ADB sees poverty on the rise in Asia

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MANILA, Philippines—Poverty is on the rise, and the Asian Development Bank has warned governments throughout the region, including the Philippines, not to go slow on their pump-priming initiatives to counter the ill effects of the global economic turmoil.

ADB chief economist Jong-Wha Lee said that, if not for the global crisis, which stemmed from the financial meltdown in the United States and Europe, Asia could have sustained a collective growth of at least 9 percent in 2008.

But the crisis dragged down growth of Asia to 6.3 percent last year from a robust 9.5 percent in 2007.

Had a minimum 9-percent growth been kept, Lee said, some 60 million Asians, of the estimated 903 million living below the poverty threshold of $1.25 a day, would have improved their lives.

He added that another 40 million would have gotten out of poverty next year if not for the global turmoil.

Poverty reduction efforts in the region have been derailed due to the global crisis. This is because many Asian countries rely heavily on exports to industrialized nations for their overall economic output. The Philippines, for instance, has the United States and Europe as its biggest export markets. Exports to the United States and Europe account for 17 and 14 percent of total export revenues.

“There are people who have lost their jobs because of the crisis, and this may have affected poverty incidence. Many countries in Asia still lack social safety nets [to prevent rise in poverty during times of external shocks],” Lee said in a briefing yesterday.

According to a 2006 government estimate, poverty incidence in the Philippines stood at 33 percent of the country’s population.

Under the Millennium Development Goals, the Philippines and other members of the United Nations have set a goal of reducing poverty incidence by half by 2010, and eliminating extreme poverty by 2015.

Lee also said that Asia could be headed for a mild recovery next year, but that this could be curtailed if governments across the region were to end their stimulus programs.

In its regional outlook released last March, ADB said it expected Asia to grow by 3.4 this year, and 6 percent next year. The Philippines is estimated to grow by 2.5 percent this year and by 3.5 next year. link.....