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Social Development and Poverty

Despite the extraordinary gains made in living standards, hundreds of millions are still excluded from the benefits of rapid economic growth. ADB envisions an Asia and Pacific that is inclusive, where the region's gains and opportunities are shared by all.

Social development: Equitable growth for all

Social development is about achieving equitable and sustainable improvements in the physical, social, and economic well-being of individuals and groups, especially the socially or economically disadvantaged.

ADB and social development

Inclusiveness lies at the heart of all successful poverty relief and development outcomes. ADB's social development agenda involves people and their communities, organizations, institutions, societies, and governments in all poverty relief activities.

The aim is to reduce poverty, inequality, and vulnerability among poor and marginalized persons by enabling institutions to:

  • foster inclusiveness and equitable access to services, resources and opportunities
  • empower people’s participation in social, economic and political life
  • help individuals cope with both chronic or unforeseen and sudden risks

Integrating social dimensions in ADB operations

Social dimensions such as participation, gender and development, social safeguards, and management of social risks are incorporated into the three major processes of ADB operations: country programming, project design, and project implementation.

During the preparation of ADB country partnership strategies, ADB staff work with key government officials to facilitate the participation of NGOs, local communities, business associations, workers' and women’s organizations, indigenous peoples, and other stakeholders.

An initial poverty and social analysis is a prerequisite for all loan and grant-based investment projects and programs. This means potential social issues are addressed during project preparation to ensure that project design maximizes social benefits and avoids or minimizes social risks, particularly for vulnerable and marginalized groups.

ADB staff, government officers, and consultants are guided by the following documents in order to effectively integrate social dimensions into ADB-financed operations:

After project completion, the project performance evaluation assesses the impact of the project on targeted beneficiaries, affected people, and other stakeholders.

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Adapting to Aging Asia and the Pacific

Rapid aging in Asia and the Pacific has put the region at the forefront of one of the most important global demographic trends.

Population Aging in Asia and the Pacific

With longer life expectancies and decreased fertility rates, rapid aging in Asia and the Pacific has put the region at the forefront of one of the most important global demographic trends. By 2050, one in four people in Asia and the Pacific will be over 60 years old. The population of older persons (aged over 60) in the region will triple between 2010 and 2050, reaching close to 1.3 billion people.  In some countries such as the People’s Republic of China, Sri Lanka, Thailand, and Viet Nam, this transition will happen very rapidly, and in others, such as Indonesia, it will not be as quick but they will end up with very large populations of older persons.

This demographic transition will have wide social and economic consequences on the region with implications ranging from the ways cities and communities are built and organized; the delivery and organization of health and social services; work, employment and social security as well as supportive fiscal policies.  Recognizing and maximizing the social and economic contributions of the older population will be required for sustainable development.

Under its long-term corporate strategy, Strategy 2030, ADB will help improve the lives of vulnerable people in Asia and the Pacific, including the region’s aging population. Through its growing health and social protection portfolio, ADB will pay particular attention to the long-term care and health of the region’s aging population and the development of inclusive urban environments. ADB is focused on building a knowledge base and network to disseminate good practices and relevant expertise in Asia and the Pacific to support Developing Member Countries to adapt now and prepare for the future realities of a larger proportion of older people, to support the successful aging across the life-course, and ensure older persons are not left behind in the region’s development.
 Adapting to an Aging Asia and the Pacific

Under its long-term corporate strategy, Strategy 2030, ADB will help improve the lives of vulnerable people in Asia and the Pacific, including the region’s aging population. This will include better infrastructure like mass public transport systems to enhance access of older persons to basic services.

Through its growing health and social protection projects, ADB will pay special attention to the long-term care and health of the region’s aging population. ADB supported several innovations in these sectors, including support for public–private partnerships to expand primary care and elderly care services in Bangladesh and the People’s Republic of China.

ADB helps build a knowledge base and create a knowledge network to disseminate good practices and expertise in Asia and the Pacific in the development of elderly care systems and services, as well as in the identification of potential investments in selected countries. ADB also supports the development of the capacity of developing member country officials and other stakeholders on strategic planning for and implementation of elderly care across multiple sectors, such as health, social protection, urban development, transport, and private sector development. All these efforts are aimed at ensuring that the poor and vulnerable in the Asia and Pacific region, including older people, are not left behind.

