How big should the income gap be in Asia?

Curtis Chin says social inequalities can tear apart even the most stable communities, and it's up to each to decide just what is acceptable

PUBLISHED : Saturday, 08 June, 2013, 12:00am
UPDATED : Saturday, 08 June, 2013, 2:11am

Recent riots in Sweden - by some measures the most "equal" nation on earth - raise some interesting questions about the state of equality in Asia, including in Hong Kong.

For several days, the Scandinavian nation was rocked by protests attributed mostly to young immigrants, some of whom set buildings and cars ablaze, perhaps testimony to the reality that inequality exists everywhere.

The news also had me revisiting the latest rankings of inequality in Asia, as measured by the so-called Gini coefficient.

Whether in Beijing or Jakarta, further discussion and actions may well be needed to address what some perceive as a persistent, if not growing, divide between the haves and have-nots, between the connected and disconnected, and the educated and uneducated across the region.

The inconvenient truth is that two-thirds of the world's poor live in Asia, and an estimated 1.7 billion people still struggle on less than US$2 a day, according to the Asian Development Bank.

Too often, ethnic minorities and indigenous peoples are among those who remain marginalised and excluded from the benefits of growth. Indeed, by some measures, more than 40 per cent of the Asia-Pacific region's population still do not have access to improved sanitation facilities, and Asia's cities are often marked by deteriorating sanitation and environmental conditions, and inadequate housing and infrastructure.

At the end of the day, access to education and a strengthened business environment - including sustained steps to improve the bureaucracy, to fairly enforce regulations, to limit intervention by government and to fight corruption and cronyism - will be critical to poverty reduction.

According to the CIA World Factbook, while Namibia, South Africa and Lesotho in sub-Saharan Africa top the charts as the most unequal in the world, the latest reported data has Hong Kong and Thailand as the most unequal places in Asia, ranked No 11 and No 12 in the world respectively. Sweden is described as having the most equal distribution of average family income.

According to a report by the Asian Development Bank, inequality has widened in 12 of the 28 economies with comparable data, including China, India and Indonesia.

So, does the "official" Gini index really matter as much as trends and attitudes when considering whether or not things are getting better? Critically, Hong Kong's leaders must focus on the drivers of inequality of opportunity. These may well include unequal access to public services, such as education, electricity, water and sanitation.

With the twin genies of technological progress and globalisation - key drivers of growth and inequality - long out of the bottle, there is no putting them back in. In answering that question as to whether inequality matters, all of us in Asia will be better able to define who we are.

In doing so, we may well find no agreement on the right balance of wealth and poverty. That conversation, though, is well worth having.

Curtis S. Chin served as US ambassador to the Asian Development Bank, 2007-2010. He is senior fellow and executive-in-residence at the Asian Institute of Technology