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Growth Not Enough To End Poverty and Deprivation - Study
Asia’s future prosperity will only be assured if countries continue the fight against poverty and other areas of deprivation, and this will require proactive state intervention, not just economic growth, says a new ADB/University of Singapore study.
MANILA, PHILIPPINES—Despite Asia’s rapid growth, vast sections of its population still live in poverty and suffer hunger and other forms of deprivation, which could threaten the sustainability of the region’s growth and its integration, says a new study by the Asian Development Bank (ADB) and the National University of Singapore.
“Asia’s future prosperity will only be assured if countries continue the fight against poverty and other areas of deprivation, and this will require proactive state intervention,” said Kazu Sakai, Director General of ADB’s Strategy and Policy Department. “As the deadline for the Millennium Development Goals (MDGs) looms in 2015, this publication provides a timely reminder of the vast unfinished business in the region and the steps needed to end deprivation across the board.”
Despite a sharp reduction in income poverty in recent decades, a fifth of Asia’s population still lives in extreme poverty. If the highly vulnerable who can easily revert to extreme poverty are included, this figure could rise to one in two. Many countries will likely fall well short of achieving the MDGs in areas such as basic sanitation, underweight children, infant and maternal mortality, while growing income gaps and other forms of inequity are becoming increasingly acute.
The ‘Ending Asian Deprivations’ study, compiled with contributions from 23 Asian development experts, says the number of people being left behind despite the region’s boom shows that past development efforts have not been sufficient to end poverty and deprivation. The study shows that while GDP growth on its own helps reduce income poverty, it plays a much smaller role in reducing other deprivations, like education and health outcomes. The spike in inequality will also impact future economic growth through slower poverty reduction and employment generation.
New approaches may need to be considered to make growth more inclusive and to promote more effective state action in areas such as skills development, delivery of quality education, and incentives for entrepreneurs. These measures must be carried out in conjunction with institutional improvements and stepped-up partnerships with the private sector and civil society. Policymakers will also need to do a lot more to create conditions for more small-and-medium enterprises – a key jobs generator – to flourish, and to reduce the informal sector through actions like improved property rights and access to finance.
Other areas where the state needs to increase support include infrastructure, improving urban environments, social protection programs, and the removal of gender inequities and labor market rigidities to boost employment opportunities. Closer regional cooperation is also crucial, with ADB estimating that the rollout of needed infrastructure for cross border connectivity will deliver benefits equivalent to about $13 trillion for developing Asia in the decade up to 2020 and beyond.
The report says any successful new development approach must have clearly defined goals with a definite timeframe, a credible strategy to achieve them, and a detailed list of public interventions. The MDGs provide an effective base but future development goals also need to incorporate region and country- specific needs. A reasonable time frame for ending deprivations in Asia would be 2025, a decade after the MDGs come to an end.