WB and ADB warn Asian poverty could spark instability

WB and ADB warn Asian poverty could spark instability

MANILA (AFP): Asia's rising poverty could become a source of
political instability in the region, the presidents of the Asian
Development Bank and the World Bank warned on Monday.

"Growing dissatisfaction with inequality threatens social and
political cohesion and casts doubts on the morality of economic
reform, liberalization and globalization," ADB president Tadao
Chino told delegates as he opened a four-day international
conference on combating poverty in Asia and the Pacific.

"Poverty in a world as innovative and resourceful as ours is
unacceptable," he added.

In a statement issued at the conference, World Bank president
James Wolfensohn said "money alone" could not diminish poverty
and that issues like social safety nets and improved
infrastructure as well as better economic and political programs
were needed.

He said the world population would rise to eight billion
within 25 years, and "unless we can deal with the issue of
poverty, there will be no peace in this planet over the next 25
years."

The lenders did not single out any country for criticism.
Forty-three nations and territories sent delegates representing
governments, non-governmental organizations and academic
institutions.

But Shoji Nishimoto of the ADB's strategy and policy
department remarked that "where you have very unequal income
distribution, that country cannot maintain stability."

He said increased globalization could also bring the public's
attention to economic inequality within a country.

"People expect the market to play a fair game and people will
wonder why the (results) are uneven," he said. Chino said that
despite rapid growth in recent decades, two-thirds of the world's
poor live in Asia.

"Poverty is not immutable," he said. "Public policy and action
can alleviate poverty."

He said since that since 1999, the ADB had made poverty
reduction its main priority, stressing that "growth is the most
powerful weapon in the fight against poverty."

However, growth alone was not sufficient and any growth must
be "pro-poor and sustainable" to have an impact on poverty, he
added.

It must be accompanied by social development such as basic
education and measures to eliminate gender discrimination, Chino
said.

Growth must also be accompanied by good administration to
ensure it is not wasted, he added.

The ADB meanwhile said it was close to achieving its objective
of allocating 40 percent of its resources to poverty reduction.

Speaking at the same forum, Hafez Pasha, the UN Development
Program (UNDP) assistant administrator and director for Asia-
Pacific, called for the strengthening of democratic measures and
a review of countries' economic liberalization policies as part
of the effort to alleviate poverty worldwide.

In a veiled reference to the International Monetary Fund (IMF)
policies against fiscal deficits, Pasha said developing countries
should not let "a preoccupation with fiscal deficits" lead to the
adoption of policies that hurt the poor.

Pasha also said the Asian crisis of 1997 showed that trade
liberalization policies combined with ill-timed financial
liberalization could actually worsen poverty.

He said he was not calling for huge fiscal deficits but
remarked that countries could focus on boosting revenues through
better tax collection rather than by cutting spending.

Alleviating poverty requires "much more focus on employment
generation," a "dissolution of assets" as well as "empowerment of
the poor" and "development of democratic institutions" to allow
such empowerment.