The Social Development Situation and Prospects

of Asia and the Pacific into the

Twenty-first Century: Summary

MEETING PAPER NO 1, PART 1 OF 4:
INTRODUCTION AND THE REGIONAL POVERTY SITUATION

INTRODUCTION

A. Economic and social development in Asia and the Pacific

Increasingly in Asia and the Pacific, there has been recognition and consensus that people should be the centre of development and that development is for all people. Thus, people are seen as both the instigators and implementers of development and the beneficiaries of its fruits. Experiences in the region demonstrate that motivated, skilled and healthy people are the most valuable asset of a country. These constituent elements of social development are essential for the sustainment of equity, political stability, social harmony and economic growth. Social development is a multidimensional process encompassing, among other factors, food and nutrition, health care, education, safe drinking water and sanitation, shelter, productive and remunerative employment, security, distributive justice and ability and freedom to participate in society as responsible members. That process enables all people to lead harmonious, productive and fulfilling lives in accord with their potentials and aspirations.

The Asian and Pacific region has been blessed with unprecedented economic prosperity in recent decades. Yet, that growth has been uneven across subregions and countries, and between areas and population groups within countries. A number of countries have been successful in achieving significant progress in social development simultaneously with rapid economic growth. However, sizeable segments of the population in some other countries have been either excluded or marginalized, with minimal access to assets, income, productive and remunerative employment and basic social services. Overall, there has been increasing concern that the gap between economic and social development has been widening and that action at the national, subregional, regional and global levels was needed.

In 1990, the General Assembly adopted the International Development Strategy for the Fourth United Nations Development Decade (1991-2000), which focused on the need to deal directly with social issues that had been largely neglected because of the overriding emphasis on economic growth. The Fourth Asian and Pacific Ministerial Conference on Social Welfare and Social Development, convened by ESCAP in Manila in October 1991, followed up on that landmark global Strategy by adopting the Social Development Strategy for the ESCAP Region Towards the Year 2000 and Beyond. In December 1992, the General Assembly decided to convene the World Summit for Social Development in Copenhagen in March 1995. The main objective of the Summit was to devise a plan of action to promote social development through reduction and alleviation of poverty, expansion of productive employment and enhancement of social integration.

B. The Agenda for Action on Social Development in the ESCAP Region

To assist the countries of the region in their pursuit of social development, ESCAP convened the Asian and Pacific Ministerial Conference in Preparation for the World Summit for Social Development in Manila in October 1994. The Conference adopted the Manila Declaration on the Agenda for Action on Social Development in the ESCAP Region, thereby taking the lead in global efforts to enhance social progress. The participating governments expressed firm commitment to according priority to social development through effective policies, sound measures, appropriate programmes and adequate resources. ESCAP, by its resolution 51/4 of 1 May 1995, endorsed the Agenda for Action and urged all members and associate members to take early and effective action to implement it.

The Agenda for Action built on the regional Social Development Strategy adopted in 1991. It identified specific, time-bound social development goals and targets which were consistent with provisions in existing regional and international agreements and standards. The Agenda for Action focused on the three core themes of the World Summit: poverty alleviation, expansion of productive employment and social integration. It is in accord with the Programme of Action for Social Development and has, in fact, been an important input to the formulation of the latter.

It is recognized that the three core goals are interrelated, with action taken on one impacting directly on the other two. Thus, poverty alleviation through the provision of basic social services to the poor leads to employment expansion and social integration by improving their skills and their capacity to participate in mainstream society. Expansion of productive employment leads to poverty alleviation and social integration by enhancing the opportunities and incomes of the poor, and social integration of the poor and disadvantaged and vulnerable groups enhances their employment prospects and income-earning potential. However, poverty remains the most critical of the three concerns in the majority of countries in the region, and the expansion of productive employment and enhancement of social integration are viewed as integral strategies in the reduction of poverty.

With the overriding goal of poverty alleviation, the Agenda for Action identified 10 major social issues to be addressed: population, health, education, employment, shelter, environment, disasters, crime, social protection and the family. The Agenda emphasized the roles of governments, non-governmental organizations, employers and workers, local communities, subregional, regional and international organizations, and, above all, the people themselves in achieving progress in social development.

