How far has Asia really gone in eradicating poverty?

Nowhere else in the world have more people risen out of poverty than in Asia, where decades of economic growth have lifted living standards and propelled millions of people into the middle class. Up until COVID-19 rattled the world economy, the media has promoted Asia’s rapid growth as an economic miracle. Observers note that the United Nations (UN) Millennium Development Goals to halve global extreme poverty by 2015 could not have been achieved so early without Asia.

Global institutions such as the World Bank and the UN have lauded the region’s contribution to global poverty reduction, calling its progress one of the greatest human achievements in history. After all, Asia went from being the poorest continent in the world to one expected to fuel 40 percent of the world’s consumption by 2040.

China’s rise as an economic powerhouse has surely edged Asia towards the world’s economic centre of gravity. Over the past 30 years, China’s economic reforms have pulled more than 600 million out of poverty. The country is currently the world’s largest exporter, raking in US$2.5 trillion in exported goods in 2019. China is also the only major economy to have expanded last year: its gross domestic product (GDP) grew 2.3 percent as other economies struggled with the pandemic downturn.

But while Asia appears to have grown more prosperous, is this too simplistic a picture of the region’s triumph?

A closer look at poverty lines shows that without East Asia and the Pacific countries, the number of people living under US$5.50 a day increased from 2.02 billion to 2.68 billion between 1990 and 2015. Poverty has not, as many people believe, declined across the continent.

Despite Asia’s economic gains, lack of opportunity and access to basic services still prevent billions from breaking out of the poverty trap. The poorest of the poor continue to be beset by hunger, disease, and food insecurity. Many stand at the brink of poverty, as climate change threatens to disrupt global food systems and displace those at its frontlines.

In the Mekong region, villagers are losing their crops to rising temperatures and invasive pests, while those on the coast move inland as rising seas flood their lands and destroy their farms. Where seawater has inundated flood-resistant dykes and reached villages’ doorsteps, some people have no fresh water at all. 

All around the world, those at the margins of state support bear the brunt of slow-onset disasters or perish first when a natural calamity hits. Inequality continues to cut the poor off from opportunities for upward mobility, structurally denying them the country’s wealth and perpetuating their conditions. The world’s poor are most vulnerable to fluctuating food prices, dangerous labour conditions, and socio-political exclusion—distressing conditions that prevent them from living their lives with dignity.

Experts have criticised the internationally recognised threshold for poverty—the World Bank’s international poverty line (IPL)—for being an inaccurate and unreliable way of measuring poverty. In his 2020 report to the UN Human Rights Council, former UN Special Rapporteur on extreme poverty Philip Alston referred to the IPL as a “standard of miserable subsistence rather than an even minimally adequate standard of living.” 

Pegged at US$1.90 per day, the amount is meant to reflect what an average human adult needs to subsist in terms of food and shelter. Raised from US$1 and subsequently US$1.25, the current US$1.90 line is calculated by averaging the national poverty lines of the world’s 15 poorest countries—only two of which are in Asia. The amount is also based on average prices of a basket of goods in the United States in 2011, and may not reflect what the poor in Asia consume today.

Some have argued that the IPL is irrelevant to most Asian countries, which vary widely in terms of population size, geography, consumption patterns, ethnic diversity and economic dynamism—all of which also affect how wealth in the region is generated and distributed.

The Asian Development Bank (ADB) has argued that a US$1.90 poverty line is too low for national policymaking, especially when Asia’s rising aspirations and rapid economic development are taken into account. According to the ADB, an Asian-specific poverty line—one that reflects average income levels in Asia and uses national currencies instead of purchasing power parity (PPP)-adjusted international dollars—would better reflect the region’s economic realities. At higher poverty lines more representative of Asia’s economic progress, it becomes clear that poverty is far from defeated, even as the region grows richer.

In fact, once the poverty line is raised to US$3.20 and US$5.50—the two poverty lines added in 2018 to reflect the growing share of lower- and upper-middle-income countries in the world—the population of poor people in the world increases. Today, the almost two billion people living below US$3.20 a day sits around the same number of people living below US$1.90 in 1990.

Poverty is often associated with a lack of financial resources to provide for daily necessities, but the reality is that human life can be beaten down in many ways not captured by income.

The Multidimensional Poverty Index (MPI) serves to measure the wide range of deprivations that the poor suffer by using microeconomic data to reflect education, health, and living conditions. These include basic needs like electricity, sanitation, water, cooking oil, and financial assets, revealing a more comprehensive picture of poverty.

A person might have US$1.90, US$3.20, or even US$5.50 to get by on every day, but one might also lack access to a working toilet, clean drinking water, or a reliable source of electricity for preserving and cooking food. Poor living conditions might also impact their long-term health or deny them opportunities for education and employment. In India, for instance, children living just above the IPL have a 60 percent chance of being malnourished, a state which can stunt both physical and mental development in the long run.

It’s important to recognise that poverty lines are simply the surface of a problem with much deeper and far-reaching consequences—especially when climate change enters the picture.

