For Asia to tackle income inequality, economic growth is not enough

THERE is far less talk now than in the past about the Asian "economic miracle". Not only have growth rates in the region moderated as the economic base has expanded but also it is becoming increasingly clear that growth has come at the cost of rising income inequality across the region.

The severity of this inequality is clear from a recent International Monetary Fund (IMF) working paper which makes surprising and disturbing reading. Though it does not say so in so many words, the paper implies that future growth and possibly social stability could suffer if policymakers don't address the problem. These findings are the more disturbing for the fact that, historically, Asia has experienced lower inequality than other developing regions, yet in more recent times "has seen widespread increases in income inequality at the national level, as well as in both urban and rural areas".

To be sure, overall "poverty has fallen in recent decades in Asia", the IMF paper notes. This is part of a global trend but the East Asia and Pacific region has experienced the most dramatic reduction of poverty in terms of the percentage of the population living below poverty lines. China, in particular, accounted for most of Asia's decline in extreme poverty.