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‘Not everyone benefits from economic growth equally’

Kathmandu, November 4, 2016: Emphasising that not everyone benefits from economic growth equally, a report titled ‘Key indicators for Asia and the Pacific 2016 (47th edition)’ by the Asian Development Bank (ADB) has highlighted ‘a high level of inequality indicates that different segments of the population benefit from economic growth at different rates’.

For instance, between 2000 and 2015, the annualised growth rates in household income or expenditure per capita for the entire population in Nepal stood at 7.5 per cent. However, the annualised growth rates in household income or expenditure per capita among the bottom 40 per cent of population in the country stood at 4.1 per cent.

There will be income convergence if the initially poor experience faster income growth than the rich, says the report. “However, policymakers should be careful in implementing programmes and interventions that are solely designed to minimise inequalities but disregard their impact on other sustainable development goals (SDGs) such as poverty reduction.”

While accepting that inequality is an important development issue that needs to be addressed and must therefore be included in the SDGs, ‘it is important to examine the inter-linkages possible trade-offs between changes in poverty and inequality, without losing sight of other important dimensions of development such as increasing the poor’s access to high-quality jobs, services, and infrastructure’, the report says.

Reducing high levels of social and economic inequalities could be beneficial for various reasons. For instance, with lower inequality and more equitable access to economic opportunities, it will be easier for people from lower echelons of society to fully realise their economic potential.

With lower inequality, there is also presumably less risk of social conflict arising from some segments of the population being left out from enjoying the benefits of economic development. The report has also flagged that the highest prevalence rates of child labour was observed in Nepal at 37.4 per cent.

In the majority of the reporting economies of Asia and the Pacific, at least a third of their respective urban population has inadequate housing, as per the ADB report. The highest numbers, based on latest data, are in Afghanistan (62.7 per cent), Bangladesh (55.1 per cent), Cambodia (55.1 per cent), and Nepal (54.3 per cent).

Nevertheless, there are indications that the proportion of people living in urban slums has decreased significantly, according to the report. In Bangladesh, for instance, the percentage of people living in urban slums was 87.3 per cent in 2000. “Like Bangladesh, Cambodia, Nepal, Mongolia, and Vietnam have also made significant improvements on this front.”

On a positive note, among developing member economies, Timor-Leste (38.5 per cent), Nepal (27.5 per cent), Afghanistan (27.7 per cent), the Philippines (27.2 per cent) and Kazakhstan (26.2 per cent) have the highest proportion of seats in national parliament that are held by women.

Measured by the Human Development Index (HDI), seven economies from the region (Australia; Japan; New Zealand; Hong Kong, China; the Republic of Korea; Singapore; and Taipei, China) were among the ‘Very High Human Development’ tier based on latest data. On the other hand, Afghanistan, Myanmar, Nepal, Pakistan, Papua New Guinea, and Solomon Islands have the lowest HDI values in the region.

The ADB report includes latest available economic, financial, social, and environmental statistics for the 48 regional members of the bank.

Key findings

  • 330m people still living on less than $1.90 a day. Approximately 1.2bn people in Asia and the Pacific are below the poverty line of $3.10 a day
  • About 2.7bn people in the region live without safe drinking water and about 1.5bn lack access to proper sanitation
  • Nine in 10 people now have access to electricity in Asia and the Pacific
  • Broadband internet subscriptions increased in 45 out of 47 reporting economies between 2000 and 2015, but 58pc of the region’s population remains unconnected to the internet
  • The GDP share of manufacturing increased in 16 out of 48 ADB member countries from 2000 to 2015
  • In nearly three-quarters of the economies of Asia and Pacific, the service sector accounts for more than 50pc of GDP based on latest data
  • Asia and the Pacific generated two-fifths of global GDP (2015 PPP)
  • There are remarkable disparities across economies: Singapore’s per capita GDP is 44 times that of Solomon Islands
  • The region accounts for roughly 45pc of global energy use according to latest available data
  • Over the past decade, the region’s total greenhouse gas (GHG) emissions grew faster than the global average
  • Govt spending on health as a percentage of GDP has increased in about two-thirds of the region’s economies since 2000
  • Number of days required to start a business in developing Asia and the Pacific declined from 45 days in 2005 to 20 days in 2015