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Tackling Asia's Inequality

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Tackling Asia's Inequality Food Crisis Mekong Toward Could Media Eco-Friendly Come Back Makeover Tourism A Publication of the Asian Development Bank No. 2 December 2008 Tackling Asia’s Inequality Creating Opportunities for the Poor 2 CONTENTS l No. 2 December 2008 38 TOWARD ECO-FRIENDLY COVER STORIES l TOURISM Hosting visitors in villages brings benefits and 12 InCLUSIVE GROWTH: challenges WHY IT IS IMPORtant Striving for equal access to opportunity is 40 Can THE FOOD CRISIS RETURN? essential By John Berthelsen Any of a number of factors could reignite 13 TOWARD AN EQUAL FUTURE: “agflation” MAKING GENDER EQUALITY A REALITY 45 NEWS FROM THE BOTTOM UP Women lack voice in all aspects By Red Batario of decision making Community media for addressing social 28 HUMBLE BUT GIFTED issues A mathematics wizard gives poor students a chance 29 SHIFTING ROLE OF SMEs In Indonesia, focus needs to shift to productivity, not jobs 31 Land OF OPPORTUNITY By Philip Bowring Tax or spending policies in Hong Kong, China can reduce inequality 14 COPING WITH THE CRISIS By Philip Bowring 33 THE GReat DIVIDE Asia’s remedy to the end of US By Donald Greenlees consumption excess In Republic of Korea, the gap widens between export sector and the rest 16 ASIA’s DELICate BALANCING ACT DEPARTMENTS l By Daniel Altman Low or moderate levels 6 ROUNDUP of inequality may be healthiest 8 ASIA BY NUMBERS 20 PILGRIMS OF PROGRESS 9 ON RECORD India’s growth is creating jobs despite structural inequalities 10 OUTLOOK Asia’s Anti-Graft Center 22 FeW OPTIONS FOR YOUTH Despite growth, the Philippines’ joblessness 42 IN FOCUS remains high Viet Nam 24 NEW ENTRIES OUTSTRIP JOBS 47 CALENDAR Interview with Philippines’ Finance 47 NEW PROJECTS Secretary Margarito Teves FEATURES l 49 INNOVATION 25 POWER TO THE POOR Engineers Without Borders Training in self-empowerment is sustainable 34 MekONG MEDIA MAKEOVER 50 NEW PUBLICATIONS 27 POOR OFTEN Can’T HELP Market pressures are enlivening State- Pros and Cons of Nanotechnology THEMSELVES controlled media Nature and Causes of Inequality By Abhijit V. Banerjee and Esther Duflo 36 FORTUNE at THE BOTTOM 52 FROM THE FIELD Motivation of the disadvantaged is not fully Business can profit while benefiting the poor Helping AIDS Orphans understood How Much Should Inequality Matter? www.development.asia R © 2008 Asian Development Bank Abrina ichie ISSN 1998-7528 ASIAN DEVELOPMENT BANK PUBLISHER Ann Quon EDITORIAL AND CREATIVE DIRECTOR Carolyn Dedolph Cabrera ne worrisome trend in Asia is growing inequality—the rich are getting richer EDITOR AT LARGE Ian Gill much faster than the poor. The issue was brought into sharp focus with the EDITOR Chay F. Hofileña current financial turmoil, which is having a much greater impact on the poor EDITORIAL AdvISORS than the rich. Juzhong Zhuang and Rana Hasan OHow much should inequality be a cause for alarm, if at all? What are the implications CONTRIBUTING EDITOR Jose R. Dalisay, Jr. of a widening social divide? Should governments do something—or nothing? Our stories COPY EDITOR Ma. Priscila del Rosario on this cover theme look at many aspects of a complex issue. Our guest economists ART DIRECTOR Anthony Victoria present the case for and against interventions toward social inclusion, though they tend GRAPHICS to support policies that promote equal opportunity and access to good education and Gerry Castro, Ronnie Elefaño, Rommel Marilla basic health services. PRESSGROUP HOLDINGS One of our main stories looks at the role of globalization in increasing well-being at EUROPE S.A. all levels of society, but it also notes that the well-to-do are better placed than the poor PUBLISHER Angus McGovern to take advantage of the opportunities that globalization offers. PRODUCTION COORDINATOR We provide contrasting profiles of India and the Philippines. One shows how strong Richard Forster growth can create jobs for the poor despite structural inequalities. The other illustrates Development Asia features development issues important how even robust growth can fail to provide enough jobs because of structural inequalities. to the Asia and Pacific region. It is published twice a year by the Asian Development Bank and Pressgroup Holdings We also show how inequality is becoming more divisive in developed economies such as Europe S.A. The views expressed in this magazine are the Republic of Korea and Hong Kong, China. those of the authors and do not reflect the views and policies of the Asian Development Bank. Use of the term What can the poor do to help themselves? We show how, with dedication and patience, “country” does not imply any judgment by the authors the poor can be empowered to choose and implement village-level projects. However, or the Asian Development Bank as to the legal or other status of any territorial entity. another view argues that the