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Asia’s rich getting richer, poor getting poorer -- ADB

By Alexander Villafania
INQUIRER.net
First Posted 16:28:00 08/08/2007

Filed Under: Economic Indicators

MANILA, Philippines -- The Asian Development Bank underscored the growing disparity between the rich and poor population of Asia?s growing economies in its recent annual statistical publication called Key Indicators 2007.

The comprehensive report on the socio-economic aspects of Asian countries indicated that despite decreasing rates of destitution, those that are still within the poverty line continue to lag behind in catching up with the region?s rapid development.

The ADB pointed out that relative inequality (proportionate differences in income) and absolute inequality (actual dollar differences in income) have increased in most Asian countries.

The Gini coefficient, a measurement of relative inequality, points a significant rise in Bangladesh, Cambodia, Laos, Nepal, Sri Lanka and even the People?s Republic of China.

The Philippines still has a relatively low Gini coefficient.

Likewise, absolute inequality has increased in almost all countries since the 1990s. The ADB study indicated that most rich people have experienced significant increases in standard of living expenses compared to those in the lower economic level.

This disparity in absolute inequality is also present in the Philippines where the ?bottom 20 percent? (poor) of the population have far lower expenditure than the ?top 20 percent? (rich) of the population.

ADB Chief Economist Ifzal Ali said in a statement that the low growth in incomes of the poor reflect the weakness in the pattern of growth, even in a dynamic and vibrant region as Asia.

The ADB also warned that societies with a concentration of few wealthy people are in danger of policy leverage being captured by the rich for their own benefit, thus weakening the institutional foundations of the growth process.

The ADB report also tried to look into the reasons for economic disparity among societies. Among those noted were the unevenness in income growth in urban and rural societies; differences in growth among sub-national regions; and disparity in education between the rich and the poor.

Likewise, weaknesses and imbalances in government policies were also put to blame. For instance, slow growth in rural incomes had resulted from weakness in public infrastructure investment. New opportunities in urban areas in Asia had also favored highly-educated people, further aggravating the income capacity of the rich and the poor.

While the ADB identified the problem, it also proposed possible solutions that Asian governments could undertake, the first of which was the equal distribution of market-oriented reforms that include skills and training programs for the rich and poor.

The second was the concentrated partnership between the private and public sector that could build industries suitable employment for all sectors of society.

The third and perhaps the most important was for the government to make radical changes in improving the quality of basic health care and education.

The full ADB Key Indicators 2007 may be viewed from the ADB website.



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