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.