How Asia Can Tackle Both Poverty and Inequality
Panelists at Asia Society in Hong Kong discuss some concrete actions that can be taken to address the issue of poverty and financial inclusion in Asia. (1 hr., 17 min.)
Over the past 25 years, the total size of the Asia-Pacific region’s economy has grown by roughly 900 percent, lifting hundreds of millions of people from extreme poverty in the process. But the gains of that growth have been very unevenly distributed, making it more difficult to reach the one-third of the continent’s population still living on less than $1.50 per day.
"The success in Asia is one of poverty reduction,” said Christophe Bahuet, country director of the United Nations Development Program in Indonesia. “It's not one of inequality reduction.”
Bahuet, who was speaking at Asia Society in Hong Kong recently on a panel about economic inclusion in the region, said that there tends to be an “obsession” with raw GDP growth among many countries in Asia. “Quality of growth matters,” he said. “You have many examples of growth that does not reduce poverty. You have growth that doesn't create employment, growth that destroys the environment.”
A. Ramesh Kumar, chairman and managing director of Swarna Pragati Housing Microfinance Pvt. Ltd., said that his native India lags behind much of Latin America and even parts of Africa in terms of addressing inequality. While those places have instituted some concrete educational and social programs to help the underprivileged, he said India has undertaken many “umbrella” programs that looked good on paper but had little real effect. “Experts agree that if specific areas are targeted and very focused programs implemented, they are likely to have better results and greater chances of success,” he said.
He pointed to housing as something that perpetuates the cycle of poverty and inequality, noting that two-thirds of the rural Indian population lack adequate shelter. Because these people don’t have enough to invest upfront in durable homes, they end up pumping much of their earnings into upkeep and repair after damage from natural disasters. “They frequently, after moving above the poverty line, fall back below,” Kumar said, adding that specific targeted initiatives in areas like rural housing, health, hygiene, sanitation, and water could pay huge dividends in poverty and inequality reduction.
Justin Morgan, county director for the poverty alleviation NGO Oxfam in the Philippines, said that inequality isn’t just economic, but also relates to power and risk. He pointed to Typhoon Haiyan, which devastated many Filipino communities in 2013. Large companies like McDonald's were back up and running within about three months, he said, whereas many people further down the economic ladder still have not bounced back three years later. “Those well-off were able to recover far quicker,” he said. “Their level of risk and ability to absorb things was far better.”
In the above video, Bahuet, Kumar, and Morgan discuss approaches that governments, business, and NGOs can take to address poverty and inequality simultaneously, such as higher access to banking, better property rights, infrastructure investment, and educational opportunities.