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ARTICLE

Table I
GDP Growth Rates and Poverty in Asia-Pacific
1980s (%) Poverty in 1990s Poverty in 2000-05 Poverty in
Millions Millions Millions
East Asia & Pacific 7.7 796 8.2 476 8.1 170
China 9.8 634 10.0 375 9.4 128
South Asia 5.8 474 5.4 479 6.1 461
India 5.9 382 5.7 376 6.5 387
Other Regions 1.5 254 2.6 203 3.4 117

Source: World Development Indications

It is evident from table I that China has sustained very rapid Asia is trying to achieve is inclusive growth and is not
rates of growth, averaging almost 10 per cent with a strong accompained by rising levels of inequality.
strategy of two way linkages between agricultural growth
and off-farm employement in village enterprise, with the Table II
back of high levels of domestic and FDI in production for
Growth Rate of Asian Countries GDP (%)
export markets.
2002-04 2004-06 GDP Change
In recent years, the euphoria about Asian economic
South Asia:
performance has been enhanced even further by the high
Bangladesh 5.8 6.4 0.6
growth rates achieved simulataneously by two largest
India 8.0 8.9 0.9
economies of the region, China and India. Hence, right from
2003 the locus of growth has started to shift in the region Pakistan 6.1 7.3 1.2
very dynamically. Virtually all countries of South Asia Sri Lanka 5.7 6.7 1.0
(including Pakistan), besides India, have also seen a
East Asia:
significant upsurge in their grwoth rates by anywhere
China 10.0 10.6 0.6
between 0.5 to 1.5 per cent. The manufacturing sector, in
particular, in these countries started to take-off on the back Indonesia 5.9 5.6 -0.3
of rapid growth in exports. Countries like Bangladesh and Malaysia 6.3 5.5 -0.8
Pakistan also have large pockets of poverty and prospects
Philippines 5.6 5.2 -0.4
have improved in those countries of achieving a faster
Thailand 6.7 4.7 -2.0
change in reduction of the incidence of poverty.
Source: ADB 2007
At the same point of time, most of middle to high income
countries of south east, namely Asia, Malysia, Thailand,
Indonesia and Philippines experienced a slow down. It is not 1. Causes for Inequality

due to the financial crisis of late 90s, but is perhaps, caused Asia-Pacific has not achieved inclusive growth of the type
by the loss of competitive edge in international markets at which leads to a 'Convergence' along the income/
the bottom end in labour intensive manufactururers to south expenditure scale. The basic reason for this is that policy
Asian countries and at the medium to high-tech end, makers have in most countries single mindedly pursued the
increasingly to China. goal of high growth and have largely relied on 'trickle down'
effects of grwoth on improving the living standards of people
Thus, the pattern of growth in the Asian region started at the bottom of the income ladder.
distributing itself in a way that augers well for overall rate
of poverty reduction in the region (see table II). Here, one Countries in which inequality has increased, regional
question arises is that the higher rate of growth that South disparities have also widened at the sub-national level. This

42 | 2019 | JUNE | BANKING FINANCE