INEQUALITY WILL HURT ALL OUR FUTURES
The International Monetary Fund, in a study published late last year, contended that inequality hurts growth in a number of ways. It reduces the education levels of poorer citizens, and saps their health, reducing the potential productivity of a workforce. It can also cause political instability due to anger over income disparities. As we learned during The Arab Spring this leads to a falloff in investment.
ACROSS the 21st century Asian Map the concentration of wealth in the hands of a few is a problem that should pre-occupy us all. Inequality persists because current social, political and economic structures operates in a system where poor people do not have access to opportunities and productive resources that can help lift them out of poverty and enable them to live fully.
Limited access to education and health services and productive resources such as land and capital prevents people, especially women, from escaping intergenerational poverty and discrimination. Approximately 20% to 40% of total inequality in the region can be explained by differences in human capital and skill endowments, which are largely determined by people’s access to education and training.
Rising inequality is a particular concern for the wellbeing of children, who are already the most vulnerable in any situation. They are completely reliant on their parents and governments to help meet their needs as they grow and develop. This means that any rise in price of food will hurt their meals the most; any change in health budgets could see them die from preventable causes; and poor quality schools could keep them in the poverty cycle for life.
Children are also disproportionately impacted by inequalities, with children in the richest households having access to 35 times the resources of children in the poorest households – a gap twice that of the general population. But beneath the facts and figures is a human story about growing up in this rapidly urbanising world.
In many parts of Asia these children are seen, but their real stories go unheard. In a silent, dark and largely unresponsive world. Asia is home to nearly half of the world's population under the age of 18. So in any global assessment of the impact of urbanisation, children and youth will play a huge role in how both Asia and the world changes.
The Asia-Pacific region also has one of the world’s worst gender gaps, with South Asia often ranked second-worst in the world in gender equality measures after sub-Saharan Africa. Close to 100 million women in the region are estimated to be ‘missing’ from the map - having died through discriminatory treatment in access to healthcare or nutrition, neglect, or through not being born at all.
Women also face what appear to be insurmountable barriers engaging with both the economic and political spheres in Asia. With such significant barriers constraining women’s economic opportunities, it is no surprise that women represent two-thirds of the poor in Asia.
Furthermore, women’s exclusion from political and legal spheres prevents these inequalities being challenged. Women’s burden of unpaid care work, and discriminatory attitudes, clearly impact their economic status.
But Inequality across Asia is also more deeply problematic in that is widely based on ethnicity and caste. Ethnic and indigenous groups make up a significant portion of Asia’s population, comprising 8 per cent of the population in India, 10 per cent in Vietnam, and 37 per cent in Nepal.
In 2015 Dalit’s face severe marginalisation in many countries, segregation in housing, limited access to basic services and employment, and often work in conditions similar to slavery. Remarkable as the figure might seem more than 260 million people are affected by caste discrimination worldwide, the majority of whom live in South Asia.
There are many things that can be done NOW to reverse the trend of rising inequality. National social protection schemes must ensure wide coverage to quality services; health and education services must be made available in all regions and to all groups of society; and economic growth plans must maximise employment opportunities for the poor. As demonstrated by the MDGs, global agreements can help to motivate the changes in policies and resources required.
The next round of global development goals must move away from aggregate targets and set ambitious objectives to reduce the gaps in progress between rich and poor, boys and girls, rural and urban dwellers, the young, elderly and disabled, and ethnic and religious groups in all societies.
Above all else it is essential to balance Asia’s economic expansion with more inclusive policies. Cut off by poor roads, telecommunications, or government policies that don't allow them to easily borrow or save, Asia's poor and vulnerable are watching the chasm between rich and poor grow ever wider.
That gap in prosperity can aggravate simmering social, economic and political tensions. Asian governments can help stem widening inequality by creating better conditions for the private sector to take the lead on economic expansion, continuing to promote economic diversification, and by spending on social services, education and healthcare, and regional road, sea and air networks that will open more opportunities to more people.
The recent Asian Development Bank study optimistically suggests that we could see Asia producing over half of global GDP by mid- century, and 3 billion Asians would be considered part of the rich world, with capita income levels equal to that of Europe today.
Yet the dreams held of the 'Asian Century' though plausible, are by no means preordained. In 1820, Asia accounted for about 60% of total global output, with China and India together accounting for nearly half of global GDP. This, as history shows only too vividly, was followed by nearly two centuries of economic decline.