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 High-level Forum on the Social Impact of the Global Economic Recession
Asia is currently affected by the world's most serious recession since the 1930s. It is different from the Asian Financial Crisis in 1998 in several respects. The main difference is that the global recession affects not only the very poor (i.e. those living under the $1.25 poverty line) but particularly those vulnerable to poverty that further global trade is barely the solution to emerging labor markets and growth problems.
According to ADB's Asian Development Outlook 2009 growth in the Asia-Pacific region is expected to decline from 8.6% (average 2004-2007) to 6.3% in 2008 and 3.4% in 2009. As a result, a recent ADB study on the Poverty Impact of the Economic Slowdown estimates that A 3% fall in GDP in Asia over 2007 will result in about 100 million more people below the $1.25 poverty line , plus 31 million below the $2 vulnerability line. The global recession can also have an impact on social spending, gender, heath and education outcomes, social protection, and migration and remittances among others.
Response packages of the Asian governments to the current global recession comprise stimulus packages with an emphasis on investments in infrastructure (mainly large-scale) plus some expansion of social safety nets for the poor. Some experts argue that such packages will not help much the vulnerable near-poor, as infrastructure investments do not provide many jobs because they are capital intensive. Social insurance or social protection programs such as cash for work or conditional cash transfers mostly help the very poor but not the near-poor, vulnerable groups. While fiscal policies are designed to further stimulate economic growth in the region, social implications are barely discussed and information on the social impact of the global recession is weak.
To facilitate knowledge exchange and policy decisions on the impact of the global recession on Asia's poor and vulnerable, ADB - together with ASEAN and other development partners - are preparing for a high-level regional conference on 28-30 September 2009 in Hanoi, Viet Nam. The regional conference is held in conjunction with the upcoming 3rd China-ASEAN Forum on Social Development and Poverty Reduction. The results of this conference will feed into the ASEAN Summit in December 2009 in Bangkok. Thailand. In addition to social sector experts, the conference will also gather finance ministers in the Asia-Pacific region for a special meeting with ADB. Moreover, the environments of the poor will be discussed in a back-to-back seminar.
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PROJECTS
Empowering Indonesia's Communities through Rural Community Infrastructure
A US$50 million loan from the ADB aimed to rehabilitate rural infrastructure in some 1,800 poor and remote villages in East Java, Nusa Tenggara East, South East Sulawesi, and South Sulawesi provinces.
When the project ended in 2008, beneficiary communities rehabilitated about 4,000 km of rural roads, 351 bridges, 23 boat stands, and 365 irrigation systems. They had also established about 550 wells and more than 500 drinking water reservoirs, and constructed 345 communal sanitation facilities. All these helped improve the quality of life of more than 2 million people in over 400,000 households.
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CONTACT US
For suggestions and questions, please contact the Poverty Unit in ADB's Regional and Sustainable Development Department
Email: Poverty-Matters@adb.org |
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As the villagers were part of the process of choosing the infrastructure projects, a sense of ownership and empowerment developed. This gave them the initiative to develop and carry out complementary projects on their own.
Indonesia Combats Malnutrition through Food Fortification
The ADB, through the Japan Fund for Poverty Reduction, will support efforts to reduce iron deficiency anemia (IDA) among Indonesia's poor. A US$2 million grant will help to assess the feasibility, cost, and impact of providing iron-fortified rice under the country's subsidized rice program, RASKIN. It will also support capacity building to produce fortified rice concentrate, provide equipment to rice mills participating in the RASKIN program, and create awareness of the benefits of iron-fortified rice among decision-makers, the private sector and RASKIN recipient households.
Social Security Reform and Economic Modeling Capacity Building (Indonesia)
The Government of Indonesia aims to reduce poverty significantly in 2009, and is dedicated to achieving the Millennium Development Goals by 2015. It recognizes that improved social service delivery and better targeted public expenditure through modern systems of social protection are essential for poverty reduction. In addition to conditional cash transfer schemes targeting the extreme poor, the government introduced a National Social Security System for broader social insurance of its population. An ADB technical assistance project helps finalize the design of the system and strengthen government capacities to anticipate a range of shocks that could have significant poverty, macroeconomic, and fiscal implications for the social protection system.
Improving Rural Health Care Services in the Philippines
A US$50 million loan from the ADB has been approved recently to improve health service delivery in the cities and municipalities outside Metro Manila. Through the Better Health Care Project, the loan will finance the construction of new public health facilities and provide equipment to existing ones, with a particular focus on providers of maternal and child care health services and partnerships with the private sector. The project will also give financial support to small private health providers, e.g., midwifery clinics, diagnostic facilities, and community drug stores, to bring them closer to rural communities. Moreover, it will provide assistance in promoting a more efficient health care delivery system through the outsourcing of services and establishing private insurance schemes.
Strategic Private Sector Partnerships for Urban Poverty Reduction in Metro Manila (STEP-UP)
From 2003 to 2006, the percentage of the Philippines's population living below the poverty line increased from 24.4% to 26.9%. In comparison, poverty incidence in Manila increased from 4.8% to 7.1%.
