Poverty fight gets harder as Asia modernises, say experts

Poverty fight gets harder as Asia modernises, say experts

Manila,9 August 2007 The struggle to lift 600 million Asians out of poverty is becoming harder despite the region’s hectic pace of modernisation, experts told a regional conference here today.

By 2015, Asia is expected to enjoy a 42% share of global economic output but it will still be home to half the world’s poor, most of them living in rural areas, according to the International Food Policy Research Institute (IFPRI).

“It is becoming more difficult to confront poverty in Asia," the research institute’s director-general Joachim von Braun told reporters on the sidelines of the Manila conference.

He said governments were becoming less generous in targetting the poor.

Lawrence Greenwood, vice president of the Asian Development Bank (ADB) which is hosting the gathering, said that even as millions emerge from poverty as Asian economies soar, “we are seeing rising inequality" between poorer rural areas and wealthier urbanites.

The ability of Asian farmers to link up with the global market will become an important factor, he said, as will increasing environmental degradation, climate change and the drive from hydrocarbon-based fuels to ones derived from crops.

Keijiro Otsuka of Japan’s National Graduate Institute for Policy Studies said increased rice and wheat yields from scientific breakthroughs coupled with state investment in the farm sector in the 1970s “triggered the transformation of rural Asian economies by stimulating investments in schooling."

Despite reduced farm sizes from growing populations, people were able to move out of poverty “by diversifying their income away from rice to non-rice crops, livestock, and non-farm sources," said Otsuka.

Otsuka cited long-term household data in rural villages in the Philippines, Thailand, Bangladesh and India.

“The resulting economic growth was the most pro-poor in history and led to the most rapid and widespread reduction in poverty over four decades that has ever been witnessed," said Peter Timmer, a senior fellow of the US think-tank Centre for Global Development.

Non-farm income -- from trading, services, transportation, handicrafts and remittances -- and small-scale manufacturing has risen to outshine agriculture and make up 51% of income in Asia’s rural areas, according to an IFPRI paper.

By contrast, the share of agriculture in the gross domestic product of East Asia and the Pacific fell to just 13% in 2005 from 32% in 1975, the paper added.

IFPRI data show just 614 million Asians now live on less than one dollar a day, from nearly one billion in 1990.

However, progress has been mixed, with the most dramatic improvements seen in China and the rest of East Asia. Now, almost three in four of the region’s poor live in South Asia.