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Illustration: Craig Stephens
Opinion
Tom Plate
Tom Plate

Can Asia lead the global fight to cure the poverty pandemic as the US lags behind?

  • Some leaders in the region are showing signs of a new, collective economic conscience that challenges the Wall Street orthodoxy
  • While Fumio Kishida and Xi Jinping head efforts towards a more equal society, Joe Biden’s attempts to do likewise are crumbling in Congress
Perpetual inequality will only increase if we always look the other way. This is especially so if, as some predictions suggest, the global population hits 10 billion in 2050, with more than 5 billion in Asia alone.

Just as the 2008 financial meltdown oozed over the world with volcanic heat and the 1997 Asian financial crisis unhinged otherwise stable economies, so the grinding dynamic of widening inequality threatens our humanity, sense of justice and psychic equilibrium.

As the French economist Thomas Piketty wrote, “The most obvious characteristic of today’s global inequality regime is that societies around the world are more intensely interdependent than ever before.” It’s a disease – in fact, a poverty pandemic.

The culprit is not Asia. Some leaders in the region are surfacing with a sense of collective economic conscience that challenges Wall Street, which is hardly the gold standard in the category of caring about global economic inequality.

Consider Japan, where new Prime Minister Fumio Kishida began his party’s re-election campaign with an implicit rebuff to one of his predecessors. “Abenomics” was a somewhat successful but narrowly targeted policy of hyping the stock market by babying corporations while avoiding narrowing the rich-poor divide.

04:30

Who is Japan’s next Prime Minister, Fumio Kishida?

Who is Japan’s next Prime Minister, Fumio Kishida?
Shinzo Abe, who preceded Yoshihide Suga and Kishida, was a believer in trickle-down economics. His faith in leftovers allegedly cascading off the high table of the wealthy into the mouths of the hungry was almost in the fashion of former US president Ronald Reagan.
There is something to be said for that approach, but not much. People notice when so many crumbs get siphoned off and squirrelled away in shadowy foreign banks or somehow squeeze through tax loopholes the size of a Lamborghini.

To be sure, Japan having a new prime minister is not especially novel. The country has changed leaders 11 times since April 2000.

Whether motivated by mere populism, new-found election campaign nerves or just conscience, Kishida’s recent comments merit a serious look. Measurements of Japan’s wealth gap show the country to be one of Asia’s lesser ethically malformed economies.

03:17

Japan beef bowls and coffee costing more as workers feel the pinch from food price hike

Japan beef bowls and coffee costing more as workers feel the pinch from food price hike
Japan’s Gini coefficient – one widely used index of income inequality – puts it in the lower half of the global ranking, which is a better place to be than the upper half. The fact is that Japan is doing better on this measure than China, the United States, Singapore or Hong Kong.

Nonetheless, at a news conference last week, Kishida admitted the government’s need to direct more wealth to households rather than corporations. He said: “In order to achieve strong economic growth, it’s not enough to rely just on market competition. That won’t deliver the fruits of growth to the broader population.”

While still managing to annoy Beijing, especially with his recent offering to the Yasukuni Shrine, Kishida is known to favour intelligent diplomacy as the strategy for dealing with China rather than an endless military build-up.

For his part, President Xi Jinping has surely noticed the new guy in Tokyo and, considering his own views on the wealth gap, might well closely watch Japan’s national election results at the end of the month. China’s leader seems as complex as the country he rules and, in terms of social conscience, he deserves to be heard.

04:14

Xi Jinping leads celebrations marking centenary of China’s ruling Communist Party

Xi Jinping leads celebrations marking centenary of China’s ruling Communist Party
In a recent article in the Communist Party journal Qiushi, Xi asserts that China’s government must do more to bring income levels closer together. “Only by promoting common prosperity, increasing the income of urban and rural residents and improving human capital can we increase overall productivity and consolidate the foundations for high-quality development,” he said.
That is easier said than done, but it is not inconsistent with the tenets of Xi’s thinking. “Houses are for living in, not for speculation,” he said in 2017.

Xi also raised another salient political point in that Qiushi article, saying, “China must prevent polarisation, promote common prosperity and achieve social harmony and stability.” Yes, the issue Xi is facing is a destabilising monster, a mushrooming global leviathan.

Across the Pacific sits US President Joe Biden. His massive economic recovery legislation is being hacked away at in Congress and could fail completely if all the self-interested parties and lobbyists have their way.
People wait in line for hours at a downtown Brooklyn office for their food stamp cards on May 12, 2020 in New York City. As inequality rises, America’s rich need to pay more to ease the suffering of those less fortunate. Photo: AFP

That is unfortunate as its central conception – that America’s rich need to pay more so its less fortunate can ease their suffering – is the right way for the country to go at a time of rising inequality. In 2018, the top 1 per cent of US earners averaged almost 40 times more income than the bottom 90 per cent.

The best American ethos is that everyone must have a chance. “People often feed the hungry so that nothing may disturb the enjoyment of a good meal,” the late English novelist and playwright W. Somerset Maugham quipped in his diary. The trick is to solve the problem of wealth disparity without levelling the playing field so much that no one has any money to speak of and not much to eat.

It is possible that Beijing’s centralised political system, for all its central-command authoritarianism, might be no more adept than Washington’s decentralised circus. But the American people might get other ideas if the US does not start doing the right thing while Xi’s China shows progress.

One can almost imagine that, very far east of Eden, insufferable moral infants will find themselves stuck in the mud of indifference and never manage to entertain a progressive thought towards reducing socioeconomic inequality.

LMU Professor Tom Plate is also vice-president of the Pacific Century Institute in Los Angeles

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