In Metro Manila alone, more than 1 million people are poor and about 40% of the megacity's population live in slums or similar conditions. Through public-private partnerships, the pilot project's three major components (i.e., business preparedness, creditworthiness for housing improvements and microenterprises, disaster preparedness) aim to reduce urban poverty and improve the living conditions in 23 poor communities of Metro Manila. Private sector companies extended financial and in-kind contributions, as well as business know-how to communities and local government units.
Cutting Chronic Child Malnutrition in Mongolia
A recent survey in Mongolia estimates that 20% of children under the age of five are anemic. A US$2 million project financed through the Japan Fund for Poverty Reduction with ADB helps improve the delivery of nutritious food to at least 35,000 young Mongolian children, mothers, and pregnant women, most of them living in remote communities with high poverty levels. The project also supports awareness campaigns in poor communities and a training program for workers in the primary health care sector.
Clean Urban Transport Affordable for the Poor
Urbanization and the steady increase in the number of private vehicles in the Asia and Pacific region has led to a rapid rise in greenhouse gas emissions, high levels of local pollution, and some of the highest accident rates in the world. These have also affected the poor's mobility: reducing their economic opportunities and income as they cannot afford high transportation costs. A US$2.8 million project preparatory technical assistance grant financed by ADB's Climate Change Fund will help cities in the region design transport systems that are better for the environment and are affordable to the poor. The project will develop - among others - a policy paper to suggest new investment opportunities for a more poverty-oriented urban transport portfolio.
ADB Water Project to Ease the Strain on Women in Lao People's Democratic Republic (Lao PDR)
A US$23 million water supply and sanitation project in Lao PDR focuses on providing safe piped water to 120 villages, addressing health and socio-economic issues. As part of the project, water supply utilities will also undergo capacity building to help them become self-sustaining, while key oversight agencies will be trained to enable them to plan, regulate and manage the water and sanitation sector more effectively.
Women will no longer undergo the burdensome task of water collection and storage. The project will be offering 20 scholarships for female high school graduates to train and work in water supply and environmental engineering. There is also a minimum target for female representatives in the project implementation unit and in village committees, increasing their work and income opportunities.
Improving Living Conditions in Remote Papua New Guinea Communities
A US$2 million grant, administered through the Japan Fund for Poverty Reduction, will be used to rehabilitate access roads and other rural infrastructure in remote roadside communities in the Southern Highlands and Enga provinces of Papua New Guinea. This will boost the economic activities of the remote areas and improve the quality of life of its residents, especially the women, as it will increase mobility and provide better access to social and health services. Moreover, the project will see to the training of at least 400 community members in roadwork and maintenance, literacy, agriculture, as well as home-based and micro-enterprises.
Impact of Maternal and Child Health Private Expenditure on Poverty and Inequity in Southeast Asia and the Pacific
Asia has lower per capita public health expenditure than the poorer Africa. However, out-of-pocket expenditures for catastrophic health care in Asia are a major cause of poverty, especially when it's related to maternal, newborn and child health, where medical expenses can be unexpected and very costly. A technical assistance project of ADB will provide recommendation for policy making and resource allocation on mother and child health programs for Cambodia, Fiji, Laos, Solomon Islands, and Vietnam.
Knowing the impact of out-of-pocket-expenditures on household expenditures, poverty, and inequity would help developing member countries formulate appropriate responses and be aware of the budgetary implications for improving health care equity and access to medical services.
Microinsurance for Bangladesh's Poor
Although micro credit is well-established in Bangladesh, micro insurance, while gaining in popularity, is still a relatively new concept. It is estimated that 93% of the country's total population have no access to insurance services. A $2 million grant from the Japan Fund for Poverty Reduction will develop micro insurance features in Bangladesh, thereby helping to reduce the vulnerability of the poor from sudden losses of income due to health expenditures and asset losses. The money will finance the development of low-cost insurance services to protect the livelihoods of poor households, especially women, from risks such as accidents, illness, theft, and natural disasters. Around 20,000 people in Bangladesh are expected to directly benefit from the project which will provide micro insurance through 20 non-governmental microfinance institutions. The project will also undertake capacity training on micro insurance operations to develop expertise in insurance underwriting, screening, financial management, product development, and marketing.
Other recently approved projects:
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KNOWLEDGE DEVELOPMENT
Poverty Impact of the Economic Slowdown in Developing Asia - Some Scenarios
A recent ADB study from the Economic Research Department estimates that a 3% fall in GDP in Asia over 2007 will result in about 100 million more people below the $1.25 poverty line , plus 31 million more below the $2 vulnerability line. The study provides further evidence and scenarios how the global recession affects poverty in the region.