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Inclusive Growth and Poverty Reduction

From poverty reduction to inclusive growth

Reducing poverty in Asia and the Pacific, even in countries with relatively high per capita income, remains an unfinished agenda. Despite major progress, the region was home to 326 million people living in extreme poverty (or below the $1.90/day poverty line) in 2013. An additional 915 million people lived above $1.90/day but below $3.20/day. These people are constantly at risk of being pushed back into extreme poverty during economic downturns and other external shocks. In many developing countries, economic inequality has increased in the past decade. Without steps to address these disparities, the risks this trend poses—including social instability—will continue to grow.

Inclusive Growth: ADB’s Development Agenda

ADB’s Strategy 2030 envisions an Asia and Pacific that is inclusive, where the region’s gains and opportunities are shared by all. 

A development strategy anchored in inclusive growth will have two mutually reinforcing strategic focuses. First, high, sustainable growth will create and expand economic opportunities. Second, broader access to these opportunities will ensure that members of society can participate in and benefit from growth. Without proper attention and planning, it will become increasingly difficult for growth to reach the impoverished who remain excluded by circumstance, poor governance, and other market-resistant obstacles. 

ADB’s support for achieving inclusive growth in developing countries includes investment in infrastructure to achieve high sustainable economic progress, connect the poor to markets, and increase their access to basic productive assets. ADB supports investment in education and essential public services, such as water and sanitation, which particularly benefit the poor and women. These investments provide the opportunity for all to improve their standards of living, thereby contributing to economic growth, poverty reduction, and the mitigation of extreme inequalities. 

The majority of the poor in the region, including most of the absolute poor, are women. Women comprise the largest group among those excluded from the benefits of the region’s economic expansion. ADB emphasizes gender equality and the empowerment of women as fundamental elements in achieving inclusive growth. It also works to increase investments aimed at providing women with better access to education and other economic resources, such as credit. 

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Poverty Reduction and Poverty Reduction Funds

ADB remains committed to ending poverty in the region. Poverty reduction has been ADB’s goal since 1999 and an important feature of its planning and operations since its establishment. The extraordinary economic expansion of recent years has made the eradication of income poverty a possibility by 2020. 

This will require continued work to sustain the current high rates of GDP growth per capita, as well as additional effort to ensure that the poor are able to participate in, benefit from, and contribute to the growth process. 

  • ADB’s Enhanced Poverty Reduction Strategy

    ADB’s Enhanced Poverty Reduction emphasizes increased harmonization and alignment of poverty reduction programs among donors and member countries, as well as the fostering of partnerships for poverty reduction. The approach also puts emphasis on managing for development results and capacity development.  The strategy is made up of three pillars: 

    • pro-poor sustainable economic growth 
    • inclusive social development 
    • good governance, which also includes the cross-cutting priorities of environmental sustainability, gender equity, private sector development, and regional cooperation

Poverty Reduction Funds

To promote innovation and support capacity development for poverty reduction in developing member countries, ADB administers special multi-donor poverty funds.

Japan Fund for Poverty Reduction (JFPR)

Japan established the JFPR in May 2000 to provide grants for projects supporting poverty reduction and related social development activities that can add value to projects financed by ADB. In 2010, the JFPR expanded its scope of grant assistance to provide technical assistance grants in addition to project grants.

Poverty Reduction Cooperation Fund (PRF)

The PRF was established in July 2002 to assist ADB in reducing poverty in developing member countries. It supports technical assistance and small-scale pilot investment projects with a contribution of $62 million from Department for International Development (DFID).

Poverty and Environment Fund (PEF)

The PEF is a multi-donor umbrella facility that will promote the mainstreaming of environment objectives in ADB operations and poverty reduction strategies, plans, programs, and projects of developing member countries. The PEF will provide a dedicated source of grant financing for collaborative approaches between ADB, other funding agencies, donors and developing member countries to purposefully address poverty-environment linkages in Asia and the Pacific.

PRC Regional Cooperation and Poverty Reduction Fund

The People's Republic of China (PRC) Regional Cooperation and Poverty Reduction Fund was established in 25 March 2005 to promote regional cooperation as a core component of the agenda to reduce poverty among ADB developing member countries. It focuses on regional initiatives with poverty reduction impact related to economic growth, private sector development, good governance, and regional public goods.

