2 faces of Asia, ultrarich and desperately poor, hound economists

PHILIPPINE policymakers and other developing-country planners must rewrite their economic plans into what the Asian Development Bank (ADB) calls “inclusive growth,” or the scaling down of the gap between the rich and the poor. This, the bank further said, is usually masked by economic advances even in countries like the United States and even more prevalent in underdeveloped nations.

While it is important for developing countries to fight poverty, there is also a need for policymakers to focus on fighting inequality—such as in income and access to employment and social services—that persist in developing countries like the Philippines despite higher-than-expected economic growth or impressive economic growth as in the case of China.

“Developing Asia’s stellar growth rates have masked rising inequality, leading to two faces of Asia—one shining and the other suffering. Merging them will be a development challenge for many years to come. Inclusive growth with its focus on creating economic opportunity and ensuring equal access will play a pivotal role in narrowing the gap,” said ADB economics and research department assistant chief economist Juzhong Zhuang.

Over the past 20 years, the ADB said the region’s per capita gross domestic product (GDP) has increased threefold and halved the percentage of people living in extreme poverty, or less than $1.25 a day.

The ADB said in the book Poverty, Inequality and Inclusive Growth in Asia: Measurement, Policy Issues, and Country Studies, edited by Zhuang, that the finding laid out that no inclusive growth strategy can succeed without the support of the private sector, with initiatives such as public-private partnerships playing a key role in creating productive jobs.

 Today, despite market liberalization and globalization, Asia remains home to two-thirds of the world’s poorest people and little progress has been made on child and maternal mortality rates, and inequalities in income and nonincome indicators continued to widen in many countries, particularly between large urban centers and rural areas.

“Fighting poverty and inequality by focusing public policy on improving delivery of basic health care and education services, especially to the disadvantaged, strengthening social protections and significantly increasing the productive employment opportunities of a wide area of population should be a minimum agenda to which developing Asia’s policy makers must commit,” said Zhuang.

These were some of the findings included in the book, which draws on research carried out by ADB economists and their collaborators.

It looks at recent trends of income and non-income inequality and poverty in the region, discusses the underlying driving forces, examines the concept of inclusive growth, and provides in-depth analysis of key policy pillars of an inclusive-growth strategy including employment, access to public services, social protection, and governance and institutions.

The book notes that many economies in the region, including India and China, recognize the potentially negative social, economic and political consequences of increasing inequality in access to economic opportunity, and are now embracing inclusive growth as the central element of their development plans. –Cai U. Ordinario / Reporter, Businessmirror