The Hidden Poverty in Asia: What Lies Beneath the United Nations’ ‘Trends’?

Photo by Sean Ellis. From Flickr.

On the 25th of September, more than 150 world leaders will meet at the UN headquarters in New York to attend the UN Sustainable Development Summit. At the core of the agenda is the commitment to end extreme poverty in the next fifteen years.

When the United Nations set the Millennium Development Goals (MDG) in 2000, the World Bank created a poverty threshold of $1.25 per person a day as a benchmark for poverty. The amount was decided according to purchasing power parity and took into account the level of poverty of the fifteen worst performing countries in the world. While in 1990 the percentage of extremely poor people in Asia was 54.7%, it has dramatically decreased in the last two decades, reaching 20.7% in 2010. According to this trend, it seems that poverty in Asia might be eradicated by 2025.

Despite the positive approach driven by the World Bank’s poverty threshold, poverty in Asia does exist and it seems it has not decreased as the data suggests. The use of only one indicator to measure poverty in a wide continent like Asia gives a biased perception of the Asiatic economic condition.

The Asian GDP in the last decade followed two different trends: while Central Asia recorded almost the same catastrophic trend as the European Union during the financial crisis and Eastern Asia a similar but milder tendency, South Asia’s GDP took the opposite direction, increasing in 2009 and starting a slight decrease in 2011. Overall, Asia’s economic growth is almost nonexistent; hence, the eradication of poverty may be a lot further away than the statistics show.

In order to better understand the equation of poverty we should consider three different factors. First, Asia is the largest and most populous continent in the world. This means that each country in each area has a completely different set of policies and levels of development. While China (East Asia) can count on solid infrastructures, modern cities, and advanced industries, 70% of people in India (South Asia) live in rural areas. While children’s education in China is seen as a privilege to be earned through efforts, in India, poor families do not tend to take children’s education into account.

Second, consumption patterns may vary. In many areas of Asia, for example, a mobile phone is now considered a necessity. Food must be taken into account as well in order to understand poverty in Asia. In the globalized world we live in, everything has become more accessible, including food in rural areas. In the last fifteen years, the Global Food Price (GFP) has increased by 7.4% a year; at the same time, Asia’s food consumer price has increased faster than the general trend in the rest of the world. This means that the cost for Asian people to buy food in Asia is getting more expensive year after year. According to a survey conducted by the Asian Development Bank, poor people spend more of their income on food than those who are not poor.


Photo by Amir Farshad Ebrahimi. From Flickr.

Third, poverty means vulnerability. Vulnerability can be towards natural disasters, climate change or economic crises. Natural disasters can lead the most vulnerable to further poverty and create new poor fringes. Climate change decreases the well-being of a huge amount of Asians each year because it weakens their agricultural development. On the other hand though, global economic crises can lead to a series of harsh measures that can reach even the poorest countries through rising food prices and low demand from global markets.

Recently, the Asian Development Bank raised the issue of whether the $1.25 threshold is adequate enough to define poverty in Asia; the whole continent still looks for a more moderate poverty line of $2 per person a day. This means that despite the strong decrease in the standard poverty rate, half of the continent lives with less than $2 a day. The World Bank’s threshold is an outdated calculation mostly based on African countries; therefore, it does not represent the Asian trend anymore. In the last few decades, Asia underwent important economic transformations, mostly driven by the rising economic power of China. As a result of these changes, the quality of life has automatically evolved, even if income and expenditure levels remain the same. Consequently, it is practically impossible to claim the end of poverty in a continent that is as wide as it is multifaceted.

Many civil societies in Asia urged for the benchmark to be moved up to $1.51, which is the real gateway to extreme poverty in Asia. A change like that would increase the rate of extreme poverty by almost 10%, transforming the hope of a complete eradication of poverty in Asia into an unreachable dream. Considering all the poverty factors expressed above and a new hypothetical poverty threshold of $1.51 per person a day, Asia’s poverty rate would reach 49.5%, and will remain above 17% in 2030, wrecking the greatest glory of a continent statistically without poverty.

However, a more conscious definition of poverty may lead national governments and international organizations to promote better policies in order to decrease poverty once and for all and to promote an efficient development throughout the area.

The UN, World Bank and all Asian leaders must take action in the next days and face the real problem of the hidden increasing poverty in Asia. Now they have two obvious choices: the first one is to keep showing the positive trend of Asian poverty and hope to eradicate it completely before 2030; the second is to face the truth that lies behind all the statistics and increase their poverty threshold to $1.50 per person a day. This latter decision would automatically increase the percentage of people below the poverty line, but it could also spur the governments of all Asian countries to promote better policies in order to once again really decrease the percentage of those in poverty.

Global Seven News

Arianna Rotulo

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