East Asia's Economies to Grow Over 7 Pct.
Tuesday November 9, 2:39 am ET
By Hrvoje Hranjski, Associated Press Writer
East Asia's Economies to Grow More Than 7 Percent This Year, Poverty at Lowest Level Ever
MANILA, Philippines (AP) -- A fifth year of powerful economic growth in East Asia and the Pacific has driven the number of people living in poverty in the region to its lowest level ever, but the World Bank warned Tuesday that oil prices could dampen the boom next year.
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Led by China's strong performance, growth in East Asia -- excluding Japan -- is projected at 7.1 percent. For developing countries, it will be 7.9 percent, the World Bank said in a report. At the same time, the region's population has jumped by about 4 percent, to around 1.85 billion.
The remarkable growth has brought the number of people living on $2 or less a day down to 636 million, or about a third of the population -- as compared with nearly 890 million five years ago.
With an average growth of 6 percent a year since 1999, "there could hardly be more striking evidence as to the power of sustained economic growth to reduce poverty," the bank said.
"Even excluding China, the absolute number of poor would be at their lowest level ever, finally overcoming the higher poverty created by the 1997 crisis," said Jemal-ud-din Kassum, regional vice president for East Asia and Pacific.
However, the report warned that recent growth in Asia has peaked and economic activity is shifting -- if it hasn't already -- to lower gear. It said the outlook for 2005 looks less favorable because of the spike in oil prices, slower growth in rich countries and a slowdown in global demand for information technology products.
"In a word, the environment facing East Asia is more uncertain," it said.
In April, the bank predicted the region would grow 7.3 percent in 2004 and 6.5 percent in 2005. The latest report cut the 2005 forecast to 5.9 percent.
High growth in Asia is led by strong exports, supported by demand from China, the global recovery, a rebound in the global high-tech industry, and strong commodity prices.
Kassum also noted that the expansion was taking place "during a time of major political advances with a sweep of legislative and presidential elections, including Indonesia's first-ever direct election of a president, capping what looks like being a remarkable year for the region."
Efforts by China, which has two-thirds of Asia's poor, to reduce poverty dominated the regional picture, the bank said.
Poverty in China is estimated to have fallen to about 32 percent in 2004 from 34 percent in 2003 and 70 percent in 1990, driven by significant gains in rural income -- mainly due to increased agricultural output, higher grain prices, introduction of direct subsidies to farmers and reduction in agricultural taxes.
But the World Bank study of poverty in China, which mainly affects rural areas, cautions that widening income inequality has partly offset the benefits of growth.
The study attributed China's agrarian reforms of the early 1980s to over half of all the poverty reduction in 1980-2001. Indonesia, Thailand and Vietnam also have made major strides.
Between 1998 and 2002, 8 percent of Vietnam's 80 million population moved out of poverty, particularly in the tourism-vibrant northeastern corner, the bank said. But it added that the progress was uneven, with little or no reduction in three out of the country's eight regions.
In Thailand, poverty has fallen from 22 percent in 2000 to an estimated 14 percent this year, benefiting from stronger economic growth and the boost to rural incomes given by higher world prices for Thailand's export crops.
Elsewhere in the region, poverty reduction has been less robust.
In the Philippines, which is facing a growing foreign debt and deficit, average family expenditures have declined, while in Cambodia, estimates suggest that poverty at $1 a day has been flat in a 40 percent-50 percent range in recent years, the bank said.
The World Bank: http:www.worldbank.org
Tuesday November 9, 2:39 am ET
By Hrvoje Hranjski, Associated Press Writer
East Asia's Economies to Grow More Than 7 Percent This Year, Poverty at Lowest Level Ever
MANILA, Philippines (AP) -- A fifth year of powerful economic growth in East Asia and the Pacific has driven the number of people living in poverty in the region to its lowest level ever, but the World Bank warned Tuesday that oil prices could dampen the boom next year.
ADVERTISEMENT
Led by China's strong performance, growth in East Asia -- excluding Japan -- is projected at 7.1 percent. For developing countries, it will be 7.9 percent, the World Bank said in a report. At the same time, the region's population has jumped by about 4 percent, to around 1.85 billion.
The remarkable growth has brought the number of people living on $2 or less a day down to 636 million, or about a third of the population -- as compared with nearly 890 million five years ago.
With an average growth of 6 percent a year since 1999, "there could hardly be more striking evidence as to the power of sustained economic growth to reduce poverty," the bank said.
"Even excluding China, the absolute number of poor would be at their lowest level ever, finally overcoming the higher poverty created by the 1997 crisis," said Jemal-ud-din Kassum, regional vice president for East Asia and Pacific.
However, the report warned that recent growth in Asia has peaked and economic activity is shifting -- if it hasn't already -- to lower gear. It said the outlook for 2005 looks less favorable because of the spike in oil prices, slower growth in rich countries and a slowdown in global demand for information technology products.
"In a word, the environment facing East Asia is more uncertain," it said.
In April, the bank predicted the region would grow 7.3 percent in 2004 and 6.5 percent in 2005. The latest report cut the 2005 forecast to 5.9 percent.
High growth in Asia is led by strong exports, supported by demand from China, the global recovery, a rebound in the global high-tech industry, and strong commodity prices.
Kassum also noted that the expansion was taking place "during a time of major political advances with a sweep of legislative and presidential elections, including Indonesia's first-ever direct election of a president, capping what looks like being a remarkable year for the region."
Efforts by China, which has two-thirds of Asia's poor, to reduce poverty dominated the regional picture, the bank said.
Poverty in China is estimated to have fallen to about 32 percent in 2004 from 34 percent in 2003 and 70 percent in 1990, driven by significant gains in rural income -- mainly due to increased agricultural output, higher grain prices, introduction of direct subsidies to farmers and reduction in agricultural taxes.
But the World Bank study of poverty in China, which mainly affects rural areas, cautions that widening income inequality has partly offset the benefits of growth.
The study attributed China's agrarian reforms of the early 1980s to over half of all the poverty reduction in 1980-2001. Indonesia, Thailand and Vietnam also have made major strides.
Between 1998 and 2002, 8 percent of Vietnam's 80 million population moved out of poverty, particularly in the tourism-vibrant northeastern corner, the bank said. But it added that the progress was uneven, with little or no reduction in three out of the country's eight regions.
In Thailand, poverty has fallen from 22 percent in 2000 to an estimated 14 percent this year, benefiting from stronger economic growth and the boost to rural incomes given by higher world prices for Thailand's export crops.
Elsewhere in the region, poverty reduction has been less robust.
In the Philippines, which is facing a growing foreign debt and deficit, average family expenditures have declined, while in Cambodia, estimates suggest that poverty at $1 a day has been flat in a 40 percent-50 percent range in recent years, the bank said.
The World Bank: http:www.worldbank.org
