Wednesday, October 31, 2012

The Asian century rests on the backs of millions of poor workers, and this reality needs to inform Australia's engagement.

Buried in the government's Australia in the Asian Century white paper is a different story to that presented in the headlines.

Yes, it's true that there has been phenomenal growth in recent times which has led to hundreds of millions of people finding a pathway out of poverty. Living standards have been immeasurably improved; people are living longer and their children are more likely to survive infancy.

These undoubted gains should be celebrated – not just because they lead to new markets for Australian goods and services but also because it means people are living better lives.
And yes, the burgeoning Asian middle class with their bulging wallets are potentially rich pickings for an Australian industry equipped to respond.

The white paper's underlying assumption is that this massive growth will continue. Aside from a few short paragraphs, the white paper gives little consideration to whether the growth rates are sustainable, environmentally or socially. Because there is little discussion of these possible downsides, only a partial picture is presented.

For while the middle class is growing, the sad reality is that Asia remains home to the majority of the world's poor. And many of the countries with a growing middle class are those with the greatest persistence of mass absolute poverty.

A key trend that undermines the rosy picture of never-ending economic growth is the massive growth in income inequality. It is the underbelly of Asia's prosperity.

India is but one example of this trend. Inequality in earnings has doubled in this country over the past two decades. The top 10 per cent of wage earners now make 12 times more than the bottom 10 per cent.

India's per capita income has tripled from about 19,000 rupees in 2002-03 to 53,000 rupees in 2010-11, with an average growth of around 14 per cent over the same period. But the absolute number of people living in poverty has remained about the same. Much of the impressive growth has been in urban areas and in the services sector, and has done little for reducing poverty in rural areas dependent upon agriculture production.

There are still more than 400 million Indians living in abject poverty.

Like India, other countries are experiencing galloping growth but persistent and increasing inequality – China and Indonesia, for example.

The white paper does discuss the implications of growing inequality, devoting some seven paragraphs in its more than 300 pages to this issue. Its brief discussion concludes: “Unless these growing disparities in incomes and living conditions, both within and between countries, are addressed, social stability could be threatened and could have an adverse impact on long-term economic growth."

But this caution seems to have not informed any of the white paper's recommendations or indeed, the underlying analysis.

Almost as an afterthought, the paper recommends that Australia should continue to be a “reliable and high-quality development partner”.

But the implications for the aid program of growing inequality are not seriously explored.
Nor is there a serious consideration of whether these growth rates are environmentally sustainable. The report does note, “Even under a conservative scenario of sea-level rise, by the end of the century the number of people affected by flooding in low-lying parts of the region, such as parts of Bangladesh, China, India and Vietnam, could increase from 13 million to 94 million”.

Yet this analysis is not reflected in the white paper, with only a scant mention of Australia's modest efforts to reduce emissions, and a recommitment to raise some of the finance that will be needed to help Asian countries adapt to climate change.

The enduring message of the white paper is: how can Australia benefit from the Asian Century?

The mind-boggling growth in Asia does present many opportunities for Australia, and the government understandably wants to exploit those opportunities.

However, the pervasive "what's in it for us?" perspective throughout the white paper sits uncomfortably with Australia's recent efforts to paint itself as a good global citizen, eager to work with the international community to tackle the world's most critical issues.

The Asian century rests on the backs of millions of poor workers across the region, and this reality needs to inform our engagement.

Australia needs a mature, big-picture approach to engaging with Asia. An approach that not only looks at the benefits for Australia, but also how we can work with our Asian neighbours to tackle challenges.

Ultimately, we will all benefit from an approach that sees Asian countries not simply as customers or suppliers, but as partners in a shared effort to make our region peaceful, prosperous and fair.
Andrew Hewett is Oxfam Australia's executive director.

1 comment:

  1. Fair Comment I feel.
    The enduring message of the white paper is: how can Australia benefit from the Asian Century? Rob Carter Suggests: not by joining or copying their model before they show 100 years proof, that they have a better way than ANZ with a British Commonwealth 242 year model still showing the leading today, even our aboriginals are never that poor when sober. Some 53 British Commonwealth nations look better than Asian, EU, or American alternatives of like duration up to several hundred years.