Relative Poverty Judged by standard of country Standard referred toRelative term of society Different among countries
National Poverty Line Standards and definitions vary across different countriespoverty line deemed appropriate for National Poverty a country by its authorities Line Based on population-weighted Subgroup estimates from household surveys
Asia’s performance Sustained Economic Growth Poverty and income inequalities existCountry’s performance ASIA A majority of the world’s quite varies poorest people today a majority of the worlds population Asian poverty being Concentrated in South Asia.
Divergence Phase 1 Phase 2 Phase 3The data andstatistics affirm Some of Asia hasthat gap between shown good Asia, holding thethe rich and the progress on largestpoor has poverty in recent populations, stillgrown, rather than years, like China has manydiminished, with and South Korea extreme poorsustained growthin income
Perspective Broader concept than poverty Define entire populationInequalities Does not emphasize on the poor Difference in level of living The rich and The poor
Inequalities• When economy achieve economic growth• Ideally, benefits should distribute to individuals equally• In fact, it accrues to some members other than others
The extent of concept Inequalities refer to the uneven distribution of income across the population or individuals within society The gap between the rich is inevitably consequence of growth and development the high inequality raises a moral question about fairness and social justice
Measurement of Poverty1. Headcount IndexIt’s the proportion of poor people in the population or the headcount ratio (HCR). q HCR nWhere q refers to the number of individual below a given poverty line, and n refers to the total number of individuals in country.For example, Thai’s poverty line 2010 is 1,678 Thai Baht or approximately$54 per month. There are 5.1 million individuals live below the poverty line. And our population is about 66 million people. Thai’s HCR = 7.72%So, headcount here would show us that 7.72% of total population is in poverty.
Measurement of Poverty2. Using the poverty line that called the international poverty line It can use to compare among many countries by some standard. The World Bank uses two lines for what can be called poverty (percentage of household live in $2 per day) and extreme poverty (percentage of household live in $1 per day) Nowadays, there is the national poverty line that stems from concerning about the difference in each country about population, economic condition and so on. So, the national poverty lines vary in each country.
Measurement of Inequality1. Using percentage share of income We divide the population into 5 groups (Quintiles) or 10 groups (deciles), and consider about what percentage share of income that each group receives. Ideally, each group has to get income or benefit equally, but it does not like this due to uneven distribution which leads to inequality.
In fact (data from https://www.cia.gov/library/publications/the- world-factbook/fields/2047.html) Thailand -2009 Income Category Percentage share of income Lowest deciles 1.6% Second deciles N/A Third deciles N/A Fourth deciles N/A Fifth deciles N/A Sixth deciles N/A Seven deciles N/A Eight deciles N/A Ninth deciles N/A Highest deciles 42.6% Highest Quintile is higher than lowest Quintile about 25 times.
China - 2008Income Percentage share ofCategory incomeLowest deciles 3.5%Second deciles N/AThird deciles N/AFourth deciles N/AFifth deciles N/ASixth deciles N/ASeven deciles N/AEight deciles N/ANinth deciles N/AHighest deciles 15%Highest Quintile is higher than lowest quintile about 4.3 times
Singapore - 2008 Income Category Percentage share of income Lowest deciles 4.4% Second deciles N/A Third deciles N/A Fourth deciles N/A Fifth deciles N/A Sixth deciles N/A Seven deciles N/A Eight deciles N/A Ninth deciles N/A Highest deciles 23.2%Highest Quintile is higher than lowest quintile about 5.27 times
Japan – 2008 Income Category Percentage share of income Lowest deciles 1.9% Second deciles N/A Third deciles N/A Fourth deciles N/A Fifth deciles N/A Sixth deciles N/A Seven deciles N/A Eight deciles N/A Ninth deciles N/A Highest deciles 27.5%Highest Quintile is higher than lowest quintile about 14.5 times
Measurement of inequalities2. Lorenz Curve and Gini CoefficientLorenz curve gives information on the distribution of income. It’s a rough index of income inequality.
Lorenz Curve The horizontal axis gives the percentage of households. The vertical axis gives the percentage of nation’s income. The green line or 45-degree line is called line of equal distribution or egalitarian line. Note that no nation has a Lorenz curve such as green line. The degree of inequality typically prevails. From the information in Lorenz Curve, we can get the Gini index, which measure the degree of inequality for any income distribution by calculating the ratio of area between the Lorenz curve and 45-degree line.
