While Americans are worried about dips in their 401Ks, Asians are increasingly worried about more important things, like feeding their families, as the global recession continues to play out. I'm currently on my way to Asia (first Japan, then China and Hong Kong) with members of the Honolulu based East West Center, where I'm going to be studying the effects of the financial crisis here, and already, it's clear that one major challenge is increased poverty.
The last couple of boom decades had done a lot to decrease poverty in Asia -- since 1990, the percentage of the population living on a dollar a day had decreased from an incredible 55 percent, to less than 10 percent. That means that the number of desperately poor went from nearly 900 million, to fewer than 200. This is largely off the back of China's rise. Btw, I've interviewed a number of officials and economists within China that feel that their nation should receive a Nobel Prize for alleviating poverty. No joke.
Anyway, all this is good news, because unlike in past crises, Asia is starting from a much richer base. That said, poverty estimates are rising much faster than officials thought they would. The World Bank expects that about 53 million fewer people in Asia can expect to rise out of poverty than before the crisis began. And there will be an even more significant future knock-on effect, because lots of those people will pull their children out of school, or not feed their families adequately (childhood malnutrition can wreak havoc on the economic future of a nation – just witness the difference in health and productive capacity of the populations in North and South Korea).
There are also danger factors now that didn't exist during, say, the Asian financial crisis. Back then, lots of extremely poor city dwellers simply moved back to their rural homelands, living off the land until jobs returned. Now, thanks to massive Asian urbanization, that's harder to do. So far, countries seem to be managing all the social upheaval, but it's going to be interesting to see what the political fallout of all this will be. As I'll cover in another post, history shows us that the bigger the economic crisis, the bigger the political changes in store for the world.