Asia is home to some of the countries most vulnerable to extreme weather events. Southeast Asia, in particular, will be hardest hit by rising sea levels. In China, Japan, Korea, and the Philippines, warming seas have already increased the intensity of typhoons by 50 percent.

Much of the world’s poor lives on arid, non-profitable land or in slums and shanty towns that are poorly constructed and ill-equipped to withstand disasters of any kind. As climate change increases the frequency of extreme weather, the poor face an acute risk of having their homes flattened by a raging typhoon or their water supply cut off by a deadly earthquake.

Those who lack the means to invest in disaster-proof technology or buy insurance are also less able to recover from natural disasters. Many cannot even relocate or rebuild their homes in safer areas or replace lost assets, because they are deprived of the resources to do so.

The effects of climate change are already felt in the poorest regions in Asia, where natural resource exploitation, policy failures, and chronic inequality have left communities defenceless against natural disasters, crop failure, and pollution.

This can put people who were not considered poor before below the poverty line. In the deadliest tropical cyclone in Bangladesh, 10 million people in the Chittagong region were left homeless in 1991 after villagers were not alerted about the coming storm. Natural calamities not only destroy homes and jobs but also disrupt food and medicine supply routes, which in turn contributes to crippling food insecurity and long-term health issues.

Climate change’s impact on food security is already playing out in a region where half of the world’s undernourished live. In Asia, global warming is exceeding the thermal tolerance of crops and marine life, causing yield declines, price hikes, poor crop nutrient quality, and biodiversity loss. The poor are increasingly unable to afford a nutritious and sufficient amount of food, leading to growing hunger and health threats as climate change intensifies.

Prior to COVID-19, climate-related shocks, such as crop failure and illness from extreme weather, could push 100 million more people into poverty by 2030. With 75 percent of the global poor situated in rural regions that are dependent on natural resources, the effects of climate change are a matter of life and death.

In Southeast Asia, ethnic and religious minorities living in peripheral areas—typically underdeveloped and neglected by the state—will be hit hardest. Hill tribes in Laos, Vietnam, and Cambodia that depend on the land for food and income will feel the pinch from climate-induced challenges, as fertile agricultural land depletes and water grows scarce.

Education is a key pathway towards breaking patterns of poverty and empowering disadvantaged communities. More schooling often leads to better quality jobs with higher incomes. A larger pool of educated women and girls further boosts a country’s food security and its propensity for peace, which have a positive impact on standard of living.

In Asia, education is perceived as a particularly important driver of upward mobility or personal advancement. However, the nature of education itself is evolving. No longer confined to traditional classrooms, schools now conduct lessons online, making internet access an educational requirement today.

As COVID-19 sped up the rate of digital transformation in everyday life, it revealed deep-rooted inequalities: children without a stable Internet connection or digital device fell behind their better-off peers and those schooling in urban areas with faster Internet connections. Prolonged school closures also disproportionately impact poor students, who are at higher risk of missing out on economic opportunities in the long run.

In Kashmir, low internet speed is hampering education, as children are unable to download learning material; at times, teachers cannot even hear what their students are saying. Challenges in accessing online education have followed a six-month ban on 4G internet in the region by the Indian government, after which 2G mobile internet was restored in the Kashmir Valley.

Similarly, with Internet penetration at less than 50 percent in landlocked Laos, many students struggled to attend classes and keep up with the school curriculum during the nationwide lockdown. Only 12 percent have 4G mobile coverage in the country, the optimal level of connectivity for conducting zoom classes and downloading online material.

COVID-19 will continue to widen these inequalities. According to research by major NGOs, nine out of ten people in poor countries will miss out on the COVID-19 vaccine this year, as rich nations buy up the majority of global vaccine supply. This threatens to set the most disadvantaged people back years in education and employment, as low-income countries struggle to regain a state of normalcy and keep their populations safe.

Asia’s wealth has allowed it to make great strides in improving the quality of life for billions of people. But economic growth alone is not always enough to eliminate poverty in all its forms or guarantee that society will withstand major shocks and crises.

In fast urbanising Asia, the breakneck pace of growth has left cities grasping to support their burgeoning populations with proper infrastructure and services. The rural poor’s migration to urban areas in search of economic opportunity is often met with even more dire conditions, as cities buckling from overpopulation push them to the edges of society.

There are countless examples whereby the poor continue to be excluded from the boons of growth, and where the yawning gap between rich and poor has undermined Asia’s progress. In Vietnam, the country’s wealthiest person earns more in a day than the poorest person rakes in in a decade, even as Hong Kongers working at minimum wage must put in around 10 percent more time than workers in Canada to afford a Big Mac at McDonald’s. If efforts are not made to ensure growth is more equitable and sustainable, this disparity is likely to increase. Any economic benefits will end up accumulating at the top as Asia continues to develop and advance technologically.

It has taken a global pandemic to expose the fragility of economic growth and throw systemic inequalities into sharp relief. Asia’s headway on poverty may be drastically set back by the ongoing crisis, but its lesson for the future is that progress can only be meaningful if the region makes sustained and holistic efforts not to leave anyone behind.