Every good ex-pat reads the local national newspaper to understand both what is going on in the country and what is important. In yesterday’s Philippine Inquirer, Jong-Wha Lee, the chief economist for the Asian Development Bank, penned an op-ed discussing an alternative way of looking at the problem of poverty in Asia. In the opening paragraphs, he explains the issues:
THE MANTRA across developing Asia since the 1960s has been poverty reduction. Huge strides were made during the Asian “miracle.” Yet two-thirds of the world’s poor remain in Asia. More needs to be done, but how?
Perhaps we need to flip the coin. Instead of just “pushing” people out of poverty, we should also aim at bolstering the rapid expansion of the middle class as a magnet to “pull” people out of poverty, providing an anchor for sustained and more inclusive economic growth.
This is good global economics as well. As households in advanced economies get a handle on excessive debt and start to save, developing Asia’s rising middle class holds the key to rebalancing the region’s economies more toward consumption. Asia’s emerging consumers are likely to assume the traditional role that the US and European middle classes played as global consumers.
The rationale behind this theory, as I understand it, is that a rising tide lifts all ships. Continue reading