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Opinion

World can rid itself of extreme poverty, but only if it also tackles inequality

Mayling Chan says world can end poverty within a lifetime by dealing with inequality and climate change

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Not only has inequality plagued Hong Kong, it has also become one of the greatest obstacles to poverty alleviation worldwide.
Chief Secretary Carrie Lam Cheng Yuet-ngor recently announced a slight drop in the number of people living below the poverty line, but that figure still stands at over 1.3 million. With one of the widest wealth gaps in the world, this should come as no surprise. Not only has inequality plagued Hong Kong, forcing the most vulnerable to live on the margins of society, it has also become one of the greatest obstacles to poverty alleviation worldwide.

Over the years, we have seen the wealth gap widen locally. According to Credit Suisse, the wealthiest 1 per cent in Hong Kong owns 52.6 per cent of the city's wealth, while the richest 10 per cent owns 77.5 per cent of wealth - the highest proportion among developed regions globally. Furthermore, the median monthly household income of the top 10 per cent in 2014 was HK$95,000, while that of the lowest 10 per cent was HK$5,000. In other words, the lowest 10 per cent would need to work a year and seven months to make what those in the top 10 per cent earn in a month.

Eradicating extreme poverty and stopping climate change is possible within our lifetime, but real action must follow
The number of people who work but are barely paid enough to get by is in no way insignificant. Having steadily risen over the years, the number of people living in working poor households reached a staggering 647,500 last year. To address this, the government should review the minimum wage annually and scrap the Mandatory Provident Fund's offsetting mechanism to better protect workers' retirement funds.

Globally, we have seen some encouraging progress in poverty alleviation over the past 15 years. The Millennium Development Goal target of reducing extreme poverty rates by half was met five years ahead of the 2015 deadline. China and India, the two most populous countries, succeeded in halving the number of people living in extreme poverty (which was previously defined as those who live on less than US$1.25 a day, and now increased to US$1.90). Laos and Cambodia have also seen their numbers drop substantially over the past decade.

These accomplishments are surely remarkable, but, as in Hong Kong, stark inequalities remain.

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A woman and her son are seen in their 60-sq-ft subdivided flat in Hong Kong. Inequalities remain stark in the city. Photo: Reuters
A woman and her son are seen in their 60-sq-ft subdivided flat in Hong Kong. Inequalities remain stark in the city. Photo: Reuters
The Sustainable Development Goals - a set of ambitious plans to eradicate hunger and poverty by 2030 - were recently announced to succeed the Millennium Development Goals. Agreeing that inequality is an important obstacle to eradicating poverty, one of the new goals aims to reduce inequality within and among countries, and address a wider range of socio-economic differences. Under this goal, countries like Laos and Cambodia should make even greater progress if pro-poor policies are in place, such as microfinance for the poor, reachable markets for smallholder farmers, and equal access to economic resources for both men and women.
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Above all, we should embrace inclusive development. It is the best way to lift the poorest people out of extreme poverty in the next 15 years, whereupon the Sustainable Development Goals are expected to be fulfilled.

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