Crisis could trap 21 million people in extreme poverty in Asia Pacific: UN,ADB Report

Microfinance Focus, Feb 17, 2010: A joint report by the United Nations and the Asian Development Bank (ADB), “Achieving the Millennium Development Goals in an Era of Global Uncertainty: Asia- Pacific Regional Report 2009/10”, examines the toll that the global economic crisis has taken on progress towards the Millennium Development Goals (MDGs) in the Asia-Pacific region.  The global economic crisis could fence in an additional 21 million people in the Asia-Pacific region in extreme poverty, living on less than $1.25 a day, the report said.

“This report shows that, while we are at a moment of crisis for the MDGs we also have an opportunity,” says Noeleen Heyzer, UN Under-Secretary-General and Executive Secretary of ESCAP at the report launch. “As this crisis has exposed much vulnerability in the region – we can now address them and direct this recovery towards a stronger sustainable development path for the Asia-Pacific region.”

“Most stimulus measures have focused on areas other than social expenditures,” says Ursula Schaefer-Preuss, ADB Vice President. “If we are to address the human impacts of the economic slowdown and achieve the MDGs, then social spending needs to be stepped up substantially.”

“Asia has much weaker social protection compared to other regions such as Latin America and Eastern Europe,” says Ajay Chhibber, UNDP Regional Director for Asia and the Pacific and UN Assistant Secretary-General. “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.”

The report notes that long-term social protection can actually strengthen Asia’s resilience against future shocks. Yet the report finds 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.

If fiscal stimulus packages have a strong component of social expenditures, notes the report, this is likely to produce a double dividend – not only boosting growth more rapidly but also accelerating progress towards the MDGs.

Prior to the economic crisis, the region as a whole had been making notable gains, including being 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 below the $1.25-a-day poverty line. However, the economic crisis undermined the momentum.

Asia and the Pacific is still the home to the largest number – more than 50 per cent – of people, both rural and urban, without basic sanitation, of under-5 children who are underweight, of people infected with TB, of people living on less than $1.25 a day, and of rural people without access to clean water, according to the report.

It notes that in 2009 the crisis trapped up to an additional 17 million people in extreme poverty, and in 2010, another 4 million, giving a total of 21 million or roughly the equivalent to the population of Australia. The most adversely affected segment of the population is women, who constitute the majority of Asia’s low-skilled, low-salaried, and temporary workforce that can easily be laid off during economic downturns. Moreover the crisis has reduced the demand for migrant labour –and women form nearly two-thirds of the total Asian migrant population.

The report points to opportunities for the region to protect itself and the MDG progress from future crisis though regional cooperation. Regional cooperation would also be particularly valuable for the trade in food, and could include grain banks that are maintained in each country but readily accessible to others, notes the report.

© 2010, Microfinance News. All rights reserved. 2008-09