ADB Report: Cost-of-Living Crisis Hampers Poverty Alleviation in Asia and Pacific

By IndraStra Global News Team

Cover Image Attribute: Image by Penny from Pixabay
Cover Image Attribute: Image by Penny from Pixabay

A recent report by the Asian Development Bank (ADB) sheds light on the ongoing cost-of-living crisis and its adverse impact on Asia and Pacific poverty. The region, which had been grappling with the repercussions of the COVID-19 pandemic, is witnessing a surge in extreme poverty fueled by soaring inflation.

The report, titled "Key Indicators for Asia and the Pacific 2023," released today, paints a sobering picture. It reveals that an estimated 155.2 million individuals in developing Asia and the Pacific, constituting 3.9% of the region's population, were living in extreme poverty as of the past year. This figure is a stark reminder of the challenges faced, particularly in light of the fact that it represents an increase of 67.8 million individuals compared to a scenario without the pandemic and the rising cost of living crisis. Extreme poverty is defined as subsisting on less than $2.15 per day, adjusted for purchasing power and inflation, based on 2017 prices.

ADB's Chief Economist, Albert Park, remarked, "Asia and the Pacific is steadily recovering from the COVID-19 pandemic, but the increased cost-of-living crisis is undermining progress toward eliminating poverty. By strengthening social safety nets for the poor and fostering investment and innovation that creates opportunities for growth and employment, governments in the region can get back on track."

The cost-of-living crisis has disproportionately affected impoverished communities, rendering them less capable of affording essentials like food and fuel. Soaring prices for basic goods and services leave many impoverished individuals unable to save, access healthcare, or invest in education and other avenues for long-term improvement. This crisis has had a particularly adverse impact on women, who typically earn less than men and are often burdened with unpaid work.

Beyond reduced income, impoverished individuals often pay a premium to access vital goods and services. They are compelled to purchase items in smaller quantities, which can be more expensive than bulk buying. Many find themselves residing in informal settlements where health hazards are prevalent, leading to higher healthcare costs, longer, less convenient commutes, and other indirect economic burdens.

The pandemic had already led to a substantial increase in extreme poverty in 2021, pushing an additional 75 million to 80 million people into this dire predicament. The poverty threshold was defined as living on less than $1.90 a day based on 2011 prices during that period.

While economies across developing Asia and the Pacific are anticipated to continue their progress against poverty, projections indicate that by 2030, approximately 30.3% of the region's population, equivalent to about 1.26 billion individuals, will still be classified as economically vulnerable. This category encompasses those living on $3.65 to $6.85 a day, based on 2017 prices.

To tackle the escalating cost-of-living crisis, governments in Asia and the Pacific have been urged to bolster social protection systems, heighten support for agricultural development, enhance access to financial services, prioritize infrastructure investments, and champion technological innovation and human capital development, as outlined in the report.

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IndraStra Global: ADB Report: Cost-of-Living Crisis Hampers Poverty Alleviation in Asia and Pacific
ADB Report: Cost-of-Living Crisis Hampers Poverty Alleviation in Asia and Pacific
By IndraStra Global News Team
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