Gini Coefficient Area ASo, Gini Index (G) = AreaA AreaB If the Gini coefficient were equal to zero, the Lorenz curve would be the 45-degree line. The closer to zero, the more equal about income distribution.
Gini Coefficient and TaxGini Coefficients are often calculated for pretax and posttax income distribution. If the Gini coefficient is lower for the posttax, it means that taxes have served the function of reducing income inequality.For example, on average in 2000s,Japan’s Gini coefficient pretax is 0.462Japan’s Gini coefficient posttax is 0.329It means that imposition achieve the target of reducing inequalities
SUMMARY China 2010 ranks the worlds 2nd largest economy. It is theworlds fastest-growing major economy with consistent growth rates ofaround 9% over the past 30 years since 1980. At that time, economicreforms initiated after 1978 began to generate significant and steadygrowth in investment, consumption and standards of living. China is also the largest exporter and second largest importerof goods in the world. The countrys per capita GDP was $7,544 in2010. Especially, the provinces in the coastal regions of China tend tobe more industrialized while regions in the hinterland are lessdeveloped.
Two sector : agriculture and industry The two most important sectors of the economy are agriculture and industry. The two sectors differs in many terms including technology, labor productivity, and incomes that have advanced rapidly in industry than in agriculture. Agricultural output follows the effects of weather, while industry is directly influenced by the government. The disparities between the two sectors have combined to form an economic-cultural-social gap between the rural and urban areas.
Coastal and Inland Problems Economic development is more rapid in coastal than in the inland area, and there are large disparities in per capita income between these regions. The three wealthiest regions are in the southeast coast, centred on the Pearl River Delta; along the east coast, centred on the Lower Yangtze River; and near the Bohai Gulf, in the Beijing–Tianjin–Liaoning region. It is the rapid development of these areas that is expected to contribute to the Asian regional economy growth, and Chinese government policy is designed to remove the obstacles to accelerated growth in these wealthier regions.
5 Policies to reduce inequalities: China Western Development for increasing economic situation of the western provinces through capital investment and development of natural resources. Revitalize Northeast China, to renew the industrial bases in Northeast China covered the three provinces of Heilongjiang, Jilin, and Liaoning Rise of Central China Plan to boost the development of its central regions. It covers six provinces: Shanxi, Henan, Anhui, Hubei, Hunan, and Jiangxi. Third Front, focused on the southwestern provinces. Go Global, to encourage its enterprises to invest overseas.
Introduction Policies ConclusionProblem & Background Causes of Problem Solutions & Advices
Problem Cause Impact China’s regional inequality,Rapidly growing China’s especiallyinternal income economic reform between itsinequality in 1978 inland and coastal regions, has risen considerably
Regional Differences Inland regions have less favorable natural conditions for agricultural production.Long distance of inland regions limits Geography plays a the access to seaports and international market. role in producing Geography also affects regional development
Government Policies Fiscal DecentralizationGlobalization Margetization
Fiscal Globalization Marketization Conclusion decentralization - Enhance trading -Weaken the financial -Make an ownership - make a connection to capacities of the central transformation others government - market flexibilityTarget - impair its abilities to - effectively absorbed redistribute resources surplus rural labor into among region for an industrial production equity -Considerable autonomy -It took place only -Lead to many nonCoastal - enjoy Tax treatment coastal area state enterprise - preferential allocation - Especially the new - rapid economicBenefit of resource rich provinces growth -Inland’s FDI is less than -Insufficient revenue -Inland ownership Coastal’s FDI, so it is - heavier fiscal burden transformation has attractive investor to - a worse investment been carried out more invest in coastal more environment slowlyInland than inland area - inland regions have effect - lack of opportunities to been lacking behind in grow due to small developing key market magnitude of investment. institution
Causes of income inequality inPhilippines • Dynastic political culture Institution • Corruption • Landlocked Geography • Frequency of typhoons hitting the province • Lack of adequate education Education opportunity in the country
Causes of poverty in Philippines NonperformingDeclining revenue Poor investment loans in the banking collection climate sector Governance Gradual loss of structure, corruption international and inefficiency in competitiveness economic management
Conditions for development inTaiwan Good governance Reformed the health insurance system Taiwan government expanded the availability of higher education