[Date Prev][Date Next][Thread Prev][Thread Next][Date Index ][Thread Index ]

Social safety nets needed for Asian



Subject: Social safety nets needed for Asian poor: Nobel laureate 

Social safety nets needed for Asian poor: Nobel
laureate

filed at 10:20 hrs (THLD time) 

SINGAPORE, July 13 -- Asian economies hit by financial crisis must expand
their social safety nets for the large numbers of poor which emerged from the
turmoil, welfare economics Nobel laureate Amartya Sen said. 

Recessions experienced especially in the hardest crisis-hit countries like
Indonesia, South Korea and Thailand, worsened the plight of the poor that
already existed even when these nations enjoyed high growth rates, he said in
remarks published in newspapers Tuesday. 

Sen, who was awarded the Nobel Prize last year for his extensive work in
welfare economics, was speaking at a forum here organized by the Institute of
Southeast Asian Studies and the Japan Center for International Exchange. 

''If that five or 10 per cent decline (in economic growth) is not shared
evenly,
and it is heaped instead largely on the poorest part of the population,
then that
group may have very little income left, no matter what the overall growth
performance may have been in the past. 

''This is why ... social arrangments for safety nets are an integral part of
development itself,'' added Indian-born Sen. 

He said ''the newly dispossessed did not have the hearing they needed, in say,
Indonesia or Korea'' and ''not surprisingly, democracy became a major issue
precisely at a time of crisis.'' 

''Economic incentives, important as they are, are no substitute for political
incentives,'' he said, adding ''the absence of an adequate system of political
incentives cannot be filled by the operation of economic inducement.'' 

The regional financial crisis, which erupted in mid-1997, caused currencies
and
stocks to plunge, massive unemployment and poverty rates to increase and
triggered riots and protests. 

The International Monetary Fund (IMF) led multilateral agencies in providing
billions of dollars in aid to the crisis-hit countries in exchange for major
financial reforms and economic austerity measures. 

The most violent demonstrations occurred in Indonesia, leading to the
replacement of veteran strongman Suharto last year. 

Donors to the crisis-hit countries have since recognized the need to improve
social safety nets in aid programs. 

Official statistics show Indonesia had 49.5 million of its 200 million
population
living in absolute poverty at the end of last year. 

Sen rejected the view that authoritarian governments were better at promoting
economic growth, saying economic success ''is facilitated by a supportive
economic environment rather than by the harshness of the political climate.'' 

''Democractic and contested political systems help accountability and the
prevention of the kind of financial irregularity that played a significant
part in
the recent Asian crisis,'' Sen said. (AFP)