What can Asean do to address rising poverty levels and social unrest


The topic 'What can Asean do to address rising poverty levels and social unrest' is especially pertinent if the current global economic crisis is prolonged or worsens further. Even if the crisis abates during the next year, various forecasts point to a slower rate of growth in the Asean national economies.

Continuing ripple effects on various economic sectors, socio-economic groups and local areas already badly hit as a result of the worsening economic conditions during the past 18 months can be expected for some time to come.

To ensure that economic distress does not translate into sharply rising poverty levels and social unrest, policy makers in the region will need to be more proactive than they have been to date – both at the regional and national levels.

Unfortunately, at the regional level, the outcome of the most recent meeting of the Heads of State/Government of the Asean Member States in Cha-am Hua Hin on 1 March 2009 to discuss the global economic and financial crisis has provided little evidence or assurance that the governments at the regional level are focused on addressing the poverty and social impacts of the crisis. The press communiqué arising out of the meeting mainly affirmed “the necessity of proactive and decisive policy actions to restore market confidence and [to] ensure continued financial stability to promote sustainable regional economic growth”.

Emphasis was placed on “expansionary macroeconomic policies, including fiscal stimulus, monetary easing, access to credit including trade financing, and measures to support private sector, particularly small and medium enterprises (SMEs) undertaken by each Asean member state to stimulate domestic demand”.

Although the importance of “coordinating policies and taking joint actions that would be mutually reinforcing at the regional level” was mentioned, this was more focused on the regional grouping’s “determination to ensure the free flow of goods, services and investment, and facilitate movement of business persons, professionals, talents and labour, and freer flow of capital” rather than on alleviating the regional poverty and social impacts arising from the crisis.

In all, the meeting appears to have taken a hands-off approach in terms of a regional approach to the challenge of worsening poverty in the region arising from the global crisis, preferring – or at least it seems to the public – to opt for the national governments to deal with the impact in their own ways. Both at the national and regional levels, it is also noticeable that the immediate response packages to the crisis have been more directed towards stimulating growth and shoring up the banking, finance and manufacturing sectors with considerably less attention given to strengthening the social safety net and the introduction of special social protection programmes. In the last few months, governments in the region have stitched together a hodge-podge of modest social protection programmes in their fiscal stimulus response to the crisis but there is still little evidence of substantive efforts at formulating and implementing policies that systematically address the problem of rising poverty.