This paper provides a summary of the social development situation and prospects in the ESCAP region with regard to the core concerns of poverty alleviation, employment expansion and social integration and examines the likely trends in these areas into the twenty-first century. It draws upon the analytical background papers on those three topics presented at regional meetings in preparation for the Conference. The present perspective paper highlights persisting and emerging issues and their implications for policy makers and planners in meeting the region's social development needs at the threshold of the new millennium.

I. THE REGIONAL POVERTY SITUATION

The regional Agenda for Action stipulated that all countries and territories in Asia and the Pacific should take immediate action to identify and estimate the incidence of poverty. The global Programme of Action suggested that all countries should formulate or strengthen and implement national poverty eradication plans to address the structural causes of poverty, preferably by 1996.

A. Definitions and regional estimates

1. Income poverty and other poverty measures

Estimates of the incidence of poverty and its intensity differ according to the definition used. Many have defined the poor as people having a level of income (or expenditure) below that necessary to provide the basic necessities of life. However, comparisons among countries are difficult, as national standards used for measuring minimum levels of living and costs of essentials differ. To overcome these constraints, the World Bank uses a standard expenditure of US$1 per capita per day, at 1985 purchasing power parity (PPP), to define the absolute poverty line (income poverty). The estimates based on this standard differ from those relying on national poverty lines defined by the countries themselves.

Other, more encompassing definitions of poverty are based on such perspectives as basic needs and capabilities as proposed by the United Nations Development Programme (UNDP). However, adequate time-series data on these estimates are usually not available for indicating progress and trends. To capture the capability aspects of poverty, UNDP introduced the capability poverty measure (CPM) in its 1996 Human Development Report. The CPM is a composite index of three indicators that reflect the percentage of the population with capability shortfalls in three basic dimensions of human development: living a healthy, well-nourished life; having the capability of safe and healthy reproduction; and being literate and knowledgeable. The three corresponding indicators chosen are the percentage of children under five who are underweight; the percentage of births unattended by trained health personnel; and the percentage of women aged 15 years and over who are illiterate.

Further refinements to capture the capability aspects were introduced in the 1997 Human Development Report in the form of the human poverty index (HPI). The HPI is a composite of three indicators reflecting deprivation in human development in three areas. These are (a) survival: the percentage of people with life expectancy below age 40; (b) knowledge: the percentage of adults who are illiterate; and (c) overall access to services: the percentage of people without access to safe water and health services, and underweight children under five.

2. Regional estimates

Estimates of the number of poor people in the Asian and Pacific region vary from 800 million to more than 1 billion, depending on the standards used to define income poverty. According to recent World Bank estimates (using US$1 per capita per day at 1985 PPP), the number of poor people in the region grew from about 960 million in 1987 to some 1.3 billion in 1993 (World Bank, Poverty Reduction and The World Bank: Progress and Challenges in the 1990s (Washington DC, 1996).They account for more than three-quarters of the world’s poor. According to UNDP, eight countries in the region are among the 45 classified by UNDP as having low human development. These are Bangladesh, Bhutan, Cambodia, India, the Lao People's Democratic Republic, Myanmar, Nepal and Pakistan.

The numbers and incidence of poverty (headcount index) in rural areas have been higher than in urban areas in much of the ESCAP region. For example, in Bangladesh, the poverty headcount index in 1989 was 48 per cent in rural areas, as compared with 33 per cent in urban areas. The rural poor numbered about 43 million, while the urban poor were less than 6 million.

With increasing urbanization and a shift of the population to urban areas, the gap between poverty incidence in rural and urban areas is narrowing. The urban population's share of the total population in the ESCAP region is expected to rise to 43 per cent by the year 2000 and to 50 per cent by 2010. Thus, urban poverty is expected to rise in both absolute and relative terms. This will pose major challenges to providing jobs and housing and urban services as well as managing the urban environment.

Furthermore, the incidence of poverty and its intensity differ between women and men in several ways. Households headed by women are more likely to be poor than those headed by men. Women also face greater hardship than men in lifting themselves and their children out of the poverty trap. The many biases in society, including unequal opportunities in education, employment and asset ownership, place major burdens on poor women and limit their opportunities. For example, in Pakistan, as in some other countries, the gender gap in education is substantial; women have fewer employment opportunities than men in rural areas, and they lack access to land. Women are still not fully participating in important social and economic programmes in a number of countries, in spite of two decades of concerted efforts by the international community and the adoption of several international and regional instruments for advancing the status of women.

