Date: Tue, 11 Apr 95 12:58 EET|
From: Inter Press Service Harare <email@example.com>
North-South Gap Emerging in the East
By Johanna Son, Inter Press Service Harare
11 April 1995
Manila, Apr 11 (IPS) - The chasm between Asia's fast-growing
nations and its laggard economies is creating a regional
landscape that is starting to mirror North-South disparities.
Asia evokes impressive images of economies growing at
breakneck speed. It is home to Japan, whose per capita income
ranks third in the worlds, and tiger economies whose living
standards rival those of European nations.
But the world's fastest-growing region is also home to some
of the world's poorest nations, whose per capita incomes fall
below 200 dollars and have no place in slick investor briefs on
Bangladesh, Cambodia, Nepal and Bhutan are near the bottom of
the United Nations' Human Development Index. Half of the world's
1.3 billion poor live in South Asia, and India alone has 27
percent of the global figure.
Seven of 10 developing countries with the most number of poor
are in Asia, h, Indonesia, Vietnam, the Philippines, Pakistan
and China. Nine percent of China's population lives in poverty,
compared to India's 40 percent.
There may well be two Asias, rich and poor. The North-South
gap has come to the east, creating an 'east-south' gap.
In 1993 the World Bank said East Asia, whose poor fell from
35 percent of the populace in 1970 to 10 percent in 1990, may
well be ''the first developing region to overcome the poverty
But large gaps remain within Asia. south Asia's 5.1 percent
growth in 1994 was the best in four years, but it still lags
behind south-east Asia's 7.5 percent. In its 'Annual Development
Outlook 1995 and 1996', the Asian Development Bank (ASDB) says
south Asia will continue to trail east and south-east Asia.
''The growth experience of east and south-east Asia has
diverged substantially during the past two and a half decades,''
says assistant chief economist J. Malcolm Dowling, due to
differences on economic reform and investments and savings
Mainly agrarian transitional economies like Cambodia, Laos,
Burma and Vietnam, the central Asian republics and the Pacific
island economies have yet to share in richer Asia's boom.
A clear sign of poverty and inequality within Asia is cross-
border migration that is rising as affluent nations try to
control it. There are now millions of intra-Asian migrants as
Asia replaced the Middle East as migrants' main destination in
Nationals from Bangladesh, Sri Lanka, the Philippines, Thailand
and Burma take their chances in richer nations like Japan,
Taiwan and Korea or labour-short Malaysia, Singapore and
As in the global North-South gap, critics are pointing out
not just intra-Asian disparities but what they say is richer
nations' exploitation of poorer ones just opening up to the
Asia's wealth has so fired its profit-making instincts that
its richer nations go into new frontiers scouting for business
deals that are of dubious development value, activists argue.
They are protesting four Indochinese countries' signing of a
Mekong River Accord in April, which would include dam-building
along the river. They say this would serve commercial interests
of investors and multilateral banks like the ASDB that are
taking advantage of weaker and foreign exchange-hungry
The spotlight is also focusing on Japan, biggest contributor
to the ASDB and funder of three hydroelectric projects in Laos.
Kazuo Sumi of Japan's Niigata University, author of books on
Tokyo's Aid, says the motive is plain and simple business. He
said: ''Japanese firms first went to Korea in search of lower
costs and then to Thailand, Indonesia, Malaysia and the
Philippines. Now they are looking at China, Vietnam, Cambodia,
On the eve of its may annual meeting in New Zealand, even the
ASDB is under scrutiny by groups that ask whether the bank-led
entry into Indochina is predatory development that helps foreign
businessmen more than local economies and peoples.
Sumi cited the example of the Nam Leuk dam project in Laos,
to be funded by Japan and the ASDB. In October the bank, also
involved in the Arun III dam project in Nepal, approved Laos'
Theun-Hinboun hydropower project which will export energy to
''This 'development' is for whom? The main objective is
electricity for the Thais and not for Laos. If it is for (Laos')
self-sufficiency, it is not needed,'' he said.
But the ASDB says growth aided by external funds into nations
with low savings and investments does ease poverty. It cites
drastic poverty decline in east Asia, whose high savings, strong
exports and ability to attract capital ensure its growth ''will
still be faster than elsewhere in the world,'' said the bank.
To put more stress on social sectors, the bank aims to
achieve a 50-50 mix between traditional growth projects hand
and programmes for poverty reduction, human resources, women
and the environment.
Dowling says countries that get concessional loans from the
Asian development fund are showing results, the improved
performers being Nepal which in 1994 reached its best economic
performance in a decade, Indonesia and the Philippines.
Awareness may be rising that aid, through Asian, still needs
to be evaluated against local needs. In Cambodia, fledgling NGOs
caution that the poor country must learn to say no to
undesirable aid as it is at risk of overdependence on foreign
''In some ways there's too much money for Cambodia. Let's not
talk about money first before deciding on our vision,'' activist
Sochua Mu Leiper said. Added the cooperation committee on
Cambodia: ''There is evidence to suggest that Cambodia and its
people are more vulnerable today than at any time since the
Japan has also sent Cambodia harmful pesticides as
agriculture aid. But as one agriculture expert told IPS, while
''others can tell Japan what they want, a country like Cambodia
Other upcoming Asian powerhouses are also investing abroad,
but not all are welcome. Malaysian firms have come under fire
for logging in Pacific islands. Countries like Korea are
becoming donors too, after graduating from aid and lending
Perhaps Asia's future donors could learn a few lessons from
their predecessors. Meantime poorer Asia is learning that while
more investors and donors are coming from their own backyard,
'Asian' does not necessarily mean better, or more altruistic,
donors and investors.