Comment: Asian growth rebounds – must now focus on broader development goals

As Asia rebounds from the Global Economic Crisis, and resumes rapid economic growth, a big question will be whether Asia will lead the world in achieving the Millennium Development Goals (MDGs) – a set of eight broader development goals for 2015 to which world leaders signed on in 2000 at the United Nations.

At a meeting held in Jakarta on August 2 and 3, Asian ministers and experts discussed the region’s progress and strategies to accelerate it.

Progress on the MDG’s can be described as uneven – some good, some bad and some ugly.

First the good news: Asia has succeeded in the aggregate in reducing poverty since 1990 by some 500 million people. The global crisis of 2008-2009 has halted this progress and may even increase the number of poor by some 30-40 million people. As growth is restored poverty reduction will resume although with a lag and those that fell back into poverty will need greater support to climb back. Asia has also made good progress on education: particularly on enrollment, and quite noteworthy is the increase in girl’s enrollment.

Infant mortality has also declined and helps explain the rise in life expectancy in the region as immunization programs have been successfully rolled out in many parts of Asia. More than half of Asia’s population now have access to safe drinking water. Across the region China, Vietnam, Thailand , Malaysia, Iran, Sri Lanka and some Pacific Island countries as well as Maldives stand out in making the most dramatic progress across a wide range of MDGs.

Now to turn to the bad: much less progress has been made on health indicators such as maternal mortality, as well as on sanitation and environmental goals.

In many countries in Asia well organised health systems – especially in rural areas – do not exist. Even in those that have them, like China and Vietnam, they have deteriorated and out of pocket expenditures have risen to amongst the highest in the world.

Basic sanitation has also not been accorded the highest priority in many parts of Asia leading to greater propensity of health epidemics.

While the carbon foot print per capita in many parts of Asia remains small because of low incomes, the carbon intensity of development in Asia as a whole remains very high and China is now the largest consumer of energy in the world. Degradation of land and water systems also has a worrisome trajectory.

Growth has helped reduce poverty but rising inequality in almost every country in Asia has enhanced social tensions and reduced the potential impact of growth on poverty reduction. Had inequality remained the same as in 1990, another 300 million people could have climbed out of poverty for the same level of growth.

Incomes at the top of the distribution have grown faster than those in the bottom. Though reasons behind rising inequality are complex, some broad themes emerge. First, there has been a relative neglect of the agriculture sector by the development community both at the national and international levels. Second, globalisation processes favour skilled labour against unskilled labour – leading to slower growth of wages among the poor.

In this context, Asian countries that have grown rapidly over a decade, but have not seen substantial reduction in poverty and hunger rates will need to focus specifically on the inclusiveness of their growth strategy.

This is also is the ugly side to the Asia story; which is that of hunger and malnutrition; with almost 600 million people going to bed hungry every day. The irony is that over this period Asia has eliminated the scourge of famines and per capita foodgrain availability has increased, yet hunger affects millions.

Asia’s social assistance programs and food subsidy systems have not succeeded in reaching these hungry people. The massive rise in food prices in 2006-2008 had a hugely disproportionate effect on the poor, with the bottom quintile seeing a decline in purchasing power by 24 percent versus only a decline of 4 percent of purchasing power for the top quintile.

Well targeted conditional cash transfer programs – such as those in Latin America and cash for work programs such as the Mahatma Gandhi Employment Guarantee Program in India could help the hungry get the minimum needed to avoid hunger and keep their children sufficiently nourished.

The resources and political will exist in Asia to fix these problems. As world leaders gather in September at the UN for the MDG Summit there is much to learn from Asia and much to be gained by renewing the political will within Asia to try and accelerate progress on the MDGs.

As growth resumes in Asia the smaller resource rich Asian economies such as Mongolia, Laos, and Papua New Guinea are on the verge of a dramatic increase in their resource base to tackle the MDG’s. The attainment of MDGs offers a good guidepost to ensure that their resource boom does not become a resource curse, because the MDGs offer a much broader yardstick of development than income alone.

In the rapidly growing export led economies of Asia, reducing inequality by ensuring a much more inclusive development strategy, improving social protection for health, old age and natural disasters is vital for ensuring that those who get out of poverty do not fall back into it permanently.

Greater regional integration is vital to ensure that the benefits of rapid growth in the region benefit all. Free trade agreements are stitching together, slowly but gradually, a common market; but pan Asian infrastructure still lags behind and is vital to ensure that prosperity spreads across Asia.

Above all Asia must begin systematically to address social and cultural inequities: gender, caste and ethnic to ensure that not only will huge progress be made to achieve MDGs by 2015 but that an Asian renaissance will be triggered to lead to an Asian century.

Ajay Chhibber is UN Assistant Secretary General, UNDP Assistant Administrator and Director for UNDP’s Regional Bureau for Asia and the Pacific.

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