The global economic crisis has wiped out developing Asia's recent gains in poverty eradication as the meltdown is expected to have driven 21 million more people in the region into poverty.
A joint report by the United Nations and the Asian Development Bank shows that the global economic slowdown has slackened trade, slashed export and tourism receipts and raised unemployment levels. This makes it difficult for the region to achieve its Millennium Development Goals (MDGs), which range from halving extreme poverty to halting the spread of HIV and AIDS and providing universal primary education, all by the target date of 2015. “While the slowdown is likely to be felt first in higher unemployment, the effects are likely to ripple through Asia Pacific economies, reducing employment and job creation, and leading to cuts in household and government budgets with eventual consequences for the MDGs in terms of higher levels of poverty and threats to standards of health and education,” according to the report “Achieving the Millennium Development Goals in an Era of Global Uncertainty.” The report, released on Wednesday in Manila, was prepared by the Asian Development Bank (ADB), the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), and the United Nations Development Programme (UNDP).
“Asia, as a whole, has been achieving many of the MDG targets but progress in some countries has been slow,” said Noeleen Heyzer, executive secretary of ESCAP.
Asia Pacific is home to some of the world's fastest growing economies such as China and India, but it is also where some of the world's poor live. In India alone, more than 400 million people are in “extreme poverty”, subsisting on less than $1.25 a day.
Prior to the economic crisis, the region as a whole posted notable gains in its MDG commitments and is on track to achieve three important targets: gender parity in secondary education, ensuring universal access of children to primary school, and halving the proportion of people living in extreme poverty. Between 1990 and 2005, the Asia Pacific region cut the number of people living below the $1.25 a day poverty line from 1.5 billion to 979 million. China led the region's hard — won gains, reducing poverty level from 60 per cent to 16 per cent.
“New poor”
Ms Heyzer said that the global meltdown, which led to massive job losses, has created the “new poor” in the region. The International Labour Organisation estimated that the number of unemployed in Asia may have risen to more than 98 million in 2009. This will raise the unemployment level from 4.7 per cent in 2007 to 5.1 per cent in 2009. Job losses, combined with inadequate social protection, has put more people into poverty. “Without better protection, people fall back into poverty with economic crisis, health pandemics and natural disasters and cannot recover easily, making the achievement of MDGs more difficult,” said Ajay Chhibber, UNDP Regional Director for Asia and the Pacific and U.N. Assistant Secretary-General. Most Asian economies offer social protection such as social insurance schemes. But the joint ADB-U.N. report noted that that across the region, only 20 per cent of the unemployed and underemployed have access to labour market programmes such as unemployment benefits; and only 30 per cent of older people receive pensions. The report said that while Asian governments launched fiscal stimulus packages which kept their economies afloat amidst the recession, a huge chunk of the stimulus went to infrastructure and not on social protection.
The report notes that if fiscal stimulus packages have a strong component of social expenditures, this is likely to produce a double dividend: faster economic growth and accelerating progress towards the MDGs. “Most stimulus measures have focussed on areas other than social expenditures,” said ADB Vice-President Ursula Schaefer-Preuss. - Xinhua
