How Asian financial crisis has affected rural families
How Asian financial crisis has affected rural families
By John Madeley
ROME: In a village on the Indonesia island of Lombok, 45-year old Inak Muli starts work at 6 a.m., making earthen pots. One of a small group of women, her day ends at 1 p.m. the following day. The money that Inak used to make was hardly enough to provide her with decent diet. But then, in late 1997, the Asian financial crisis erupted.
"Since the krismon (the monetary crisis), our situation has become even worse," says Inak, "with the high price of rice and cooking oil and reduced demand for our pots, we eat only one meal a day."
Inak's story is told in a report, The Asian Financial Crisis and the Rural Poor, published by the Rome-based International Fund for Agricultural Development (IFAD), a UN agency that funds projects to help the rural poor.
Inak Muli is not alone. The Asian crisis has been a catastrophe for millions of poor in rural areas -- many of whom had just begun to lift themselves out of poverty.
An IFAD team last year visited some of the projects the agency had funded in Indonesia and Thailand "to learn from the rural poor themselves about the effects of the financial crisis on them".
It found the achievements of these countries in overcoming poverty were in danger of being wiped out. They have been impressive. In Indonesia, the percentage of people living below the poverty line declined from 60 percent in 1970 to 11 per cent in 1996; in Thailand from 57 percent to 13 percent, says the IFAD report.
The crisis is bringing an alarming return to the poverty so recently overcome, it says. In Indonesia, 10 million people have lost their jobs, and poverty increased six-fold between 1996 and the end of 1998.
"So far the most publicized victims of the crisis have been the financial institutions," said Klemens van de Sand, assistant president of IFAD, "while the worst hit are those households who have always been at the margins of society."
There is now less money for health-care budgets, less possibility to treat illnesses, less money for vaccination. Twenty percent of schoolchildren in Indonesia have dropped out of school, and "prices of basic commodities have soared since the crisis intensified," says the report.
In both Indonesia and Thailand, the IFAD team found small- scale farmers, who don't produce all the food their families need, to be among the hardest hit. Prices of agricultural inputs such as seeds have soared, but so also have prices of the basic foodstuffs people buy.
Small-scale artisans, weavers, pot-makers have all suffered because of the drastic decline in demand for their products. "The income of traditional weavers in Indonesia declined by as much as 76 percent," says the report, "and many of them now prefer to work as landless laborers."
Rural families who relied on remittances from relatives working in towns have been badly hit. These remittances accounted for 10 to 15 percent of rural income in Thailand. For many families, such income is a thing of the past.
People who used to have jobs in town are now back in the rural areas. With more mouths to feed, families are now under additional strain. "Women have had to bear the brunt of events," says the report.
There have been some gainers, it points out -- rice farmers, for example, who produce a surplus for the market, have profited from increased prices.
"The Asian financial crisis clearly shows that unless you have solid development in the rural areas, you are going to have problems," said Klemens van de Sand. "Unless you solve long- standing problems of rural poverty, you won't have stability."
Investment in the rural areas is now vital, he believes, "to give people a more secure base for their livelihoods".
-- Observer News Service