Saturday, April 24, 2010

When 'invincible' Japan falls prey to poverty, too

WE look up to Japan for many reasons -- among others its technological capabilities and work culture. More importantly, we admire how Japan became the first advanced Asian country. Its economy was roaring long before other Asian tigers showed their claws. Japan is uniformly middle class, meaning the disparity of income among its people is never an issue. For far too long, we believed nothing could go wrong with Japan.

The myth of Japanese invincibility has been punctured. We need to look again at the Japan of late. We are fully aware that Japanese pride is very much affected. Some of the most revered companies are crumbling as a result of bad management, bad times or both. One of its car companies is currently helmed by a foreigner. But the most shocking thing is that the number of poor people is increasing dramatically. Last October, its Labour Ministry said in 2007, almost one in six Japanese or a staggering 20 million lived in poverty.

Wait a minute, are we talking about Japan, the pride of Asia and flag-bearer of all things successful this side of the world? Sadly, yes. The Japanese poverty rate (15.7 per cent) is close to that of the United States, which stands at 17.1 per cent. Japan is using an internationally recognised formula to measure its poor, not unlike the one used by US.

The best measure of inequality of income or wealth distribution is the Gini coefficient. Simply put, the marker is between 0 and 1, with 0 meaning perfect equality and 1 signifying perfect inequality. Japan had always prided itself in having a Gini coefficient of between 0.2 and 0.3. It is now almost 0.4, indicating inequality is more pronounced. Many blame the nation's real estate and stock markets, and almost a decade of stagnation in the economy. People are losing jobs. Impoverished Japanese are feeling the pain. After all, the cost of living in Japan is one of the highest in the world.

True, Japan has undergone some very difficult times. And, true, many advanced countries in the West are facing largely the same problems. The US is the world's richest nation, but poverty among its people is rampant. The income gap between the top fifth and bottom fifth is widening everywhere. It is also true that 80 per cent of the world's population today live in countries where income differentials are widening. But Japan is supposed to be different. The Japanese have always scorned the US's inability to manage inequality among its people. After all, Japan's standard of living is the stuff of legend.

We are all familiar with the facts and figures about poverty in today's world. It knows no boundaries. At least 80 per cent of humanity lives on less than RM33 (US$10) a day. More than 75 per cent of Africans live on less than a dollar a day. Every day, 800 million humans go hungry. The poorest 40 per cent of humanity accounts for five per cent of global income, whereas the richest 20 per cent controls three quarters of income. The number of billionaires and millionaires are increasing the world over, yet the number of those labelled poor is exploding.
There are just too many implications of poverty. It is estimated that of the 2.2 billion children in the world today, a billion live in poverty. Imagine what poverty has done to the 1.9 billion children in developing countries.

As many as 640 million are without adequate shelter (one in three), 400 million with no access to clean water (one in five) and 270 million with no access to health services (one in seven). At least 72 million children of primary school age in developing country are not going to school, 57 per cent of them girls. In all, a billion humans today are unable to read or sign their names. Movies like Slumdog Millionaire are the trenchant truth, not just fictional in their depiction of poverty.

For most of us, electricity is part of our lives, but 1.6 billion humans live without it. Many of us take for granted how we live in the modern world and how we redefine humanity through advancements in technology. We are talking iPad, smart phones, future TV and state-of-the-art gadgets. Yet, more than a billion people on this planet have never heard a dialling tone. The rich burn cigars costing a hundred ringgit each, a back-breaking four-day job for a menial worker.

Some of us blow a thousand ringgit for a dinner for four at a four-star hotel but a clerk gets that much in a month. A professional footballer in the English Premier League is paid half a million ringgit a week, that is 416 months or more than 34 years' pay for a junior government officer in this country.

Before Tiger Woods confessed to his stunning sexual appetite, he was collecting RM265 million a year or RM503 a second as a professional golfer from sponsors and merchandisers. A Thai garment worker has to work 38 years to earn what Tiger gets from an apparel company in a day. In today's world, some individuals are richer than most countries.

Poverty rears its ugly head more now than before. The disparity between the haves and have-nots is more glaring than before. Of course, there are many success stories in the world. China's poverty rate has fallen to 15.9 per cent from 85 per cent. We, too, have seen dramatic changes in the poverty rate. Our figure stands at 5.4 per cent from more than 70 per cent in the 1950s.

The issue is not about significant improvements here and there, it is about addressing the widening gap between the people of the world. Consider this: an additional RM21 billion is needed to provide basic education for all in the world today. Yet, Americans spend more on cosmetics in a year (RM27 billion) and even more on pornography (RM35 billion). To supply clean water and provide proper sanitation on a global scale? An addition of RM30 billion. Europeans spend RM170 billion on cigarettes and RM357 billion on alcoholic drinks a year.

If Europeans stop taking ice-cream for a year (RM37.4 billion), all the poor in developing countries could enjoy basic health and proper nutrition. By Johan Jaaffar for the New Straits Times, Kuala Lumpur


  1. Isn't the real problem based on two facts:
    1: people will not readily accept a decline in their standards of living and
    2: there are just too many people in the world?
    Even if all "Europeans" (residents of Europe which now includes a very high proportion of Asians and Africans) stopped eating icecream for ever it would make very little difference to the overall problem. Too many people on a finite Earth with finite resources that can be extracted.

  2. If the problem is too many people on this Earth, then the global decline in fertility, led by places like Japan, should be welcome news. This suggests that the "limits to growth" issue is self-correcting. As more and more of the young people refuse to get married and have kids, instead preferring to be slackers and just have a good time, the world condition should improve over time. A self-correcting problem.