramatically for a long time," Shantayanan Devarajan, director of development economics at the World Bank, told AFP in a recent interview.

"There was a setback in the late 1990s with the crisis but it seems like even that has now more or less returned to the original path of rapid poverty reduction in places like Indonesia, Thailand and so on," he said, referring to the 1997- 1998 financial crisis that wreaked havoc on the region's economies.

"So both on income poverty and other dimensions of poverty like education and health, the situation has been improving quite substantially... I would say Asia is not doing too badly at all."

Poverty in East Asia declined most rapidly in the 1990s with China an exceptional success, experiencing a decade in which the world's most populated country made the transition from a backward Asian nation into a global economic powerhouse.

"China is actually distinguished as the country that has managed to pull the largest number of people out of poverty," Devarajan said, putting the figure at close to 200 million but giving no details on when the feat was achieved.

Figures from the Washington-based lender showed the number of people living on less than US$1 a day in East Asia and the Pacific fell from 452.4 million in 1990 to 267.1 million in 1998.

In contrast, the number of people living on less than $1 daily in the sub-Saharan Africa region rose from 242.3 million to 301.6 million during the same period, the World Bank website said.

A key factor in Asia's success in poverty reduction lies in the governments' emphasis on economic development and opening the doors for employment opportunities, Devarajan said.

"I think the governments are doing the right thing because what we found out from the experience is that the best thing for reducing poverty is rapid economic growth," he said.

"And that's what these countries are focusing on and that's what they have managed to achieve."

But economic growth by itself is not sufficient to address long-standing problems related to poverty in areas such as education or improving health care access for the poor, Devarajan said.

This is where the state can step up its efforts to remedy the situation, he said.

"Now there are other issues that growth by itself, while it is absolutely essential, may not be enough," Devarajan said.

"For instance, to reduce child mortality... and I think that is where I would like to see the governments do a little bit extra while maintaining the focus on growth."

Also, problems at the so-called next level are already emerging in countries such as Thailand and the Philippines, where the economies have made strong recoveries from the 1997-1998 crisis.

"In areas where we think the problem at least at the basic level has been achieved of primary education and primary health, you are beginning to see problems at the next level," Devarajan said.

"So for instance, in Thailand, there is a problem with secondary education or in the Philippines," he said.

Even in China, the progress achieved in poverty reduction is not as widespread in rural areas, Devarajan said,

"For instance, there are parts of China that have very high poverty and in particular in rural China," he said.