Many Asians poor despite economic boom
Many Asians poor despite economic boom
By Martin Walker
WASHINGTON: More than two-thirds of the world's poorest people still live in east Asia, despite the economic miracle which has cut the proportion of people in the region subsisting on a dollar a day or less from 60 percent in 1975 to 20 percent, the World Bank reported Wednesday.
In two reports which examine the dark side of east Asia's economic transformation, the World Bank notes that inequality is becoming more widespread, and warned that the region's achievements are at dire risk from the banking crisis now afflicting Thailand and Malaysia.
The sheer pace of growth has sharpened the social problem of the widening gap between rich and poor, suggests the new World Bank report "Everyone's Miracle?"
One of the key features of this inequality is the growing gap in earning power between skilled and unskilled workers in increasingly sophisticated economies. Across Asia, the Bank says, "the rate of increase of demand for skilled workers has outstripped the rate of supply, raising earnings differentials across many occupations".
"The bank salutes the strong growth of the Asian economies in recent years", commented Gautam Kaji, the Bank's managing director for operations. "But we worry about the hundreds of millions of Asians who still live in absolute poverty and who lack the education and other resources that would allow them to take part in the growth process and escape from poverty".
After a stunning period of regional growth which has seen international investors looking for opportunities in Asia rather than considering aid, the Bank says: "There is a consistent pattern of poverty throughout the region, mainly effecting rural and agricultural communities where people typically have little education and few prospects for alternative employment".
The Bank, which has faced sharp criticism from non-government development agencies and environmental groups for its traditional focus on big and prestige projects, is now stressing village- scale rural development, education and health projects. It notes that ninety per cent of the poor in Vietnam and Laos and around two-thirds of the poor in Thailand and Philippines live in rural areas.
Although poverty has been virtually eradicated in the "tiger economies" of Singapore, Hong Kong, Taiwan and South Korea and has declined dramatically elsewhere, the Bank says that as many as 350 millions should still be counted among the poorest of the world's poor. In particular, they are concentrated in the new emerging economies of Cambodia, China, Laos, Mongolia and Vietnam, and in India, where a third of the population is still classified as poor.
"Because of rapid population growth, India's modest success in fighting poverty has been unable to reduce the overall numbers of poor. In 1951, 164 million Indians were living in poverty, compared with 312 million in 1993-94", the bank claims in a separate report, "India: achievements and challenges in reducing poverty'.
"India has not yet achieved the momentum to lift the great majority of its poor into the country's economic mainstream. For example, its infant mortality rates are one of the highest in the world, and a third of India 6-10 year olds are not in school", says Zoubida Allaoua, the Bank's senior economist who wrote the report. "For India, the lessons of the future are clear: promote growth and invest much more money in making people healthier and better educated, and spend more on the physical infrastructure which underpins a country's growth at the local and national level".
If India can maintain the kind of 6 per cent annual GDP growth it enjoyed over the pat three years, the incidence of poverty could drop sharply from 35 percent to barely six percent over the next eight years, he adds. "This would be a tremendous achievement for a country which is home to the largest concentration of poor in the world".
-- The Guardian