3. Subregional variations

(a) South Asia

According to World Bank estimates, the incidence of income poverty as reflected by the headcount index (percentage of the population below the poverty line) in South Asia declined from 45.4 in 1987 to 43.0 in 1990 but increased marginally to 43.1 in 1993, as reform programmes to address fiscal and balance of payments problems were introduced (1997 Report on the World Social Situation (ST/ESA/252)). Between 1987 and 1990, the number of poor people in South Asia remained at around 480 million, and it increased to 515 million in 1993. The intensity of poverty, as measured by the poverty gap (the gap between the poverty line and the average expenditure of all the poor as a percentage of the poverty line), declined from 14.1 in 1987 to 12.3 in 1990 but increased to 12.6 in 1993.

However, the regional and national estimates of poverty trends, mask significant variations in performance among and within countries. Thus, in India, the states of Andhra Pradesh, Haryana, Kerala and Punjab had managed to reduce income poverty by more than 50 per cent, other states were less successful. The incidence of poverty has also been high in Bangladesh, Bhutan, Nepal and Pakistan.

Bangladesh, Bhutan, India, Nepal and Pakistan had CPM values between 60 per cent and 77 per cent, showing significant shortfalls in capability more pronounced than those reflected by the income poverty measure (headcount index). Sri Lanka had a CPM value of less than 20, indicating a slightly more favourable situation for the poor as compared with the income poverty measure. Bangladesh and Pakistan had the HPIs, at 48 and 47 respectively, among the countries in Asia and the Pacific for which the index has been estimated. Sri Lanka had an HPI marginally more favourable than its headcount index of income poverty.

Based on the headcount index and other measures, the incidence of poverty is highest in the South Asian countries. The largest number of people living in absolute poverty and the highest incidence of income poverty are in South Asia. It is a reflection not only of the large size of the subregion’s population but also of its relatively low per capita income and more modest inequality in income distribution. Most of the poor reside in rural areas, depend on subsistence agriculture and low-skill wage employment, and tend to be illiterate. Women have less education, poorer health, lower life expectancy and work longer hours than men in many parts of the subregion. Social indicators for the subregion rank among the weakest in the world, with high infant mortality and low school enrolment rates.

(b) East and South-East Asia

In East and South-East Asia, the headcount index of poverty increased marginally from 28.2 in 1987 to 28.5 in 1990 but declined to 26.0 in 1993. The number of poor people increased from 464 million in 1987 to 468 million in 1990 and declined to 446 million in 1993. The poverty gap declined consistently from 8.3 in 1987 to 8.0 in 1990 and 7.8 in 1993. The incidence of income poverty in East and South-East Asia (excluding China) fell dramatically, from more than 23 per cent in 1987 to less than 14 per cent in 1993. High and sustained economic growth based on rapid accumulation of both human and physical capital and the highly productive use of that capital accounted for the sharp drop in the incidence of poverty and the decline in the number of poor people. The social indicators also gained strongly: life expectancy steadily rose; infant mortality fell by half; and educational opportunities expanded.

There was marked progress in poverty reduction in China during the early 1980s, largely following reforms in agriculture. Since then, poverty reduction has continued at a slower pace, even though overall economic growth was rapid. World Bank estimates indicate that the poverty headcount index rose between 1987 and 1990 but fell thereafter. Most of the poor are located in the hinterland provinces and some in remote areas. The incidence of poverty has also been high in Cambodia, the Lao People's Democratic Republic, Mongolia, the Philippines and Viet Nam.

Thailand had the lowest HPI among the Asian and Pacific countries for which data are available. Its HPI was also significantly lower than its CPM and headcount index. Although the incidence of poverty is less pronounced in this subregion as compared with South Asia, the situation of some of the poor and the pockets of poverty may be equally severe. Thus, in East and South-East Asia, broad-based labour-intensive growth alone may not be adequate, and targeted interventions are necessary to bring about further reductions in poverty.

(c) The Pacific

Data on the incidence of poverty in the Pacific island developing economies are either not available or not easily accessible. However, anecdotal evidence suggests that significant proportions of the populations experience some degree of poverty. Malnutrition appears to be an important emerging problem. The Pacific island economies, with the exception of Papua New Guinea and Solomon Islands, fall into the "medium human development" category.

