KUALA LUMPUR (May 6): Emerging risks and destabilizers as diverse as widening income inequality, slower growth, and climate change are reshaping Asia’s economic landscape so rapidly that governments must build far greater resilience into their national plans, according to the Asian Development Bank’s (ADB) Independent Evaluation Department (IED).
In a statement on its website yesterday, the ADB said the IED’s 2016 Annual Evaluation Review (AER) concluded that the urgency for countries to adapt to the new environment is growing.
It said countries in Asia and the Pacific were already grappling with slower economic expansion and falling international trade, and need to find new growth drivers while maximizing the contributions of existing industries.
“The region’s economic prospects are increasingly linked to the ability of China and India to address their economic, environmental, and climate challenges.
“Asia today is also more exposed to external shocks through the closer integration of global markets,” it said.
The AER highlighted the scale of this challenge.
It said latest data put the number of people living in extreme poverty in Asia and the Pacific—based on a person living on less than US$1.90 a day in 2011 purchasing power parity terms—at just over 450 million.
“More than 1.3 billion people living on less than US$3.10 a day are at high risk of falling back into poverty due to vulnerability to shocks and the proximity of their incomes to the poverty line.
“Meanwhile, inequality is rising in a number of the region’s more populous countries, such as China, India, and Indonesia,” it said.
The AER said the benefits and costs of Asia’s growth were becoming increasingly clear in its cities.
It said the region already has 13 or the world’s 23 megacities, and its urban population is expected to nearly double from 1.6 billion in 2010 to 3 billion by 2050.
“These trends highlight the vital importance of addressing urban issues such as water supply, sanitation, and, arguably most important of all, pollution,” it said.