Southeast Asia rich-poor gap ‘widening’

Southeast Asia rich-poor gap ‘widening’
25 August 2010

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A disabled Cambodian beggar watches his child
(Reuters)

Southeast Asian leaders warned Wednesday of a widening gap between the booming region’s richest and poorest nations that could threaten its ambitious drive for an EU-style single market.

Cambodia, Laos, Burma and Vietnam have recorded high growth rates but their per capita gross domestic product remains the lowest among the 10 members of the Association of Southeast Asian Nations (ASEAN).

“The danger of widening development gap remains a major obstacle to ASEAN’s future development, especially given the context of expanded ASEAN economic integration,” Vietnam’s Prime Minister Nguyen Tan Dung said in opening remarks to an annual meeting of the bloc’s trade and commerce ministers.

Emulating the European Union’s example, ASEAN wants to establish by 2015 a single market and manufacturing base of about 600 million people – a goal that has been spurred by intensifying competition from China and India.

The discrepancy between ASEAN’s rich and poor members “is quite wide” and could undermine efforts to create the single market, ASEAN secretary general Surin Pitsuwan told reporters. “A house divided by such a gap is not stable.”

According to ASEAN statistics, GDP per capita in the bloc ranges from US$419 in Burma to more than US$36,000 in Singapore.

Surin said the gulf within ASEAN had widened because some countries were better able to attract investment as the global economy recovered from the crisis which struck in 2008.

“It has come up quite often at the highest level, of how to help bridge this gap,” he said.

The Vietnamese prime minister, who chaired the meeting, urged ministers to “work out concrete and robust measures” to create a more equitable ASEAN.

But the bloc has been more focussed on initiatives such as forging individual free trade deals and does not have the budgets or structures in place to address the issue, said Leon Perera, group managing director of Spire Research and Consulting in Singapore.

“I think they haven’t really set that goal in a serious way,” he told AFP by telephone.

Perera said that “other things being equal, you tend to get more inequality” as a consequence of globalisation, and a development gap may be more significant within countries than between them.

China, Japan, Australia, the European Union and the United States have all expressed interest in boosting development in the region’s poorer nations, Surin said.

Another strategy, he said, is an infrastructure fund that the region’s finance ministers have agreed in principle to establish.

In Vietnam alone, the European Chamber of Commerce has cited estimates that the country needs around US$70 to US$80 billion of infrastructure investment over the next five to 10 years.

Foreign businessmen in the country have frequently expressed concern about the lack of seaports, roads, electricity and other essential infrastructure.

Surin also said that Southeast Asian nations need closer cooperation to deal with incidents such as this week’s Philippines bus hijacking that left eight Hong Kong tourists dead.

“I think there is room for more cooperation and more exchange of best practices, training for example,” he said, when asked whether he was concerned about Monday’s incident in Manila.

Surin made no reference to how police handled the case, but he said generally that management of terrorism or “non-traditional security threats… is something that I think we probably need to consult more closely with each other”.

dvb.no

Simple truth is that an impoverished labour mass makes a developing nations entrepreneurs wealthy when competing against developed countries where the labour force has a more equitable share of the countries wealth.

Sad to say that most developing nations do not have functioning democracies that allow the peasant labour class to share in the countries wealth. So the profits go to just a few in the ruling class.

Bad economic news for unskilled factory labour in western countries and a recipe for future social unrest in developing countries like Thailand.

Even in America they pay unskilled factory labourers more than a couple of $s a day. Granted, --- not a lot more, but enough to offset the low wages and enable them to buy cheap imports from WalMart in exchange for their jobs.