Global Policy Forum

Fighting Poverty

By Ifzal Ali *

Behind the news of Asia's booming economies, vast pockets of persistent and paralyzing poverty remain. China raised eyebrows around the world with 11.3 percent growth in the second quarter of this year, but 42 percent of all Chinese continue to live on the equivalent of less than $2 a day. In India, three-quarters of the population - more than 800 million people - survive each day on less than the cost of a Starbucks latte.

All told, almost 1.9 billion people, or 60 percent of all Asians, still live in poverty. But Asia's deep and rapid economic expansion creates an opportunity for a sharper focus on eliminating the roots of poverty. Education and health are critical areas where the state must take the lead. Many Asian governments are well placed to make decisions that could lead millions of their people out of desperate situations.

Health-related shocks are among the most common events pushing people into poverty, and education is one of the most important stepping stones out of chronic want. Making education and health care available to the poor can, over time, position them to capitalize on opportunities to enter the formal economy and help close the wide gap between rich and poor. Countries that create this kind of "inclusive" growth beat poverty and build political and social stability.

To address social inequalities that hinder poverty reduction, three factors must come into play. First, policy makers and civil society must commit to improving primary health care and basic education for the poor, not only in rhetoric but also in practice.

It is hard to find anyone who doesn't believe children should be healthy and in school. But the picture on the ground in much of Asia is disturbing. In many countries, child-mortality rates for the poor are two to three times higher than those for the rich; primary-school age children from poorer households are almost three times more likely to be out of school than those from richer households. Larger numbers of children are being left behind.

The picture in India is particularly startling. Almost half of all Indian children below the age of five are underweight. Infant and child mortality rates are higher than in Bangladesh and Nepal. More surprisingly, India's level of child malnutrition is higher than that in sub-Saharan Africa.

Second, countries must examine why education and health services are not available to, or not being used by, the poor, and design policies and remedies based on country-specific evidence and experience.

Both supply- and demand-side constraints could be hampering improvement. On the supply side, a lack of focus on serving poor communities may be a key challenge. The poor often lack political power, and their needs often fall down the list of priorities as a result. In such cases, change will likely be needed at the institutional level to establish and maintain elementary education and basic health policies that mandate equal access. Countries like Sri Lanka and Vietnam have succeeded in directing funds to promote access for the poor and now see low enrollment inequalities.

On the demand side, individual household situations - such as the parents' level of education and income - are more important than access to a school in determining whether a child actually attends classes. Evidence from India suggests ethnicity and caste are also important factors.

Asia's experience offers some solutions. Carefully targeted programs such as conditional cash transfers, food-for-education programs, midday meal programs, school health services and scholarships for girls are highly effective in getting poor kids in school and keeping them there.

Third, once the challenge is clearly identified and the best remedies are selected, policy makers must be held responsible for making the solutions work. The public will need to hold the government accountable for ensuring that funds allocated to pro- poor education and health programs actually reach poor communities and are spent wisely.

Evidence from Asia shows overwhelmingly that economic growth has the greatest impact on poverty reduction in educated populations with lower levels of income inequality. Governments can learn from this experience and spread the benefits of Asia's rapid growth by investing in the future of the poor.

About the Author: Ifzal Ali is the chief economist of the Asian Development Bank, based in Manila.

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