'Dark side' of Asia's economy can't be ignored

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Jonathan Manthorpe
Asia's stellar economic growth in the last 40 years has produced serious and associated problems of socially divisive wealth disparity and dangerous levels of environmental degradation, says the director general of the Asian Development Bank.
Speaking in Vancouver last week, Canadian Rajat Nag said he is optimistic Asian governments will successfully meet these challenges because the cost of failure could be catastrophic.
Asia remains the home of the majority of the world's poorest people despite dramatic economic development that has seen average per capita annual income rise from $170 US in 1967 to over $1,000 US in 2005, Nag said.
"There are still more than 1.7 billion Asian people living below the $2 a day poverty line, including nearly 600 million still struggling at $1 a day."
It is thus going to be a challenge for Asia to meet the so-called Millennium Development Goals of reducing poverty by half by 2015.
What he called the "dark side" of Asia's economic growth has been a serious expansion in the division between rich and poor. "It is the classic syndrome of the rich getting richer while the poor get poorer," he said.
Nag said in an interview he is cheered by the fact that most Asian governments, especially in the most populous countries, India and China, are well aware of their problems of disparity and the potential for social upheaval it carries.
He said he does not advocate government-managed income redistribution to address disparities. "We still believe the focus has to be on economic growth, but the growth has to be more inclusive," he said.
This means, he said, much more attention must be paid to stimulating growth in the poorest regions of Asian countries, which usually means the rural areas.
But maintaining growth is going to be even more challenging as the world enters a period of climate change and as yet unpredictable levels of warming.
Studies by the Asian Development Bank predict climate change may lead to serious declines in agricultural production, expanding ranges for various diseases and direct threats to low-lying countries and cities.
Ten coastal mega-cities in Asia -- including Bangkok, Jakarta, Karachi and Manila -- face permanent damage and flooding if there is a significant rise in sea levels.
Low-lying countries like the Maldives, Tuvalu and Bangladesh may be inundated or disappear entirely.
All this may propel a mass movement of "environmental refugees" that will be very difficult for governments to manage effectively.
Nag said he believes that the current degree of environmental damage is such that some global warming is going to happen, even if there is an international program to reduce greenhouse gas emissions.
But to minimise the economic and social effects of environmental degradation "I think Asia has a very narrow time-frame in which to act," Nag said.
"Asia doesn't have the option of growing and polluting now and cleaning up later," he said. "If you pollute you won't grow."
Asia's biggest challenge is employment and to continue creating jobs, Nag said. This is essential not only to attack poverty but to provide for new entrants into the job market, which in China, for example, is around 30 million young people a year.
"Having said that, we don't have to compromise growth in order to protect the environment," he said.
"I think China can still grow at 10 per cent plus [a year in gross domestic product], but it must recognise the costs of not doing some of the green things," Nag said.
The best thing the industrialised world can do not only for Asia, but also in its own self-interest, is to help the region make the leap into using new technologies that emphasise environmental sustainability
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The Vancouver Sun