Asia says Asia can wipe out poverty by 2025

Asia says Asia can wipe out poverty by 2025

BANGKOK (AFP): Poverty in Asia should largely be eradicated by 2025 as economic growth transforms the lives of the 900 million people who now survive on less a dollar a day, the Asian Development Bank said on Wednesday.

"If developing Asia can continue with its historical trend in economic growth, an ADB study indicates it will be largely free of poverty by 2025," said bank vice-president Myoung-Ho Shin.

At the launch of the bank's annual Outlook report, Shin said that after four decades of rapid development, poverty had become Asia's main social challenge.

Nearly 70 percent of the world's poor live in the region, including 500 million in absolute poverty, according to ADB statistics. By comparison, Sub-Saharan Africa has about 250 million poor people.

"Fundamentally, the ADB believes that promoting economic growth remains the best path to poverty reduction," Shin said, adding that the bank had adopted the issue as its main development objective.

The report slammed ineffective governments in Asia as a leading cause of poverty, saying they had allowed corruption, instability and violence to flourish.

Authoritarian regimes who were not accountable to their people were "likely to be less attentive to the needs of the poor," it said.

"Asia's success in handling its social challenge will depend on the soundness of governance among its nations."

The bank pointed to political instability in Afghanistan and Cambodia and internal conflicts in Sri Lanka and the Philippines as having "a negative impact on the growth process of these economies as well as on their ability to provide public services to the poor."

The bank urged the international community to do more to help the world's worst-off, whose numbers have swelled by 10 million in Asia since financial crisis struck the region in 1997.

Moreover, they were living in the "most polluted and environmentally degraded region in the world."

"Much needs to be done at the international level if the global leadership is serious about eliminating the scourge of poverty," the report said.

It recommended the international community reform global trading so that developing nations can penetrate world markets, and increase the flow of foreign assistance which has declined since the early 1990s.

However, Shin struck a positive note on Asia's outlook, saying its prospects brightened substantially in 1999 when many economies posted large upward revisions to their growth estimates.

Fastest

Asia still boasts the world's fastest economic growth, despite only just emerging from three years of crisis-induced misery, the bank said.

The region posted gross domestic product growth of 6.2 percent in 1999, the ADB said in its annual Outlook report released here.

"The transformation of Asia from financial crisis two years ago to the world's fastest growing region has exceeded all expectations," the report said.

"In terms of industrial production, it took Asia less than two years to return to the pre-crisis level of output."

Asia slumped into a painful financial crisis in 1997 as currency collapses paralyzed corporate and banking sectors across the region, leaving a legacy of mountainous debt.

The report put the encouraging growth figures down to a boom in exports due primarily to a pick-up in global demand for electronics, bringing a windfall to the Asian components industry.

In the second half of 1999, the momentum was sustained by expansionary policies and the implementation of structural reforms which stimulated regional domestic demand.

Confidence and consumption was also boosted by rising regional stock markets, encouraged by soaring growth and asset prices in the United States and on other world bourses, the report said.

The ADB forecast the region would this year equal its 6.2 percent growth rate in 1999, supported by favorable global sentiment and the expanding electronics industry.

South Korea led the way among countries recovering from crisis, posting growth of 10.7 percent in 1999. Growth in other crisis-hit nations ranged from 0.2 to 5.4 percent.

Hong Kong posted 2.9 percent growth in 1999, largely on the back of increased government spending and rising exports of services, the report said.

China maintained a robust growth rate of 7.9 percent, insulated from the shocks of the global economy by capital controls and a fixed exchange rate, and boosted by increased public spending on infrastructure projects, the bank said.

South Asia also continued its economic emergence, posting growth of 6.2 percent in 1999, the bank said, forecasting the region's GDP expansion would be 4.6 percent in 2000.

It said that although India's industrial sector showed signs of continued improvement, Pakistan's political instability and severe floods in Bangladesh constrained progress.

Central Asia grew by 2.8 percent in 1999 but its progress remains heavily influenced by the chaos in Russia's economy while the Pacific region grew 4.4 percent as momentum built in public sector reform.