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