Poverty in Emerging Asia: Progress, Setbacks, and Log-jams

Abstract

The financial crisis of 1997-1998 in East and Southeast Asia has raised questions about the sustainability of some hitherto admired modes of poverty reduction. But this paper argues that there remain important lessons to learn from Asia’s great ascent out of poverty since the Second World War. It remains important that well before the setback struck, much of this area had eliminated food poverty. Most recent information suggests that the great improvements in poverty reduction have not been that much affected by the crisis. Instead, a more important problem, which is the focus of this paper, is the growing concentration of poverty on “the hard-core poor” especially among the uneducated in backward regions, and the declining elasticities of poverty to economic growth. Combined with the prospect that growth itself may well be slower, especially in East and Southeast Asia than before 1997, this raises the real question about future Asian poverty: the prospect that many countries, especially the large, poor ones, will not maintain earlier rates of poverty reduction without explicit redistribution.