In its Key Indicators for Asia and Pacific 2022 report released today, ADB noted that the region’s economic growth this year was expected to reduce extreme poverty – defined as living off on less than US$1.90 (RM8.53) a day – to a level that would have been achieved in 2020 had the pandemic not happened.
“Due to lack of available data, it is challenging to predict how the Covid-19 pandemic may have reshaped social mobility.
“However, data simulations showed that people in the region with lower levels of social mobility – the ability to escape poverty – may experience longer-lasting setbacks,” it said.
The report highlighted that the Covid-19 crisis interrupted a long trend of poverty reduction in Asia and the Pacific.
Although economies were recovering, progress was uneven as the pandemic may also have worsened forms of poverty beyond income, such as food insecurity and inadequate access to health services and education, the report said.
Among developing Asian economies with available data, it said, about 69% had less equitable distribution of economic prospects than what the level of income inequality prior to the pandemic implied.
This suggests that even before the pandemic, the magnitude of long-term disparities between the poor and non-poor was greater than the level of income inequality shown in many parts of the region.
ADB chief economist Albert Park noted that the poor and the vulnerable had been hit hardest by Covid-19, and while economies were recovering, many people may find that getting out of poverty was even more difficult than before.
“Governments in the region should focus on resilience, innovation, and inclusiveness to provide more balanced economic opportunities and greater social mobility for everyone,” he said.
By 2030, the report said the prevalence of extreme poverty in the region was expected to drop below 1%. At the same time, about 25% of the population was projected to achieve at least middle-class status, defined as having income or consumption of US$15 (RM67.31) or more a day, adjusted for purchasing power parity.
“However, this outlook is threatened by differences in social mobility as well as other uncertainties. Developing Asia faces the potential for stagflation, ongoing conflicts involving key global actors, increased food insecurity and energy price shocks,” said the report.
It noted that assuming that societies with higher levels of social mobility prior to the pandemic could more easily revert to their former poverty reduction paths, the pandemic may have longer consequences that are yet unknown.
“For instance, the full implications of learning loss caused by school closures on future lifetime earnings and social mobility prospects may not be known for some decades,” it said.
ADB is committed to achieving a prosperous, inclusive, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members, 49 of them from the region.