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 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

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