Urban Poverty in Asia

Om Prakash Mathur
2014

Summary

This paper looks at the income and non-income dimensions of poverty in the two main regions of Asia, including a brief account of who and what class of people are affected most by poverty and deprivation. It analyses the effect of recent urbanisation and gross domestic product (GDP) growth trends—which distinguish Asia from other regions—on poverty. It does this using two sets of data: (i) the level of urbanisation, 2011 drawn from the World Urbanisation Prospects, and (ii) the national-level urban poverty estimates for 14 Asian countries. The paper also explores other factors that may affect poverty levels in Asia, delves into the key features of urban poverty in selected Asian countries, and looks at public policy responses and initiatives that Asian countries have taken to address issues on access of the urban poor to services, livelihood, shelter, and social security systems.

The paper concludes that Asia is in the midst of urban poverty and deprivation challenges that are evolving with the processes of growth and urbanisation. It draws upon a case study on the People’s Republic of China (PRC) as evidence. The welfare of the millions of urban poor will depend on how Asia and the world prepare for the inevitable growth of urbanisation, and how this phenomenon of urbanisation is managed and taken forward.

Key findings:

  • As Asian economies become more urbanised, they may face an “urbanisation of poverty,” rather than a reduction in poverty if urban vulnerabilities, inequalities and deprivation are not formally addressed.
  • Middle-income countries are associated with high levels of urban poverty and low-income countries with low levels of urban poverty.
  • Economic growth is important for urban poverty reduction. According to the 14 Asian countries’ data, a 1% increase in per capita GDP has produced 0.25% reduction in urban poverty. While the urbanisation–GDP nexus is positive, it is vastly untapped to yield its full potential.
  • India and the PRC hold the key to urban poverty reduction in Asia and globally. They account for a greater part of Asia’s urban poverty, with India accounting for about one-third of the world’s urban poor, 13% of informal settlements’ population, and over 40% of the working poor. The PRC accounts for 22% of the world’s informal dwellers, consisting of a class of new urban poor. This is an important aspect of emerging poverty in urban Asia, where poverty is a function not only of the domestic factors and policies, but also of external factors. Any progress in global poverty and poverty in Asia is crucially dependent on how India manages its growth and urbanisation policies, and how the PRC manages to integrate its informal dwellers with the cities’ population and addresses growing inequalities.
  • The speed with which Asian economies implement social security systems to safeguard the poor from external shocks will also be important in determining the progress of Asian and global poverty.

Source

Mathur, O. (2014). Urban Poverty in Asia. Asian Development Bank.