Available data indicate that these island economies have not achieved an improvement in overall economic performance during the 1990s relative to their performance during the 1980s (Economic and Social Survey of Asia and the Pacific 1996 (United Nations publication, Sales No. E.96.11.F.18) and 1997 (Sales No. E.97.11.F.8). The pace of population growth in many of them has far exceeded the rate of economic growth, resulting in a general decline in living standards. Historically, these island economies have been among the recipients of the highest amounts of aid in the world on a per capita basis. However, aid for budgetary support either has ended or is progressively being cut back after independence. Other aid flows have not been sufficient to counterbalance these declines. The resource and production bases in many of the countries and territories are extremely limited, as are their human resource capabilities.

(d) Central Asia

In the Central Asian Republics (Kazakstan, Kyrgyzstan, Turkmenistan and Uzbekistan), the headcount index of poverty (based on US$1 per capita per day at 1990 PPP) rose from 15 in 1987/1988 to 52 in 1993/1994, as the countries introduced reforms to restructure their economies. The total number of poor people increased from 6.5 million to 24.5 million during the same period. The incidence of poverty (based on US$1 per capita per day at 1990 PPP) in 1993/1994 was highest in Kyrgyzstan (84 per cent), followed by Turkmenistan (57 per cent), Kazakstan (50 per cent) and Uzbekistan (47 per cent). However, the intensity of poverty seemed to be modest, with many households concentrated around the poverty line and moving frequently into or out of poverty.

B. Issues in poverty reduction

It is difficult to disentangle the causes and consequences of poverty. Factors affecting poverty could also be the result of poverty, for example, illiteracy or poor educational attainment. Nevertheless, it is important to identify the major economic as well as social issues and conditions associated with poverty so as to develop appropriate action packages to address these issues. The major causes of poverty in the Asian and Pacific region include: (a) lack of or slow economic growth and structural adjustment; (b) high population pressure; (c) ill health, the incidence of AIDS and other disabilities; (d) lack of education and skills; (e) lack of access to productive assets, such as land, and to credit and other economic support services; (f) natural disasters, including droughts and floods; (g) environmental degradation and loss of natural resources; (h) different forms of exclusion, particularly of women and other disadvantaged and vulnerable groups, in economic, social, ethnic and legal arenas; and (i) breakdown and disintegration of community and family support systems. Lack of access to productive and remunerative employment is one of the most important causes of poverty. These factors substantially mirror the 10 major social issues that are identified in the Agenda for Action. Some of these factors are discussed below and others in the subsequent chapters on employment expansion and social integration, taking into account the inherent linkages among the three core goals of the Agenda for Action.

1. Economic growth, structural adjustment and poverty

Studies by different agencies show that countries which were able to achieve significant reductions in poverty had experienced sustained growth in per capita income of 2 per cent or more per annum (1997 Report on the World Social Development Situation (ST/ESA/252). On the other hand, countries which did not have significant growth in per capita incomes for extended periods were not able to reduce poverty on a sustained basis. Thus, economic growth is a necessary but not sufficient condition for reducing absolute poverty in low-income countries. Economic growth is not the only determinant of poverty reduction. Equally important are the quality and composition of growth and policies for social equity and distributive justice. A recent study surveying the impact of macroeconomic policies on poverty in 10 Asian countries also concluded that a high rate of growth in per capita GDP or GNP may not necessarily improve the living standard of the poor owing to adverse distributional changes. As indicated in the study, it is important for poverty alleviation that the overall growth in per capita GDP should be based on high growth of rural GDP in areas with large numbers of rural-based poor. The sectoral composition of economic growth and the distribution of the benefits of that growth between savings and consumption, on the one hand, and among the various segments of the population, on the other, are important determinants of its impact on poverty reduction.

Those countries (such as Malaysia, Pakistan and the Philippines) that have achieved a significant reduction in poverty have had moderate to high growth rates. In China, rapid growth initially brought about a decline in poverty, but from the mid-1980s, urban inequality has been exacerbated while rural incomes have been affected by public sector accumulation policies.

