Social Outlook for Asia and the Pacific: Poorly Protected Predrag Savic, Social Development Division, ESCAP Bangkok, November 13, 2018
Outline 1. Poverty as a challenge in Asia and the Pacific 2. Lack of basic services and non-monetary aspects of poverty 3. Current investments on people and its potentials 4. CGE modeling results 5. Conclusion 2
Poverty reduction in Asia and the Pacific 1990-2015 Myanmar Timor-Leste Nepal China Bhutan Viet Nam Indonesia Papua New Guinea Pakistan Bangladesh India ESCAP average Lao People's Democratic Republic Solomon Islands Philippines Sri Lanka Vanuatu Thailand Armenia Fiji Samoa Tuvalu Mongolia Iran (Islamic Republic of) Tonga Kazakhstan Turkey Malaysia Russian Federation Australia Republic of Korea Azerbaijan Japan $1.90 a day $3.20 a day 100 80 60 40 20 0 20 40 60 80 100 Headcount ratio (percentage of population) 2013 1990 2013 1990 3
Challenges remain, ESCAP is still home to almost half of the world s poor Share of global population living on less than $1.90 per day, by regions Rest of the world 2% Latin America and the Caribbean 4% Asia and the Pacific 43% Africa 51% 4
Poverty in Asia and the Pacific is concentrated in South and South-West Asia Share of the Asia-Pacific population living on less than $1.90 per day, by Asia-Pacific subregions East and North-East Asia 6% South-East Asia 11% South and South-West Asia 77% North and Central Asia 5% Pacific island developing States 1% 5
Poverty in Asia and the Pacific is concentrated in South and South-West Asia Absolute number of people living on less than $1.90 and $3.20 per day, top countries The rest of ESCAP 118 million people Pakistan 77 million people Bangladesh 89 million people India 696 million people Indonesia 103 million people China 164 million people 6
Fraction of poverty line (percentage) 80 Poverty Gap Index in Asia and the Pacific, 1990-2015 60 40 Poverty Gap Index $1.90/ day 20 0 20 40 60 Poverty Gap Index $3.20/ day 80 1990 $1.90/day 2013 $1.90/day 2013 $3.20/day 1990 $3.20/day 7
Percentage of GDP Poverty Gap in Asia and the Pacific, as % of GDP 20 18 16 14 12 10 8 6 4 2 0 $3.20/day $1.90/day Amount needed to lift everyone in Asia and the Pacific out of extreme and moderate poverty: 43 bn $ to 1.9 $/day (0.10% of region's GDP), and 419 bn $ to 3.2 $/day (0.94% of region's GDP) 8
Average income per day for top 10, bottom 40 and total population 9
Percentage of households Multiple deprivation levels in Asia and the Pacific 100 90 80 70 60 50 40 30 20 10 0 Deprived of two opportunities Deprived of three opportunities Deprived of four opportunities Deprived of five opportunities Deprived of all six opportunities 10
Multiple deprivation levels in Asia and the Pacific Kazakhstan Maldives Upper-middle income countries Lower-middle income countries Armenia Turkmenistan Philippines Thailand Indonesia Mongolia Low income countries Kyrgyzstan Tajikistan India Viet Nam Nepal Pakistan Bangladesh Bhutan Timor-Leste Myanmar Cambodia Afghanistan Lao People's Democratic Republic 0 10 20 30 40 50 60 70 80 90 100 Percentage of households deprived of more than two opportunities 11
Turkey Iran (Islamic Republic of) Sri Lanka Bhutan Nepal India Pakistan Bangladesh Timor-Leste Viet Nam Thailand Malaysia Indonesia Philippines Myanmar Lao PDR Cambodia Mongolia China Papua New Guinea Fiji Kyrgyzstan Georgia Azerbaijan Armenia Kazakhstan Tajikistan Percentage of GDP Public spending on education, health and social protection as share of GDP, latest years 25 20 15 10 5 0 SSWA SEA ENEA Pacific NCA Education Health Social protection OECD average = Social protection+education+health (20.1% of GDP) 12
CGE model 1. Countries gradually boosting investments to reach global averages: Social Protection: 11.2 %, Education:4.7% Health: 4.2 % 2. Exogenous economic growth kept constant = baseline year 3. Investments - Human capital and TFP real income and consumption demand for health and education = virtuous circle 4. Impact on growth and inequality? 13
Countries lifted out of poverty Countries lifted out of extreme poverty by boosting spending on people, CGE model results 8 7 6 + 4 countries (ARM, KGZ, LKA, TJK) 49 million people + 5 countries (4 since 2020 +GEO) 63 million people Social protection: +6 countries (BGD, IDN, KGZ, MMR, NPL, PHL) 51 million people 5 4 3 2 +2 countries (LKA, TJK) 42 million people + 1 country (LKA) 25 million people + 1 country (LKA) 19 million people + 2 countries (ARM, IND) 24 million people +3 countries (ARM, IND, KGZ) 32 million people 1 0 2020 2025 2030 BAU + Education BAU + Health BAU + Social protection BAU + Sp + Edu + Hlth Business as usual (BAU) 14
Additional number of countries Countries lifted out of $3.2 poverty by boosting spending on people, CGE model results 6 5 4 3 +1 country (MYS) 110 million people + 1 country (MYS) 95 million people +3 countries (AZE, MYS, THA) 126 + 3 countries (AZE, MYS, THA) million people 201 million people + 2 countries (IRN, MYS) 245 million people + 1 country (MYS) 167 million people 2 1 + 2 countries (AZE, THA) 67 + 2 countries (AZE, THA) 88 million people 0 2020 2025 2030 BAU + Education BAU + Health BAU + Social protection BAU + Sp + Edu + Hlth Business as usual (BAU) 15
Spending per sector (US$ billion) 7,000 6,000 Financing gap to reach global averages in spending on people 5,000 financing gap USD 4,213 billion 4,000 3,000 financing gap 2,000 1,000 financing gap - education health social protection SUM education health social protection SUM education health SP SUM 2020 2025 2030 Spending per sector in BAU Financing gap to reach global averages 16
Policy Options and Recommendations Better data and research identifying those left behind Political commitment Public support & trust in institutions Multi ministerial & stakeholder collaboration Strengthen social protection Reducing poverty requires Decent work creation and labour market interventions Boosting investments in people Understanding the impact and drivers Human rightsbased approach 17
Thank you!