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Developing Proxy Indicators for Poverty in Indonesia. Project Completion Report
After the 1999 decentralization, the need for timely and routine district information on prices and wages in Indonesia had become more pressing. Current and locally relevant data on the goods and services produced and consumed by the poor are necessary in helping district policymakers and decisionmakers come up with strategies to address the gaps in poverty-related programs and policies, and improve social protection for the poor. |
Asia Must Act Swiftly to Counter Economic Impacts of Aging Population
Asia is set to become the oldest region in the world within decades and will have to take tough policy decisions to help it cope with the huge economic impact of an aging population. In a newly released working paper entitled "Aging in Asia: Trends, Impacts and Responses", ADB notes that Asia's share of the global elderly was 44% in 1950 but is set to rise to 62% by 2050. While the demographic shift is more advanced in developed economies such as Japan; Hong Kong, China; and Singapore, many developing countries in the region are aging at a faster pace. |
Quality of Jobs in the Philippines: Comparing Self-Employment with Wage Employment
This study uses Philippine data from labor force and family income and expenditures surveys to evaluate the shift from self-employment to wage employment. The structure of the Philippines' labor force has been changing: in many sectors, the movement of people from self-employment to wage employment results in higher wages and more stable working relations. However, the change is limited to a few sectors, and casual wage employment in the services sector remains the key policy challenge. The global recession further aggravates the situation by pushing more people back into informal labor markets. |
Social Protection in the People's Republic of China: Experiences and Innovations
The economic downturn will push millions into unemployment and poverty, and it will trap more people in extreme poverty. The opening remarks by Robert Wihtol (ADB Country Director for the PRC Mission) at the International Seminar on Social Assistance in the PRC highlighted that the global economic crisis will not only have a large impact on the income-based measures of poverty but also on Asia's socially vulnerable, threatening their health and nutrition, education, and livelihoods. Beyond the proactive and strong response of the Government, the economic downturn in the PRC poses a particular risk to the poor and lower income groups, who are least able to cope with adverse shocks. |
Asian Development Outlook 2009: Rebalancing Asia's Growth
In the final quarter of 2008, the global economic crisis had reduced Asia's growth to 6.3% from 9.5% in 2007. GDP growth is projected to decline to just 3.4% in 2009. Even the newly industrialized economies of Hong Kong, China; Republic of Korea; Singapore; and Taipei, China, will all likely slow down in 2009, due to their heavy dependence on trade to support growth. The region's sharp decline in growth brings the risk of excessive dependence on external demand. Thus, rebalancing developing Asia's growth toward
domestic sources becomes imperative. Policy makers face the key challenge of formulating the optimal mix of policies for rebalancing external and domestic demand, and this should consider revitalizing the domestic economy and bolstering domestic demand.
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Kyrgyz Housewife Fight Poverty with Needle and Thread
In most Kyrgyz provinces, men and women perform traditional roles. The men farm and gather wool while the women tend the home. While the men are busy outdoors all day, the women, after doing household chores, simply idle the rest of the hours away. With funding from the Japan Fund for Poverty Reduction, ADB supported a capacity building project in Kyrgyzstan that encouraged rural women to maximize their free time. The project assists in providing livelihood opportunities for the women, making use of their skills in making jackets, bags, slippers, and other unique handicraft items from felt and other local materials. Kyrgyz's growing tourism industry is a ready market for their products. |
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TOOLS AND PARTNERSHIPS
ADB LOOKS FOR POVERTY CONSULTANT
ADB has just approved its technical assistance for knowledge networks on poverty reduction and inclusive growth. The project will facilitate working papers and policy briefs, seminars and conferences, and the development of an Asian website on Poverty Reduction and Inclusive Growth, linking up to 70 think tank institutions in the region. In this context, we are looking for an eminent adviser (or team) on poverty reduction (working from home office) to manage and coordinate this project. Interested colleagues may contact: abauer@adb.org. |
County-level Poverty Monitoring in People's Republic of China (PRC)
Efforts in rural poverty reduction in the PRC have been successful for the last 30 years. However, some issues have emerged. One is that in the rural areas, the remaining poor population has become more dispersed in relatively small areas, such as townships and villages, so that tracking and targeting policies to assist them using existing poverty monitoring mechanisms have become more difficult. With ADB assistance, the Government of China piloted poverty monitoring at district (county) level. The government currently discusses using the system for monitoring the impact of the global recession on those migrating back from the cities to the rural areas.
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LOOKING AHEAD
New Projects for the PRC Fund
The next issue of the Poverty Matters Newsletter (May 2009) will have a special feature on the People's Republic of China (PRC) Poverty Reduction and Regional Cooperation Fund (PRC Fund). It will also feature poverty reduction relevant projects of ADB in PRC.
Updates on the Impact of the Global recession on the Poor and Vulnerable in Asia
Each newsletter of the coming months will also provide supplementary information on the forthcoming regional conference in Hanoi, Viet Nam on the "Impact of the Global Recession on the Poor and Vulnerable in Asia," in conjunction with the 3rd China-ASEAN Forum on Social Development and Poverty Education".
Social Impact of the Global Economic Slowdown
Apart from climate change, ADB's major conceptual work in 2009 will focus on the social impact of the global recession on the poor and vulnerable in Asia. In the coming months each issue of the Poverty Matters newsletter will bring feature stories about knowledge work and operational support for poverty reduction and inclusive growth in the context of the crisis.
The next issue of the Poverty Matters Newsletter (May 2009) will have a special feature on the People's Republic of China (PRC) Poverty Reduction and Regional Cooperation Fund (PRC Fund). It will also feature poverty reduction relevant projects of ADB in PRC.
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