Experience in the region indicates that structural adjustment policies have, in some countries, inadvertently created new crops of poor people, particularly in the developing economies undergoing transformation from socialist systems to market-driven systems (for example, China, the Lao People's Democratic Republic, Mongolia, Viet Nam and the Central Asian Republics). Various social and health indicators have deteriorated during the transition. While social safety nets are necessary, they are not adequate to assist all groups lacking the capacity to cope with the adverse impact. Inflation is another aspect that aggravates the poverty situation (China, Nepal and the Philippines are examples) especially when food prices are affected. India and Indonesia have had some success in stabilizing food prices through increases in production and buffer stock operations. Food subsidy programmes in some countries have not been efficient in targeting the poor and the vulnerable, with a substantial share of the subsidies benefiting the non-poor.

2. Population and health

Reduction of population growth has been an important component of long-term poverty alleviation strategies in many countries of the region. The average rate of growth of the population in the ESCAP region had declined to 1.3 per cent per annum by 1997. (Khan, Azizur Rahman, "Macroeconomic policies and poverty: an analysis of the experience of ten Asian countries", synthesis paper prepared for the Asian Regional Policy Workshop on Macro Policies and Micro Interventions for Poverty Alleviation, 5-7 February 1997, Bangkok, International Labour Organization, February 1997. The 10 countries covered in the study are Bangladesh, China, India, Indonesia, Malaysia, Mongolia, Nepal, Pakistan, the Philippines and Thailand.) However, the population growth rate in some of the countries with a high incidence of poverty (such as Bhutan, the Lao People's Democratic Republic, Nepal and Solomon Islands) continues to be above 2.5 per cent per annum. Concerted efforts are needed to make family planning services accessible and affordable to the poor and disadvantaged groups, to slow down the population increase in these countries and bring the growth rate down to around 2.0 per cent per annum.

Population policies often extend beyond family planning to cover such aspects as changes in the status of women, improvements in their educational level, and maternal and child health. In this context, the maternal mortality rate in the ESCAP region declined to 386 per 100,000 live births in 1990. However, the rate has been substantially higher, ranging from 570 to 1,700, in a number of countries, including Bangladesh, Bhutan, Cambodia, the Lao People's Democratic Republic, Nepal and Papua New Guinea. More concerted efforts are necessary to reduce the high maternal mortality rates.

The importance of good health from an economic perspective and as a quality-of-life ingredient for both adults and children is well understood. However, the poor in the ESCAP region have limited access to primary health care, both preventive and curative. Among other health-related goals, the Agenda for Action calls for health care to be provided to all and for full access to primary health care by all by 2000. As of 1995, the proportion of the population with access to health services was 80 per cent or more in several countries, including China, India, Indonesia and Sri Lanka. ("Population and development indicators for Asia and the Pacific 1997", ESCAP Population Data Sheet (Bangkok, 1997)).

ACC Task Force on Basic Social Services, Wall Chart on "Basic Social Services for All, 1997" (New York, 1997).

Afghanistan and Bangladesh were among those with the least access (less than 50 per cent).

The Agenda for Action set the targets for reducing infant mortality to 40 or less per 1,000 live births by 2010 and to 35 by 2015. The infant mortality rate in the ESCAP region will average 55 per 1,000 live births in 1997. While many countries and areas have achieved infant mortality rates of 40 or less (for example, China, Kazakstan, Kyrgyzstan, the Philippines, Sri Lanka and Viet Nam), many others, including Indonesia, Kiribati, Mongolia, Papua New Guinea, Samoa and Tajikistan with rates ranging between 40 and 70, will need to intensify targeted interventions to reduce these rates. There is also a need to focus on the reduction of malnutrition, particularly in countries such as Bangladesh, Bhutan, Cambodia, India, Indonesia, the Lao People's Democratic Republic, Myanmar, Pakistan, Papua New Guinea, the Philippines and Viet Nam, where the prevalence of underweight children below 5 years was 30 per cent or higher. Improving the nutritional status of children under five is critical, especially for the development of cognitive abilities and skills that have lifelong effects.

Drugs and substance abuse as well as the spread of HIV/AIDS are creating a new wave of impoverishment. In the early 1990s, the World Health Organization estimated that 2 million adults were infected with HIV/AIDS in the ESCAP region. Currently, of the 23 million people with HIV/AIDS, 5.2 million are in South and South-East Asia (United Nations Development Programme, Human Development Report 1997 (New York, 1997), p. 67).

