Many young Asians have known only two kinds of economic growth fast and faster. But what about the problems that cannot be resolved by growth alone? Time recently partnered with the Asia Business Council and the Lee Kuan Yew School of Public Policy at the National University of Singapore to organize Asia's Challenge 2020, an essay contest. Young Asians were asked to identify the region's biggest challenge and say what should be done. The winner is 26-year-old Sarabjit Singh, an Indian national running a software start-up in Singapore. An abridged version of his essay is printed here. The full version, together with essays by three runners-up, can be read at time.com/time/specials.
It's a friday night by orchard road, in Singapore's main shopping district, and an elderly woman sits down in the middle of a square. Competing against the alluring shop windows of high fashion and the slick frontages of restaurants that charge more per meal than she spends on food in a week, she touts wares of her own packets of tissues, held almost in a gesture of supplication. Distracted by thoughts of the weekend, the flowing multitudes pay her no attention, and thus begins another night of struggle for this woman who has no pension fund or social security, and whose daily bread depends entirely on how many packets of tissues she can sell. Tiny fluctuations in her absurdly small daily earnings matter more to her than the ups and downs of any stock market. And yet, if you could pull back from this tiny island to gaze across the entire expanse of Asia, you would see that she is simply one of millions.
From the homeless have-nots huddled together in the cold subways of Seoul, watching the smartly dressed haves hustle from swanky offices to heated homes, to families sheltered in wooden shacks alongside Mumbai airport, listening to the thundering roar of airplanes full of affluent business travelers landing beside them, jarring illustrations of inequality abound across Asia. That most of the region's economies will continue to develop in the coming decades is not in doubt. What is not certain, however, is how the benefits will be divided. The number of impoverished Asians is increasing, and if there is one challenge above all others that policymakers in the region need to address within the next decade, it is that. Inclusive development must be offered to all Asians.
The Multidimensional Poverty Index a measurement developed under the auspices of the U.N. Development Programme recently found that "eight Indian states account for more poor people than in the 26 poorest African countries combined." This might come as a surprise to international audiences, conditioned by a steady diet of puff pieces and gushing headlines to think of India as being in the throes of an economic surge. But those living in India itself know that if you're lucky enough to own a BMW or Mercedes, you had better get used to the beggars that will swarm to it at the traffic lights. Tellingly, the top 10% of India's population possesses 31.1% of the country's income, but the lowest 10% commands only 3.6%. The numbers don't get better if you look to the country's more populous neighbor. According to a Credit Suisse sponsored report released earlier this year, the average per capita income for the richest 10% in China is 65 times higher than that of the bottom 10%. Regionally, too, the situation is deteriorating. The Gini coefficient of income a commonly used measure of income inequality worsened for most Asian countries throughout the 1990s.
A 2007 report by the Asian Development Bank identified a litany of problems associated with rising inequality. It can trap the poor in an inescapable spiral, shutting them out from access to credit, education or business opportunities, and can impose tremendous social costs, "ranging from ... street demonstrations all the way to violent civil war." Large numbers of the poor and the marginalized can band together in groups of sizable clout, or be brought together by political parties with populist agendas. And with technology now connecting previously far-flung regions of a country and other countries with each other, the underprivileged can now more easily gape at the affluence of their countrymen and of Asians in other nations, potentially inflaming their grievances even further.
Inequality can also exacerbate other problems. Richard Wilkinson, in his book The Spirit Level: Why More Equal Societies Almost Always Do Better, drew a correlation between higher socioeconomic inequality and "shorter life expectancy, higher disease rates, homicide, infant mortality, obesity, teenage pregnancies, emotional depression and prison population." Uneven wealth distribution makes it more difficult to cope with ethnic or religious conflicts, demographic pressures (rising poverty means more people without access to family planning) and even natural calamities (the greater the number of poor, the greater the number of people living in marginal accommodation, vulnerable to floods, fires, storms and earthquakes).
In looking to address income inequality, a good first step for governments around the region would be to offer equality of opportunity. It will not eradicate poverty. But it will be an important step toward preventing it from growing further, without compromising the market forces that have driven Asia's economic growth. Creating equality of opportunity will require courageous policymaking in several areas in rural development, for instance. Here, the example of Mexico could be an instructive one for Asian planners. Over the past decade, a depreciation in rural poverty contributed significantly to the economic growth of that developing nation and led to greater opportunities and subsequent reductions in inequalities of wealth. According to a World Bank report, "Between 2000 and 2004, extreme poverty fell almost 7 percentage points, which can be explained by development in rural areas, where extreme poverty fell from 42.4 percent to 27.9 percent." The factors that contributed to this reduction included "macroeconomic stability ... and the diversification of income from non-agricultural activities, such as tourism and services."
Some of Asia's rural sectors are already diversifying, but there is much more to be done. Mohandas Gandhi said that India lives in its villages. Sixty-three years after the country's independence, his words are still true. Some 72% of the country's 1 billion plus population today lives in rural areas. In Nepal, the rural population makes up 85% of the total, in Sri Lanka 79%, in Bangladesh 76% and in Pakistan 66%. For much of their history, the rural regions of these countries have formed the breadbasket of South Asia and the Himalayas. But with the rapidly declining share of agriculture in the GDPs of those nations, it is imperative that there now be new avenues for development. And it is only right that we should take growth to the countryside, instead of luring rural migrants to the cities. Sound rural-development policies enable families and communities to stay together, and reduce migratory pressures on urban centers, which in Asia are reeling from the effects of exploding population densities and overburdened infrastructure.
Those in the upper strata of the region's income earners the ones who live in a world of bright shopping malls, well-built homes and functioning utilities may find it all too easy to forget about the legions of the rural poor, dwelling in some darkened hinterland, beyond the reach of services and conveniences that many take for granted. And yet it is essential for the continued development of this region that the needs of those populations be met, and met urgently. We can sidestep the issue, or ignore it and press on with our own private concerns. But like the old woman by Singapore's Orchard Road, it holds us in silent and baleful reproach.