Globalisation and poverty reduction • Can the rural poor benefit from globalisation?: An Asian perspective • Globalisation challenge and policy options • Traditional rural agricultural poor vs new poor • Policy options and implications
Globalisation propelled by ICT, KBE • magnitude, scale, complexity crossborder transactions and interdependence • institution, process not globalisation ready • applied to urban industrial, not rural agricultural sectors • creative destruction of industries and jobs accentuated income, employment insecurity • spillover to agriculture, digital divide
Globalisation ready • Northeast Asia vs Southeast Asia • Open, statist,export-led developmental state • Captured liberalisation, sins of commission, omission, poor design, implementation • Self-serving rent-seeking, vulnerability • Two levels of globalisation adjustment • economic competitiveness • socio-political opening and competition
AFC • FDI vs portfolio investment vs M&As • Local entrepreneurship, ownership • Weak recovery, reneging on corporate, financial reform • China, ASEAN4, South Asia did better • Lower population growth, ageing • Challenges for healthcare, social security and protection
Growth and poverty reduction • Open macroeconomic policies, mkt-friendly • Improve private sector, NGOs • State cannot do it alone • Free, open mkts vs corrupt gp of oligarchs • Misguided efforts to restrict trade, investment, income redistribution • Socio-political stability + democratisation • Rural poverty declines, urban poverty rises
Rural agricultural opportunities • Commodity production, prices as buffer • Reabsorb unemployed and retrenched • Lost overseas remittances • Remiss not to extend, apply globalisation across rural agricultural sector • More balanced dualistic structure • Supply side: fuel, food, raw materials, labour, finance, saving, tax • Demand side: market, improvement,stimulate
Types of poor • Structural changes vs cyclical, idiosyncratic • Distinguish: welfare and development, crisis response and development • Welfare for permanent destitute, people without assets, productive resources • recurrent cost to society • Development programmes for entrepreneurial poor • social and economic Investment
Types of poor • Temporary poor: welfare & investment • Unexpectedly fall into poverty • Emergency welfare component vs continuing commitment to investment • Long term sustainable development for entrepreneurial vs short term welfare relief • Formal government programmes vs existing institutionalised nonformal governance systems
Types of poor • Inflation,devaluation, purchasing power • Labour market adjusted with fall in earnings • Flight to quality of education, health, access • Causes of poverty:lack market opportunities • Assets to tap, take advantage of mkts • Neither voice nor capability • Political,social constraints, governance • Landlessness, land tenure
New poor • New poor: poor as result of major event • Economic crisis • Change in economic system • Political changes • Terrorist attacks • Natural disasters • Preventive, mitigation and coping strategies • Emphasise social safety nets, other short term programmes and delivery
New poor • Old core poor in terms of absolute poverty • New poor with structural, globalisation , cyclical downturn and idiosyncratic events • new rich made poor, urban middle income class plunge • emergent fresh graduates graduating into nothing • migrant homecoming poor retrenched due to globalisation, cyclical idiosyncratic downturns
Contrarian Asianmodel • Communitarian, family soc networks • Rapid growth for poverty reduction • Pte social safety net provision by employers, community and families • State as provider-of-last resort, residualist, minimalist approach • Organic relationship between state and individual society as natural organism
Economic vs social competitiveness • Govt spending on social services, education, health, safety nets, social security systems • Identify, protect vulnerable groups • Socio-political harmony and cohesiveness, religious and cultural tolerance • Social trust and social capital • Asia used to hubris, wealth not manage expectations, risks in unexpected calamities or punctuated equilibrium
Urban-industry vs rural-agriculture • Social and community bases of social security and safety nets eroded by industry • Rural-urban migration, universal education • Europeans got it right in dualistic sector • Socialisation, social policy, social capital • Social trust, glue threatened by structural, technological and cyclical changes demographic transition and ageing
Conclusion and policy implications • Globalisation, ICT, KBE favourable • Seduced by rapid, high technology growth • Over concentrated on industrial policy • Corresponding neglect of agriculture • Socioeconomic of balanced dualistic model • Rural sector needs ICT, KBE for better production, marketing, distribution, R&D • Mkt incentives to reorient FDI, TNCs, HRD
Conclusion and policy implications • Asian regionalism • China-ASEAN FTA, APT • Agriculture-led • domestic demand • high marginal propensity to consume • low marginal propensity to import • high saving, prudent spending • brand of village politics and democratisation
