SE Asian poverty levels set to double: World Bank
SE Asian poverty levels set to double: World Bank
BANGKOK (AFP): Poverty is set to more than double in crisis-
hit Southeast Asian countries as income distribution worsens amid
the regional financial crisis, a World Bank expert said on
Thursday.
The numbers of people living under the poverty line in four
crisis-hit countries could soar from 40 million to 90 million as
a direct result of the economic turmoil which began in Thailand
in mid-1997, the expert said.
"The impacts are really very dramatic," World Bank lead
specialist in East Asia, Richard Newfarmer, said in a briefing
for business people and academics here.
He said that under the worst case scenario, the number of
people living in poverty in the Philippines, Thailand, Malaysia
and Indonesia will more than double between 1997 and 2000.
That assumed an overall 10 percent reduction in output over
the three-year period and a 10 percent worsening in inequality of
income distribution, factors which Newfarmer said were possible.
"This underscores the importance in government policy in
protecting lower income groups and ensuring that the
concentration of income or worsening of income distribution
doesn't in fact occur," he said.
He said that even without the expected growing inequality in
income distribution, the number of people living in poverty in
Thailand would rise from nine million to 13 million -- or about
23 percent of the population -- over the period.
Thailand has been one of the countries worst hit by the crisis
and accepted a US$17.2 billion rescue package from the
International Monetary Fund in August last year.
Newfarmer said governments throughout the region had to spend
more on services for lower income earners and job creation
schemes for unskilled workers.
Medium-term reforms such as pension reforms, unemployment
insurance and education investment were becoming even more
"urgent" as the impact of the crisis on the poor became clearer.
"In Indonesia the access to rice has become terribly important
and the government has had to fight assertively to maintain
distribution channels," he said.
School enrollments, meanwhile, have fallen from 78 percent to
54 percent of children in Indonesia since the crisis began.
"This would imply a ripple effect for over a generation
because human capital would be lost and the potential of those
children who are forced to drop out of school ... would be lost,"
he said.
He said the Japanese government's $30 billion stimulus fund
for its troubled Asian neighbors would "go a long way toward
speeding recovery in the region.
But recovery depended on a range of factors including external
events in world markets such as Japan and Latin America.
"The prospect of a world recession is perhaps more likely than
it was six months ago," Newfarmer said.