Dhe Corona crisis has wiped out large parts of Asia’s progress in fighting poverty. The epidemic also threatens the achievement of the United Nations development goals. The Asian Development Bank (ADB) reported Tuesday that up to 80 million people in the region of 35 countries had fallen below the extreme poverty line. It’s $ 1.90 a day.
The economy in the developing countries of Asia contracted by a total of 0.1 percent last year, the first recession in almost six decades. You need a growth rate of around 5 percent to create at least enough jobs. The economic output of the Philippines fell by 9.6 percent last year, while that of India fell by 7.3 percent in its fiscal year (March 31). The region lost around 8 percent of its working hours due to the curfew alone.
The progress in Asia, driven by China’s development, was palpable: The number of those people in the developing countries of the Asia-Pacific with an income between $ 5.50 and $ 15 a day has increased since 1990 sevenfold to now – statistically speaking – more than one in three Asians. At the same time, the number of extremely poor people fell from 1.2 billion in 1999 to 203 million in 2017.
Fight against hunger
Without the corona pandemic, the number would have almost halved again to only around 104 million in the next three years, according to the “Bank of Asians”. In reality, however, it is now hovering again at around 180 million. In ten of the region’s economies, more than a tenth of the people vegetate below the extreme poverty line. Quite different in China: the economic upturn there reduced the proportion of the extremely poor from 32 percent of the population in 1990 to less than one percent in 2016.
Fighting hunger and improving health and education sectors have also suffered during the pandemic in the region. “Corona has exposed the social and economic breaking points that are likely to weaken the region’s sustainable and inclusive development,” said Yasuyuki Sawada, chief economist of the bank. In South Asia in particular, the incomes of the better-off 60 percent of the population grew faster than the income growth rate of the lower 40 percent of the population. The bank warns that this will lead to increasing inequalities in the societies of India, Pakistan and Bangladesh, among others.
While China has also largely eradicated hunger and malnutrition, the latter had increased again in southern Asia even before the outbreak of Corona in China: “The number of undernourished in Central and West Asia rose by 2.6 million people in 2019, while it rose in South Asia 17 million people, ”says the bank’s report. The ADB also warns of the growing consequences of climate change. If the previous changes in weather patterns continued, around 38 million Asians would go hungry in 2030.
Many in the informal sector
Currently, more than half of all workers in 14 countries are employed in the informal sector – i.e. without a contract, pension or health insurance. In India, for example, their number is estimated at more than 80 percent. These people are particularly hard hit when prices go up. Because they have to spend a comparatively larger proportion of their income on buying food. Their prices rose in 17 Asia-Pacific economies by more than 5 percent last year.
The rising prices for basic services are contributing to households getting into trouble. The Bank’s Institute (ADBI) reports that the majority of households in developing countries, at 55 percent, tumbled into financial difficulties during the pandemic. 80 percent of them had to restrict their consumption, which has corresponding consequences for the overall economic development. Around a third of those suffering borrowed money from friends and relatives or postponed servicing their loans.