News

Report: Rising Income Gap Threatening Stability in Asia

Pedestrians walk past a money exchange outlet in Hong Kong on August 6, 2011.
Pedestrians walk past a money exchange outlet in Hong Kong on August 6, 2011.

A report by the Asian Development Bank says the region's rapid economic growth has created a widening income gap that threatens to undermine its growth and stability.

In its annual economic development outlook, the Manila-based lender says Asia's richest one percent of households account for six to eight percent of total income, while up to 20 percent of total income went to the wealthiest five percent in most countries.  

The ADB report says inequality grew the most in Asia's three largest economies, China, India and Indonesia, from the early 1990s to around 2010.

ADB chief economist Changyong Rhee tells VOA that technological progress, globalization and market-oriented reforms, which have triggered the region's economic transformation, are also the main factors in the growing divide between rich and poor.  

"In the last two decades, technical progress has favored capital over labor, and skilled workers over unskilled workers," says Rhee. "You can easily see that in the 60s and 70s, car factories and steel mills employed lots of people, but if you go these days to the car factories, you see more robots rather than people.  And then globalization and IT technologies and...software technology favors...highly educated people over less educated people.  And the globalization and trade benefits the urban and coastal areas, much more than the inland and the rural areas."

The ABD report says unequal access to education, health and other public services also hinders opportunities for the poor to overcome their economic plight.   School dropout rates are up to five times higher for children in the poorest families, while the infant mortality rate is 10 times higher for poor infants than for babies born into an affluent family.  

Rhee says after witnessing last year's revolts across the Arab world, Asian policymakers understand the urgent need to alleviate the growing income gap.  He says the ADB is encouraging Asian nations to spend more on education and infrastructure, and promote small and medium enterprises.  

Meanwhile, the ADB is forecasting moderate economic growth for developing Asia for 2012, due to the ongoing crisis in the eurozone and weak global demand.  Rhee says this will also affect Asian nations' efforts to reduce the income gap between the rich and poor.

"If the growth is reduced, then government will be very hard to mobilize more revenues, such as tax revenues, which means they cannot rely on more spending, social spending especially, so its very important to keep the growth momentum," says Rhee.

The report says the gross domestic product will expand at a modest 6.9 percent this year, then improve to 7.3 percent in 2013.

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Texas Town Residents Told to 'Just Leave' Ahead of Flood Threati
X
Greg Flakus
May 29, 2015 11:24 PM
Water from heavy rain in eastern and central Texas is now swelling rivers that flow into the Gulf of Mexico, threatening towns along their banks. VOA’s Greg Flakus visited the town of Wharton, southwest of Houston, where the Colorado River is close to cresting.
Video

Video Texas Town Residents Told to 'Just Leave' Ahead of Flood Threat

Water from heavy rain in eastern and central Texas is now swelling rivers that flow into the Gulf of Mexico, threatening towns along their banks. VOA’s Greg Flakus visited the town of Wharton, southwest of Houston, where the Colorado River is close to cresting.
Video

Video New York's One World Trade Center Observatory Opens to Public

From New Jersey to Long Island, from Northern suburbs to the Atlantic Ocean, with all of New York City in-between.  That view became available to the public Friday as the One World Trade Center Observatory opened in New York -- atop the replacement for the buildings destroyed in the September 11, 2001, attacks.  VOA’s Bernard Shusman reports.
Video

Video Seoul Sponsors Korean Unification Fair

With inter-Korean relations deteriorating over the North’s nuclear program, past military provocations and human rights abuses, many Koreans still hold out hope for eventual peaceful re-unification. VOA’s Brian Padden visited a “unification fair” held this week in Seoul, where border communities promoted the benefits of increased cooperation.
Video

Video Purple Door Coffeeshop: Changing Lives One Cup at a Time

For a quarter of his life, Kevin Persons lived on the street. Today, he is working behind the counter of an espresso bar, serving coffee and working to transition off the streets and into a home. Paul Vargas reports for VOA.
Video

Video Modular Robot Getting Closer to Reality

A robot being developed at Carnegie Mellon University has evolved into a multi-legged modular mechanical snake, able to move over rugged surfaces and explore the surroundings. Scientists say such machines could someday help in search and rescue operations. VOA’s George Putic reports.
Video

Video Shanghai Hosts Big Consumer Electronics Show

Electronic gadgets are a huge success in China, judging by the first Asian Consumer Electronics Show, held this week in Shanghai. Over the course of two days, more than 20,000 visitors watched, tested and played with useful and some less-useful electronic devices exhibited by about 200 manufacturers. VOA’s George Putic has more.
Video

Video Forced to Return Home, Afghan Refugees Face Increased Hardship

Undocumented refugees returning to Afghanistan from Pakistan have no jobs, no support system, and no home return to, and international aid agencies say they and the government are overwhelmed and under-resourced. Ayesha Tanzeem has more from Kabul.
Video

Video Britain Makes Controversial Move to Crack Down on Extremism

Britain is moving to tighten controls on extremist rhetoric, even when it does not incite violence or hatred -- a move that some are concerned might unduly restrict basic freedoms. It is an issue many countries are grappling with as extremist groups gain power in the Middle East, fueled in part by donations and fighters from the West. VOA’s Al Pessin reports from London.
Video

Video 3D Printer Makes Replica of Iconic Sports Car

Cars with parts made by 3D printers are already on the road, but engineers are still learning about this new technology. While testing the possibility of printing an entire car, researchers at the U.S. Department of Energy recently created an electric-powered replica of an iconic sports roadster. VOA’s George Putic has more.
Video

Video Al-Shabab Recruitment Drive Still on In Kenya

The al-Shabab militants that have long battled for control of Somalia also have recruited thousands of young people in Kenya, leaving many families disconsolate. Mohammed Yusuf recently visited the Kenyan town of Isiolo, and met with relatives of those recruited, as well as a many who have helped with the recruiting.
Video

Video A Small Oasis on Kabul's Outskirts Provides Relief From Security Tensions

When people in Kabul want to get away from the city and relax, many choose Qargha Lake, a small resort on the outskirts of Kabul. Ayesha Tanzeem visited and talked with people about the precious oasis.
Video

Video Kenyans Lament Losing Sons to al-Shabab

There is agony, fear and lost hope in the Kenyan town of Isiolo, a key target of a new al-Shabab recruitment drive. VOA's Mohammed Yusuf visits Isiolo to speak with families and at least one man who says he was a recruiter.
Video

Video Scientists Say Plankton More Important Than Previously Thought

Tiny ocean creatures called plankton are mostly thought of as food for whales and other large marine animals, but a four-year global study discovered, among other things, that plankton are a major source of oxygen on our planet. VOA’s George Putic reports.
Video

Video Kenya’s Capital Sees Rise in Shisha Parlors

In Kenya, the smoking of shisha, a type of flavored tobacco, is the latest craze. Patrons are flocking to shisha parlors to smoke and socialize. But the practice can be addictive and harmful, though many dabblers may not realize the dangers, according to a new review. Lenny Ruvaga has more on the story for VOA from Nairobi, Kenya.

VOA Blogs