poor are often too focused on the struggle for survival to take adequate advantage of assistance. COMMENTS Send your feedback to the editor at We show how small enterprises in Indonesia, which provide the vast majority of jobs [email protected] for the poor, need to switch their focus on increasing productivity. We also report on how ADVERTISING big business can benefit if they pay closer attention to the needs of the poor. To advertise in Development Asia, inquire at We also look at how Asia should cope with the financial turmoil and economic reces- [email protected]. sion in large parts of the West. The slowdown in Asia may increase poverty with likely SUBSCRIPTIONS knock-on effects, such as loss of jobs, especially in the export sector, and falling remit- Contact [email protected]. tances from overseas. But it may also reduce inequality if the better-off are harder hit by REPRINTS Reprinted and translated articles should be credited the stock market crashes and drops in property values, as happened in some countries “Reprinted from Development Asia.” Reprinted articles during the Asian crisis in the late 1990s. with bylines must have the author’s name. Photographs In another report, we show how, although “agflation”—the massive and sudden jump not owned by ADB require permission from the copyright holder for reprinting. Send a copy of the in food prices—has been overshadowed by financial crisis, it could be sparked off again by reprinted article to the editor. any number of factors, leading many to the brink of starvation. Development Asia We also examine the growing role of “community journalism” in giving more voice to Department of External Relations the poor as well as how state-controlled media in the Mekong region are changing as their Asian Development Bank 6 ADB Avenue, Mandaluyong City economies become more market-oriented. 1550 Metro Manila, Philippines We hope this issue, which spotlights several other development challenges, is provoca- [email protected] www.adb.org tive as well as interesting. We welcome your views on Development Asia and what you would like to see in future issues. Address your letters to the editor or e-mail editor@ Pressgroup Holdings Europe S.A. San Vicente, 16-6-1 development.asia. 46002 Valencia, Spain Tel +34 96 303 1000 Fax +34 96 303 1234 [email protected] Cover: Ann Quon Note: In this publication, “$” refers to US dollars. Publisher 4 Development Asia l December 2008 LETTERS to THE EDItor l Biofuels Can Be a Long-Term Solution Water Level our article, biofuels. Issues that can render biofuels a Doesn’t Rise When Miracle or menace can be effectively addressed if the Ice Cap Melts YMenace, was biofuels program is selectively and strategi- a little disappointing cally applied, such as no deforestation, food he first issue of Development Asia is as it focused more on security, and land rights issues if only non- well written and touches on many the “menace” aspect forested, non-fertile lands are used; and, Timportant issues. Unfortunately, of biofuels—in terms if relevant, indigenous peoples’ rights are I came across a mistake reflected by the of being a threat to observed. On the emission side, whatever headline: “Disappearing Arctic Ice Cap food security, land the source, biofuels or not, mitigating mea- May Flood Asia.” The Arctic ice cap is rights issues, defor- sures will be put in place anyway. A country largely submerged under water. Like an estation, greenhouse has to be clear on its biofuels vision-mission ice cube in a glass of water, the water level gas emissions, and as a temporary solution. to effectively set its scope and areas and does not rise when the ice cube is melt- The positive side was not presented suf- mechanics of implementation. ing. This is physics. The sea level may be ficiently, thus giving the impression that Biofuels can be an acceptable alternative, rising for other reasons, such as melting biofuels cannot be a rational, ecological especially in the island provinces that cannot glaciers, but nobody expects a rise by one choice to replace fossil fuels. Biofuels can be be connected to the national grid and whose meter as stated in your article. According a long-term solution to our energy situation. only hope is to develop indigenous resources to figures in the latest report of the Inter- Considering that the Philippines is almost within their financial capacity. An example governmental Panel for Climate Change, completely dependent on imported fuels is the Calamianes island group in northwest which appears to be the most authorita- for transportation and power generation and Palawan where power plant generators run tive source, a rise of only 38.5 centimeters that the international price of fossil fuels at a loss and for only a few hours a day as they can be expected. Even this is bad enough, remains high, biofuels are not so much a do not have funds to buy diesel.
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