DEVELOPMENT-ASIA: Global Downturn Means More Hungry People

By Marwaan Macan-Markar Reprint | | Print |

Marwaan Macan-Markar

BANGKOK, Oct 5 2001 (IPS) - For Asians going hungry or struggling to get food, the news is about to get worse: the region will see a rise in the number of people deprived of daily meals in coming months, due to changes in the global political and economic landscape since the U.S. attacks of Sep. 11.

The numbers of hungry people could be in the millions, says R B Singh, regional representative for Asia and the Pacific at the Food and Agricultural Organisation (FAO) here. “Their access to food will be reduced and poverty will keep the poor away from food,” he says.

Asia is home to two-thirds of the world’s 500 million hungry people, with the bulk of them living in South Asian countries such as India, Pakistan and Bangladesh.

Singh’s gloomy forecast for the region is one of dismal predictions being made by experts here due to the economic downturn following the Sep. 11 terrorist attacks.

“Asia-Pacific countries will be hit hard,” says Kim Hak-Su, executive secretary of the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP). “The economic downturn in the United States will impact many Asian countries, particularly those with manufacturing and export sectors that depend on the U.S. market.”

Kim expects a rise in unemployment as companies close down due to the demand for their products dropping in the U.S. market. “This will impact families, even affecting children’s education,” he said here.

The health consequences are as worrying. “Economic conditions have a bearing on people’s health. If economies deteriorate, it will lead to health problems,” affirms Dr. Bjorn Melgaard, head of the Thailand office of the World Health Organisation (WHO).

He says the region’s health systems will come under pressure, because a rise in the number of poor will make them more vulnerable to diseases, adding that “children and women are particularly vulnerable”.

At the same time, he adds, the hospitals may have difficulty coping due to the lack of drugs and the decrease in the number of medical and nursing staff.

The economic troubles ahead come on the heels of an already lacklustre picture in parts of Asia. Economies from Taiwan down to Malaysia and the Philippines have cut growth rates due to a global slowdown in electronic goods that was already in place before the September bombings, and many have seen export growth rates fall this year.

Countries like Indonesia continue to be hobbled by the effects of the 1997 Asian crisis, so the prospect of harder times ahead in the wake of the economic effects of the Sep. 11 bombings bring little comfort.

The dire economic scenario many experts see since last month’s terror attacks has already come true in an important foreign exchange earner for Thailand — tourism.

Government plans to boost tourism, which last year brought 6.5 billion U.S. dollars to a country that is one of Asia’s strongest tourist performers, have been shattered after the attacks in the United States.

Since Sep. 11, many tourists have cancelled their trips. Already, the Tourism Authority of Thailand has acknowledged that tourist arrivals during the peak period from October to November could drop by as much as 30 percent this year when compared with the same period last year.

Other countries across Asia are equally affected, particularly those who, like Thailand, depend on tourism for foreign exchange. In Nepal, for instance, authorities have told the media of 50 percent of hotel bookings being cancelled.

“Tourism related trade flows are being hit exceptionally hard,” the World Bank said this week in a preliminary assessment of the economic fallout from the terrorist attacks.

“The fallout from the September 11 attacks will affect different groups of developing countries in different ways, reflecting their particular vulnerabilities,” the Bank noted. “For the poorest countries that stall or fall into recession as a result of decline in exports, tourism, commodity prices, or foreign investment, the number of people living below one dollar a day will rise.”

Even in countries that experience slower economic growth, the Bank has little reason to feel optimistic, since “fewer people will be able to climb out of poverty than otherwise would have been the case.”

New concerns arising from the attack, like security, are raising costs and retarding economic activity, it added. “Insurance and security costs and delays at customs clearance are among the main factors pushing up the costs of trade. Major shipping lines, for example, have increased freight rates to India by 10 to 15 percent.”

This is a stark contrast to the Asian Development Bank’s (AsDB) assessment of the region’s economic prospects prior to Sep. 11.

In its report ‘Growth and Change in Asia and the Pacific – Key Indicators 2001′, the AsDB said the Asia-Pacific region had “notched up the highest growth rates in the world, expanding by over six percent per annum, except in 1998, the first year of the Asian crisis”.

The best performers, it noted, had sound macroeconomic policies, export-led strategies and had attracted foreign direct investment. They ranged from China, South Korea, and Indonesia to Singapore, Malaysia, the Philippines and Thailand.

It even predicted that Asia was on course to achieving the International Development Goals’ targets by 2015. They include halving the number of the very poor, increasing universal primary education and reducing infant and maternal mortality rates.

However, the acts of terror in the U.S. have put paid to such optimism. Governments must be prepared to face the serious economic and social problems in the months ahead, says ESCAP’s Kim.

A rise in poverty and an increase in the number of Asia’s poor appear inevitable, he adds. Says Kim: “Governments need to be ready for increasing social tensions.”