Globalisation and poverty reduction

1
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

2
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

3
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

4
AFC

• FDI vs portfolio investment vs MAs
• 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

5
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

6
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

7
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

8
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

9
Types of poor

• Inflation,devaluation, purchasing power
• Labour market adjusted with fall in earnings
• Flight to quality of education, health, access
• Causes of povertylack market opportunities
• Assets to tap, take advantage of mkts
• Neither voice nor capability
• Political,social constraints, governance
• Landlessness, land tenure

10
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

11
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

12
Contrarian Asian model

• 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

13
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

14
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

15
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, RD
• Mkt incentives to reorient FDI, TNCs, HRD

16
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