Its incidence is higher and it is spreading faster in the ESCAP region. Of the 3.1 million new infections among adults in 1996, 1.5 million were in Asia. The poor are particularly exposed since they lack education, information and access to social and health services. Women in poor communities are particularly vulnerable. In many countries, the pandemic has yet to be acknowledged as a developmental problem.

Thailand, one of the countries most affected by HIV/AIDS, has demonstrated strong political leadership in addressing the problem. It has recognized that the issues are not just medical but developmental. Resources are allocated in government budgets for AIDS education and treatment and support for victims; involving communities, those at risk and employers in policy and programme development; addressing the key socio-economic issues that affect vulnerability, including migration, urbanization, poverty and gender disparity.

3. Education and skills

The central goal of development is the strengthening of human resources by improving the education, health and productivity of people and breaking down barriers for men and women to fully develop their abilities and potentials. The economic and social benefits of a literate population support economic growth and enhance the well-being of society. Lack of education and skills and illiteracy are significant correlates of poverty. The goal of providing basic education for all by 2000 is an important element of the Agenda for Action among other targets for education.

Over the past three decades, great strides have been made in improving access to basic education in the ESCAP region. Formal primary schools are being augmented by traditional and religious schools and other innovative non-formal programme schools such as those run by the Bangladesh Rural Advancement Committee. However, significant tasks remain in order to meet the educational targets, including reducing adult illiteracy (especially in South Asia); reducing the gender differentials in primary and secondary school enrolment in Bangladesh, the Lao People's Democratic Republic, Nepal and Pakistan, among other countries; and increasing vocational and skills training for the poor, especially women.

4. Access to assets and economic support services

Many poor people in the region live in rural areas and depend on agriculture for their livelihood. Access to arable land is therefore vital in poverty reduction. Land reform has been one of the most powerful mechanisms for helping the poor and for promoting more equitable and sustainable growth. However, experience with implementation of land reform has been mixed, with the Republic of Korea on the more successful side. Other countries which have tried land reform and new land openings and settlements with some vigour include India, Indonesia, Malaysia and the Philippines. The reforms succeeded in virtually eliminating absentee land ownership and bringing about some improvements in tenancy conditions.

Economic support services to the poor are necessary to help them move out of poverty. The economic services for increasing productivity in small-scale agriculture and off-farm enterprises include credit, information on and skills for production and processing technologies and processes, supply of raw materials and inputs including energy (for example, electricity), physical infrastructure, such as roads and markets, and information on prices and markets. The positive experiences of micro-credit programmes such as those in Bangladesh and Indonesia indicate the scope for further expansion and improved targeting of credit provision to the poor, particularly in the large agricultural sector in this region. Liberalization of financial markets, mobilization of savings, and linking micro-finance institutions to commercial financial markets are being tried with considerable success to generate economic growth and reduce the incidence of poverty.

5. Environmental degradation

Owing to lack of options, the poor are often forced to over-exploit natural resources including land, water, forests and fisheries. The resulting deterioration of resources further aggravates the plight of the poor. Agenda 21 stipulates that poverty alleviation must be an integral part of sustainable development. Innovative programmes are being implemented in a number of countries by devolving the responsibility for management of common resources to the poor and their communities (for example, community management of forest resources in India and fisheries and coastal resources in the Philippines). At the same time, alternative means of earning a livelihood for the poor are being promoted to reduce the pressure on the resources.

Many countries and areas in the region have begun to implement national environmental action plans. Several have introduced environmental regulations to guide and strengthen sound management of resources and to promote sustainable development.

C. Policies to combat poverty

A wide range of policies and strategies have been adopted by the countries in the region to eradicate absolute poverty by 2010. The policies and programmes pursued by the countries to alleviate poverty may be classified into three broad categories. These are (a) macroeconomic policies; (b) policies and programmes in productive sectors; and (c) social policies and programmes.