Cooperation Fund in Support of the Formulation and Implementation of National Poverty Reduction Strategies (NPRS)

The fund is an umbrella facility for multiple donors aimed to help mitigate the constraints encountered by many developing country governments when initiating the formulation and implementation of the national poverty reduction strategy (NPRS). The fund will finance a coherent program aimed at assisting selected developing member countries in formulating and implementing their NPRSs, while enhancing ADB’s added value in this area.

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Social Protection and Labor

Social protection is central to ADB's inclusive growth agenda. ADB defines social protection as a "set of policies and programs designed to reduce poverty and vulnerability by promoting efficient labor markets, diminishing people’s exposure to risks, and enhancing their capacity to protect themselves against hazards and interruption/loss of income."

Social assistance programs help ensure income security and access to basic services for poor and vulnerable populations. Key sectors that may serve as entry points for social assistance programs include education, finance, health and public sector management.

Social assistance interventions may include:

  • Cash transfers (conditional and unconditional)
  • Social pensions
  • In-kind transfers, such as food-for-work, school feeding programs, etc.
  • Asset transfers
  • Scholarships

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Social insurance programs mitigate risks by providing income support in the event of illness, disability, work injury, maternity, unemployment, old age, and death. Key sectors that may serve as entry points for strengthening sustainable social insurance schemes include financial sector development, health, and public sector management.

Social insurance programs may include:

  • Pensions, social security systems, provident funds
  • Health insurance
  • Micro-insurance, small-farmer agricultural insurance, weather index-based crop insurance
  • Unemployment insurance

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Labor market programs support the development of job-relevant skills and workers' retraining, particularly the low-skilled and marginalized. They also facilitate employment. Key sectors that may serve as entry points for promoting and expanding labor market programs include education and infrastructure (energy, information and communication technology, water, and transport).

Labor market programs may include:

  • Active labor market policies and programs (pre-employment training, skills development and upgrading, public works, matching supply and demand for labor)
  • Passive labor market policies and programs (compliance with core labor standards, job security provisions, improving working conditions)

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Human Mobility and Migration

The Asia and the Pacific region is home to a growing number of migrants moving from their communities to others in the same country or to other countries. Migration can be a powerful contributor to economic and social development. At the same time, migration can add to overcrowding in cities, strain social cohesion in migrant receiving areas, and be tied up with human trafficking.

Greater connectivity between and among countries has promoted human mobility within the region. Migrants can bring needed labor skills, trading networks, and an entrepreneurial spirit to destination communities. Migrants also send remittances to their places of origin, providing financial resources that can reduce poverty and be used for productive purposes.  ADB supports its developing member countries to facilitate human mobility while maximizing its benefits.

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Graduation Approach

The graduation approach is an innovative, holistic and proven approach to addressing remaining poverty and reducing inequality, Strategy 2030's first operational priority. Combining targeted social assistance with technical and life skills training, financial inclusion, and coaching and mentoring, the comprehensive set of sequenced interventions called the graduation approach includes a productive asset transfer, temporary cash transfers, technical training, home visits for coaching and support, access to a savings account, behavior change communication, and referral to health services.

The term “graduation” is often misunderstood. It does not refer to reaching a monetary threshold such as a national or international poverty line. Rather, the graduation approach takes a multidimensional view of poverty. “Graduation” is always context-specific and implies reaching a situation where a household has an economically viable livelihood, is food secure, and is connected to essential services.

Also called cash plus programming, economic inclusion, or social protection for employment, the graduation approach promotes economic opportunities and social inclusion to give the poor and vulnerable a big push toward sustainable livelihoods and resilience.

Governments, nongovernmental organizations, and research institutes have implemented nearly 100 graduation-type programs in 43 countries, with ample evidence of their effectiveness.

ADB is financing ongoing initiatives in Pakistan and the Philippines, and will also test it in the context of a large-scale resettlement and income restoration effort.

Publications

  • Testing the Graduation Approach in the Philippines
    Publication | Apr 2020

    Testing the Graduation Approach in the Philippines

    Drawing on the Philippines as a case study, this brief explores how effective the graduation approach is in reducing poverty and assesses opportunities to apply it in other developing member countries.

  • Unlocking Innovation for Development
    Publication | Feb 2020

    Unlocking Innovation for Development

    This report examines ADB’s Unlocking Innovation for Development technical assistance project and highlights lessons learned from activities and pilot projects it has funded.

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