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.
Nobel Prize Winner Malala Talks to VOAi
X
August 31, 2015 2:17 AM
Nobel Peace Prize winner Malala Yousafzai met with VOA's Deewa service in Washington Sunday to talk about women’s rights and unveil a trailer for her new documentary. VOA's Katherine Gypson has more.
Video

Video Nobel Prize Winner Malala Talks to VOA

Nobel Peace Prize winner Malala Yousafzai met with VOA's Deewa service in Washington Sunday to talk about women’s rights and unveil a trailer for her new documentary. VOA's Katherine Gypson has more.
Video

Video War, Drought Threaten Iraq's Marshlands

Iraq's southern wetlands are in crisis. These areas are the spawning ground for Gulf fisheries, a resting place for migrating wildfowl, and source of livelihood for fishermen and herders. Faith Lapidus has more.
Video

Video Colombians Flee Venezuela as Border Crisis Escalates

Hundreds of Colombians have fled Venezuela since last week, amid an escalating border crisis between the two countries. Last week, Venezuelan President Nicolas Maduro ordered the closure of a key border crossing after smugglers injured three Venezuelan soldiers and a civilian. The president also ordered the deportation of Colombians who are in Venezuela illegally. Zlatica Hoke reports.
Video

Video Rebuilding New Orleans' Music Scene

Ten years after Hurricane Katrina inundated New Orleans, threatening to wash away its vibrant musical heritage along with its neighborhoods, the beat goes on. As Bronwyn Benito and Faith Lapidus report, a Musicians' Village is preserving the city's unique sound.
Video

Video In Russia, Auto Industry in Tailspin

Industry insiders say country relies too heavily on imports as inflation cuts too many consumers out of the market. Daniel Schearf has more from Moscow.
Video

Video Scientist Calls Use of Fetal Tissue in Medical Research Essential

An anti-abortion group responsible for secret recordings of workers at a women's health care organization claims the workers shown are offering baby parts for sale, a charge the organization strongly denies. While the selling of fetal tissue is against the law in the United States, abortion and the use of donated fetal tissue for medical research are both legal. VOA’s Julie Taboh reports.
Video

Video Next to Iran, Climate at Forefront of Obama Agenda

President Barack Obama this week announced new initiatives aimed at making it easier for Americans to access renewable energy sources such as solar and wind. Obama is not slowing down when it comes to pushing through climate change measures, an issue he says is the greatest threat to the country’s national security. VOA correspondent Aru Pande has more from the White House.
Video

Video Arctic Draws International Competition for Oil

A new geopolitical “Great Game” is underway in earth’s northernmost region, the Arctic, where Russia has claimed a large area for resource development and President Barack Obama recently approved Shell Oil Company’s test-drilling project in an area under U.S. control. Greg Flakus reports.
Video

Video Philippine Maritime Police: Chinese Fishermen a Threat to Country’s Security

China and the Philippines both claim maritime rights in the South China Sea.  That includes the right to fish in those waters. Jason Strother reports on how the Philippines is catching Chinese nationals it says are illegal poachers. He has the story from Palawan province.
Video

Video China's Spratly Island Building Said to Light Up the Night 'Like A City'

Southeast Asian countries claim China has illegally seized territory in the Spratly islands. It is especially a concern for a Philippine mayor who says Beijing is occupying parts of his municipality. Jason Strother reports from the capital of Palawan province, Puerto Princesa.
Video

Video Ages-old Ice Reveals Secrets of Climate Change

Ice caps don't just exist at the world's poles. There are also tropical ice caps, and the largest sits atop the Peruvian Andes - but it is melting, quickly, and may be gone within the next 20 years. George Putic reports scientists are now rushing to take samples to get at the valuable information about climate change locked in the ice.

VOA Blogs