Some countries have been adept at prioritizing the issues, allocating scarce resources to the priority areas and achieving significant results. Others have tried to spread their limited resources rather thinly to address a wide range of problems, with minimal impact. Macroeconomic policies cover monetary and fiscal aspects, including credit, taxation and public expenditure, prices and sectoral terms of trade, and exchange rate and foreign trade and investment in the external sector. As mentioned earlier, countries that have achieved significant reductions in poverty have experienced moderate to rapid economic growth, though growth alone is not sufficient for poverty reduction. The growth has emanated from both domestic investments and foreign direct investments. Fiscal discipline and opening up of the economies, particularly for export-oriented industries, were critical in attracting foreign direct investment and sustaining rapid growth for extended periods. Public expenditure was directed towards improving the physical infrastructure, improving the skills and expanding the human capital base. Opening the economies to the external sector and global markets was managed in order to capture the benefits of comparative advantages in labour-intensive production and in niche products. While governments were directing the overall strategy through incentives and penalties, the private sector was allowed considerable freedom to identify and exploit emerging opportunities both at home and abroad. This led to rapid and sustained growth based initially on labour-intensive production and skill-intensive production thereafter.

The policies and programmes pursued by these countries included economic stabilization and acceleration of growth, asset redistribution (mainly in the form of land reform and new land opening for settlement), improving productivity in the agricultural sector through intensification of production and diversification to higher value products, keeping in view the comparative advantages, programmes for input subsidy and output price support for selected commodities (such as rice, wheat and milk), support for small-scale and rural industries, and rural employment programmes, including food for work programmes.

For the most part, the macroeconomic policies pursued by many countries were meant primarily to address the stabilization and growth aspects, with poverty reduction to be accomplished through the trickle-down process. The disproportionately heavy burdens of adjustment on the poor and the vulnerable and the unequal distribution of income were seen as unavoidable short- to medium-term costs of rapid economic growth. Increased attention needs to be paid to the incidence of costs and distribution of benefits resulting from these policies. Ideally, the choice of macroeconomic policies should be based not on growth considerations alone but should also keep a focus on social development goals in the package. More equitable sharing of resources, income and services should be facilitated through tax and expenditure policies and appropriate targeting.

The sectoral policies pursued by most countries also emphasized the economic growth aspects, often neglecting their impact on the poor. This should be remedied. While the benefits of asset redistribution and productivity improvement policies and programmes through skills training and upgrading, among others, have generally been positive, experience in the region indicates that targeted poverty reduction policies and programmes (in terms of population targets, priority needs and localities) also have better reach and impact. Micro-credit programmes and other self-help and self-reliance programmes implemented by NGOs and a few progressive public institutions were exceptional in generating tangible benefits targeted at the poor, in both rural and urban areas.

In spite of the importance of agriculture in many developing countries and the concentration of the absolute poor in the countryside, the lion’s share of government expenditure is often devoted to urban areas for non-agricultural purposes. Increased attention and more resources need to be directed to rural areas and to the agricultural sector to improve the productivity of the poor, expand their economic opportunities and improve the social and physical infrastructure in order to help them lift themselves out of poverty.

The Agenda for Action and the Beijing Declaration emanating from the Fourth World Conference on Women (1995) call for more concerted efforts, among other aspects, to promote women’s economic independence, including employment, and to eradicate the increasing burden of poverty on women by addressing the structural causes of poverty and ensuring equal access for all women to productive resources, opportunities and public services. Poverty alleviation strategies aimed at reducing poverty among women would have multiple impacts, including increases in the population’s productivity, reductions in fertility and infant mortality, and alleviation of population pressures. Given their central role in the family, investments in women not only directly benefit them but enable the benefits to pass on to other family members, particularly children.

Poverty alleviation policies could have achieved a greater impact by recognizing and strengthening the linkages with other relevant facets, including economic growth, population planning, human resources development, promotion of social development and protection of the environment. The social policies and programmes encompassed, among others, investments in people through education and health, including population planning aspects, nutrition, water supply, sanitation and shelter. Resource allocations within the social sectors in favour of primary basic services (such as primary education, basic health care and immunization) had a greater impact on reducing poverty. Policies and programmes on social security and social welfare are being either initiated or expanded in a number of countries. Social policies, programmes, laws and regulations to enhance the socio-economic participation of women, the disabled, the productive elderly, minorities and indigenous peoples, and to protect and assist disadvantaged and vulnerable groups, such as children, the dependent old and the sick, all contribute to reducing the poverty burden.

Next: Part 2 of 4 of this paper: The Regional Employment Situation

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