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Asian Dev Bank: Asia will always be a corrupted, third world hellhole

Rogue Trader

Alfrescian (Inf)
Asset
Asia lacks social benefits despite growth: ADB
20110823.182238_20110823-asiasocial.jpg


AFP
Tuesday, Aug 23, 2011


SINGAPORE - Most Asian economies have not done enough to provide good jobs and adequate social benefits for their people, despite rapid economic growth over 20 years, the Asian Development Bank (ADB) said Tuesday.

Poor social provision and the tensions it often produces could hamper the region's long-term growth prospects, said the Manila-based lender, urging countries to tap their high savings to improve social safety nets.

Asia grew an average 6.4 percent per year between 1990 and 2008, much faster than the rest of the world, including developed countries in the OECD, which expanded by an average 1.8 percent in the same period.

The growth has led to a higher number of Asians finding jobs and 150 million people being hauled out of poverty, the ADB said.

But job creation and poverty reduction have been very uneven across the region, it said.

"Asia continues its high and resilient growth of the last two decades, but behind this rosy picture, we have to remember that progress is uneven," ADB chief economist Changyong Rhee told reporters in Singapore.

"Poverty still remains high in many low-income countries... Asia is far behind in terms of quality employment," he said.

"We have done a lot, but on the other end, there is much room for us to improve... We are still in a situation with low quality public services," said Rhee.

"This kind of divergence in income inequality and non-income indicators can lead to some social tension and it may hamper the growth prospects of the region in the longer term."

ADB, Asia's version of the World Bank, said the region remains home to most of the world's poor with more than 40 percent of most developing countries' populations living below the poverty threshold of two dollars a day.

Most of the jobs created in Asia are low-wage manufacturing positions, it said.

Many workers are in the informal sector, which means they are exposed to greater risks, have no contracts and are not covered by non-wage benefits such as pensions, severance pay and health insurance.

"Developing Asia has a very high rate of informal employment, with more than twice the share of the labour force in informal employment compared with Latin America," the ADB said.

A "large majority" of Asian countries have informal employment rates exceeding 40 percent of the working population, it added.

China had 58.9 percent of workers working in the informal sector in 2008, with India coming in higher at 81.9 percent.

Rhee, the ADB economist, said Asian governments should use some of their foreign reserves to invest in social safety nets.

"In Asia, we haven't spent very much on social safety nets. That's one reason why we have less fiscal problems," he told reporters, referring to Asia's massive foreign exchange reserves which helped the region weather the 2008 global recession.

"Now is the time for us to think seriously about these kinds of issues because it's going to become one of the important determinants for the long term sustainability of the region," he said.
 
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