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Challenges in Poverty Reduction in Asia

*Image Source: Pixabay

Poverty is an issue that has existed even before recorded history. There was a significant decrease in extreme poverty in the last three decades. Fifty percent of the population in poor countries lived on less than $1.25 a day in 1981. This was reduced to 21% in 2010. In comparison with the 1.9 billion people who lived on less than $1.25 a day in 1981, there was a significant decrease to 1.2 billion living on that amount in 2010. Despite the huge decrease in the number of people living in poverty, there still exists the challenge of reducing poverty.

The most significant issues that affect the poor involve globalization, environmental degradation, and applications of modern science in agriculture. Globalization in context to Asia is China’s accession to the World Trade Organization (WTO) and the rise of India as an economic powerhouse. This post will examine the challenges that related to advancing rural poverty reduction in Asia.


It is common to assume that the rural poor consists mostly of subsistence farmers. However, if this is the case, then these people are exempted from the dangers that relate to globalization. Some of these include price volatility, structural transformation, and contagion of crisis effects. This also means that they do not share in the benefits of globalization. Moreover, there is a worsening of income inequality between those who participate in economic transactions and those who are isolated from the market.

China and India’s Economic Boom

India and China comprise more than 40% of the world’s population and produce 6% of the world’s output. This implies that their economic performance can be affected by greater integration. This will also have good and bad effects to the rest of Asia and the world.

Singapore, Brunei, Malaysia, and Thailand will experience positive effects from the boom of these two economic giants. However, this boom will affect the less-advanced transition countries, including Philippines and Indonesia, in terms of unskilled labor. These two giants have more abundant and cheap unskilled labor compared to the rest of the Asian producer of laborers.

It is significant to note that it takes more than abundant and cheap unskilled laborers to gain an economic advantage compared with other nations. The rules of the game and infrastructure are also great determinants of investment and competitiveness. Less developed countries can seize the opportunities brought about by the economic boom in the two giants.

Rural Development as a Government Priority

The rural poor needs to be empowered. Empowerment is the capacity of a person to be of use to society. This means matching the potential and willingness to maximize these capabilities, but also the chance and the means to put these capabilities in action.

Governments must improve the human capital quality in the rural areas. Adult education and skills training must be given importance the same way as on basic education. It is not sufficient to have financial literacy as other skills are required to compete in the current labor markets.


Asia faces the perennial problem of poverty. There are challenges in poverty reduction in Asia. There are also possible solutions to it. It is hoped that governments will do their role in reducing poverty.

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