The Asian Development Bank has developed a new
benchmark to measure poverty in Asia. The ADB says in a region that has seen
stellar growth rates and rising income inequality, its new Asian poverty line
can help policy makers measure and compare poverty levels. Claudia Blume reports
from Hong Kong.
Living on one dollar or less a day - that is how
poverty is commonly measured around the world. But the Asian Development Bank
thinks that in Asia a new benchmark is needed that reflects the region's rapid
economic growth and growing income disparities.
In Hong Kong on
Wednesday, the non-profit lender introduced its new Asian Poverty Line, which
defines poverty as living on $1.35 a day. The ADB arrived at that figure by
taking the median of the national poverty lines of 16 developing countries in
Asia in 2005.
The U.S. dollar-denominated poverty line is not based on
market exchange rates, but on purchasing power parity figures, which use baskets
of goods to compare purchasing power across countries. The ADB says it developed
a new set of measurements for their study that only compare the prices of goods
and services purchased by the poor.
ADB chief economist Ifzal Ali says
the bank collected data on where the poor shop, what they buy and on the
quantity and quality of their purchases.
"Both you and a poor person
might consume rice every day but you would consume a much higher quality of rice
than a poor person who would eat coarse rice," he said.
The ADB says
different measurements effect estimates of the scope of poverty in Asia. If the
traditional method is used, which measures the average purchasing power of all
people in a country - including the rich - there are more than one billion poor
people in the region. By using the new measurement which only focuses on the
poor, the figure drops to 800 million.
Ifzal Ali says it is the first
time that a cross-country comparison of poverty lines has been done in Asia. He
says by looking at the report, policy makers can determine where they stand
compared with other countries in the region.
Ali says the Asian Poverty
Line and the new, poor-focused purchasing power measurement can also help
predict how inflation will affect the poor in the region. He says the ADB
analyzed the likely effect of a 10 percent increase in grains, and a 10 percent
increase of general food prices on poverty figures.
"The report shows
that if you have a 10 percent increase in - say - cereal prices, the number of
poor would go up by 36 million almost immediately. If on the other hand food
prices went up - this is going from cereals to food - it would increase by about
85 million people," he said.
The ADB urges countries in the region to
achieve inclusive growth to eradicate poverty by 2020. This includes expanding
employment opportunities, enhancing education and health and providing social