World Economy

Asia-Pacific Region Growing

Asia-Pacific Region GrowingAsia-Pacific Region Growing

Home to an estimated 3.74 billion people, the Asia-Pacific region holds over half the global population, determining to a great extent the level of economic stability, or chaos, in the world.

This year’s edition of the Economic and Social Survey of Asia and the Pacific, the flagship publication of the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), has mostly good news for the region – lauding growth achievement “albeit in a somewhat uneven manner,” Kitty Stapp opined for IPS.

Growth has remained steady – with developing nations in the region showing a slight increase to 5.9 percent growth, up from 5.8 percent last year.

Although China’s growth is expected to fall to seven percent in 2015, India’s growth of 8.1 percent – an increase from 7.4 percent last year – could offset any impacts of its neighbor’s “planned moderation”, while Indonesia, the world’s fourth most populous nation is projected to see growth rise from five to 5.6 percent this year.

 Income Inequality Increased

According to the report, “income inequality has increased […] especially in the major developing countries, particularly in urban areas.” Overall, since the 1990s, the Gini index – a measure of income inequality on a scale of 0-100 – has risen from 33.5 to 37.5 percent for the region as a whole.

And while experts praised the region for halving the number of people living on 1.25 dollars a day, ahead of the 2015 deadline laid out at the launch of the Millennium Development Goals (MDGs) in 2000, a closer look at poverty in the region suggests that there is less to celebrate and far more to tackle.

Estimates prepared by ESCAP in the 2014 Statistical Yearbook for Asia and the Pacific reveal that the number of people in the region living on less than 1.25 dollars a day fell from 52 percent in 1990 to 18 percent in 2011 – a reduction from 1.7 billion to 772 million people.

  Poverty Statistics

The 2014 annual statistical publication of the Asian Development Bank (ADB) takes an even deeper look at poverty statistics in the region, suggesting that the gains made in the past two decades may not be as bright as they seem.

According to the Bank’s sub-regional overview of declining extreme poverty, East Asia drove the drop in numbers with a 48.6-percent decline, followed by a 39-percent drop in Central and West Asia, 31 percent in Southeast Asia and 19 percent in South Asia.

However, the Bank highlighted three reasons for why the conventional 1.25-dollar poverty line is an inadequate measure of the costs required to maintain a minimum living standard by the poor: “Updated consumption data specific to Asia’s poor; the impact of volatile and rising costs associated with food insecurity; and the region’s increasing vulnerability to natural disasters, climate change, economic crises, and other shocks.”

  Inclusive Growth

In addition to poverty, the ESCAP survey broke down major challenges facing each particular sub-region, including “excessive dependence on natural resources and worker remittances for economic growth in North and Central Asia […]; employment and climate-related challenges in Pacific island developing countries […]; macroeconomic imbalances and severe power shortages in South and South-West Asia […]; and weaknesses in infrastructure and skilled labor shortages in South-East Asia.”

Since the financial crisis of 1997, for instance, infrastructure investment in Indonesia, Malaysia, the Philippines, Thailand and Vietnam fell from 38 billion during the year of the crash to 25 billion in 2010.

Infrastructure is desperately needed to improve basic services for the poor, including better transport networks and energy grids.