Asia’s past successes in reducing poverty are under threat. More than 80 per cent of Asians live in countries where inequality is widening. The same forces that drove the region’s rapid growth for the past 30 years – globalisation, new technology and market reform – are widening the gap between rich and poor.
As the region’s middle class expands, more than 1.6bn Asians continue to live on less than $2 a day. These people lead highly vulnerable lives. It is time for Asian governments to raise the bar on growth; to commit to a future in which all their citizens have access to the basic tools needed to participate in a modern economy and to benefit from the region’s huge growth potential.
Fiscal policy can play an important role in making this happen. Three actions will help governments lead their countries toward the path of growth and broadly shared benefits.