The Oxfam briefing paper, “A Different Route: Reimagining the idea of prosperity in Asia”, argued that the continent is home to some of the world’s fastest growing economies. Yet millions of people remain poor, while a handful get richer and richer. Asia needs a development paradigm that leaves no one behind. Excerpts from the paper:
Ka Eva, a woman farmer leader from a small town in Rizal in the Philippines stares helplessly at the huge pile of mangoes slowly rotting under the blazing sun. The cost of transporting her mangoes to the market is higher than what she expects to gain from selling them. Ten years ago, she and other farmers in their barangay planted mango trees with high hopes. They were encouraged by the promise of bigger markets for one of the country’s top agricultural exports, as the country signed free trade agreements with its neighbors in the Association of Southeast Asian Nations (ASEAN) and other countries.
However, bad roads, high transport costs, and the lack of storage and processing facilities and technology prevent her and other farmers from benefitting from their harvest. In 2010, world imports of mango were valued at $1.5bn. However, this provides little comfort to Ka Eva, who cannot find a way to connect to the local market, let alone to international buyers.
In another part of Asia, El Yin, a female worker in Myanmar, sighs as she anticipates the long day ahead. Like most workers in the factory, she has to work 3 to 10 hours overtime every week. El Yin earns a base salary of $1.50 a day, or a total of $40 a month. With overtime pay and benefits, she is able to bring home an average of $3.70 a day, or about $98 per month. Half of her base pay is spent on accommodation, while the rest of her salary is used to support her family.
El Yin is not paid all her overtime wages. She usually receives overtime pay for only two or three hours. She is worried about the impact of the long hours on her health. She is afraid to voice her concerns, because the company might dismiss her. El Yin is one of 300,000 women in Myanmar’s rapidly growing garments industry.
Ka Eva and El Yin are only two of the multitudes of people left behind by Asia’s much vaunted economic growth. Their stories reflect the sad phenomenon of poverty amidst plenty, of people left on the sidelines of Asia’s march to progress. Their stories cast a dark shadow on the region’s impressive economic performance.
Between 1990 and 2010, Asia’s economic output increased at a remarkable annual average of 7 percent per year, while the rest of the world’s economy slowed down. In 2013, the developing region’s economic output expanded by 7 percent. However, this impressive economic performance is taking place alongside high levels of poverty and rising inequality. Inequality in the region between the mid-1990s to the late 2000s has risen by as much as 18 percent, much higher compared with the 10 percent increase in the Gini coefficient of OECD countries.
Although the last two decades saw 650 million people in the region lifted out of poverty, 1.6 billion people continue to live on less than $2 a day. Rising inequality means the gap between the rich and the poor is growing wider and deeper. It means the benefits of economic growth are concentrated towards those with wealth and enjoying higher incomes. It indicates a fundamental unfairness in our economies and reveals that the region’s growth is not pulling people out of poverty at the same rate as the richest individuals accumulate wealth.
The challenge of inclusion and sustainability
Most people agree that rising inequality is a problem. There is a huge body of research and evidence showing why economic growth is not enough to address inequality and poverty. Institutions that typically put a premium on economic growth, such as the Asian Development Bank (ADB), the World Bank, and the International Monetary Fund (IMF), have acknowledged the importance of making growth inclusive. The United Nations Development Program (UNDP) describes inclusive growth as one where poor people are able to participate in and benefit from economic progress. However, in Asia, addressing inequality and multi-generational poverty is not only about promoting economic inclusion.
The growing divide between the rich and the poor presents only one dimension of inequality in the region. Horizontal inequalities – that is, inequalities between different groups of people based on gender, race, ethnicity, geographical location or age – sustain and are sustained by the economic inequality characterizing the region. Marginalized groups face entrenched barriers to escaping poverty.
Discrimination, limited economic opportunities, and exclusion from political processes work together to trap poor people at the bottom of the economic ladder for generations. Asia’s growth is unlikely to benefit the poorest while such systematic exclusion persists.
Additionally, it is impossible to provide long-lasting solutions to inequality and poverty without maintaining the principle of sustainability. Economic models that focus solely on growth without regard for the need to protect the environment and natural resources are akin to killing the proverbial goose that laid golden eggs. In Asia, we see grim reminders of the folly of pursuing economic growth above all else: from murky and heavily polluted rivers water to the thick and toxic air in rapidly developing cities and towns.
The devastating impact of climate change in the region, especially on poor and vulnerable communities, underscores the need for Asia to help find national, regional, as well as global solutions to this problem. At the national level, this involves the pursuit by Asian governments of a development path that reduces greenhouse gas emissions and integrates climate adaptation and disaster risk reduction in national planning processes. Sustainability means current resources are nurtured and not undermined, so that they can continue to provide food, water, healthcare, energy, and livelihoods for present and future generations.
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