Asian crisis drags 100m into poverty

Asian crisis drags 100m into poverty

BANGKOK (Reuters): Asia's poor are getting poorer.

Beneath the cold statistics and headlines of the Asian crisis, a human disaster is unfolding as millions of unemployed, landless poor and dispossessed fall below the poverty line.

Figures from UN agencies and independent policy researchers show the Asian economic slump has had a devastating impact on the lives of ordinary people.

Thrown out of work from factories or building sites in the region's teeming cities, workers subsist on occasional casual labor or return to a land that can no longer support them.

Without remittances from their pay-packets, families in rural villages are unable to meet basic food needs and risk losing their small-holdings if they are unable to pay the rent.

"Across the region, we are talking about upwards of 100 million people newly impoverished," said Shafiq Dhanani, a consultant to the International Labor Organization (ILO) in the Indonesian capital, Jakarta.

"It is a real human tragedy, a terrible crisis pushing people back into the levels of poverty not seen for 30 years."

Assessing the scale of poverty in Asia is extremely difficult as most governments either provide no regular data on the problem or use their own peculiar systems of measurement.

The only widely accepted measure is one proposed by the World Bank, which sets one U.S. dollar per day per person as the minimum income it considers necessary for a basic existence.

Economists see this as a useful benchmark but say it is far too high for very poor societies such as Indonesia or Bangladesh and far too low for developed nations like South Korea or Taiwan. But the trend from all the statistics is clear.

Since the Asian currency and economic crisis began a year ago, economic activity has slowed across large swathes of Asia, creating mass unemployment and hastening inflation.

Almost everyone has been affected, but the millions living close to the poverty line have suffered worst.

The Indonesian figures are staggering. As much as half the population, or 100 million people, are now unable to buy 2,100 calories of food a day per person, which the ILO sees as the minimum requirement for an Asian diet.

This is an increase of 60 million to 80 million from a year ago and the trend is still rising, it says.

With four-fifths of the international value of the rupiah gone in barely a year, Indonesian inflation has soared, taking even basic commodities beyond the reach of many ordinary people.

The domestic price of rice has tripled, despite government subsidies, and other food imports have slowed to a trickle.

Before the crisis, a building laborer in Java might expect to earn 10,000 rupiah a day and send 100,000 a month back to his family on a small-holding. But with the construction industry almost at a standstill, the family will probably get nothing.

Worse still, the worker may return to his village still in the throes of drought caused by the El Nio weather phenomenon and drain further the family's meager resources.

In Thailand, formerly far richer than Indonesia, poverty is almost as widespread. About a third of Thais live in poverty, says the UN Economic and Social Commission for Asia (ESCAP).

Using the World Bank guide, about 10 percent of Thailand's 60 million people has slipped into poverty since the baht was devalued in July 1997 and the economy moved into recession. As urban unemployment has grown towards three million, rural poverty has deepened as less money is sent home from factory workers, maids, security guards and laborers in the cities.

"In the poor households you already have less savings, less consumption, more health problems and less education. It creates a poverty cycle. With less money, you can't pay for your children's school, or for your mother's healthcare," said Kiran Pyakuryal, chief of rural development at ESCAP in Bangkok.

Asia's other former "Tiger" economies have seen poverty grow gradually but less dramatically as unemployment has crept up. In South Korea, unemployment has reached 7.6 percent of the workforce of 21 million, from around five percent a year ago.

"At present the people manage to persist and many of them can live on small savings, but if the situation continues, they cannot survive," said Shin Myong-ho, of the independent Korea Center for City and Environment Research in Seoul.

"The unemployment rate will continue to rise. The government is afraid the rate will reach eight percent by the end of this year and that rate means social unrest," he said.

The Asian crisis has so far hit the giant populations of China and South Asia less severely than Southeast Asia. But there too, more poverty will follow if the regional recession spreads.

Even in Hong Kong, where unemployment has reached a 15-year high of 4.8 percent, poverty is increasing.

"I definitely think more low-income families will be going under the poverty line because of the economic downturn," said Ho Hei-wah, of Hong Kong's Society for Community Organization.

-- By Chris Johnson