Preventing a descent into poverty

Despite a phase of double-digit economic growth in several economies across the region, some 900 million people in Asia-Pacific still live in poverty. ‘The current crisis will have a particularly severe impact on women working in the export industries, migrant labourers and young urban dwellers with a simple education, who earn up to two dollars a day,’ predicts Matthias Rompel, Head of the Sustainable Social Protection Section. His opinion was shared by the more than 350 delegates at an Asia-wide conference held in late September in Viet Nam’s capital Hanoi to discuss the impact of the global economic crisis on poverty reduction and sustainable development. GTZ representatives travelled to Hanoi on behalf of BMZ to deliver a number of lectures and presentations at the conference, which had been organised by the Association of Southeast Asian Nations, the Asian Development Bank, and the governments of China and Viet Nam.

‘Through our activities in Viet Nam, Indonesia, the Philippines and other countries we have been able to demonstrate that people in the countries that have made great efforts to develop their social security systems over the last few years are threatened less by crisis-induced poverty,’ reported Rompel. For instance, he continued, Indonesia has developed administrative capacities and adopted legislation to ensure that government aid actually reaches those in need. The same is true for short-term employment programmes, which can only take hold if governments are able to manage them.

‘The crisis has also resulted in a rising number of Asian governments seeking to adopt models of development that also extend to the large number of poor people,’ explained Rompel. The fundamental elements of these models include social security systems such as health, pensions and accident insurance, but also direct social transfer payments and micro-insurance against risks including flood damage or the death of a family’s principal earner. ‘GTZ has extensive experience in this field, and we are likely to see interesting international cooperation opportunities emerge in the coming years, including in the context of the South-South dialogue in Asia,’ concluded Rompel after the conference.

Asian governments believe that the consequences of climate change will have at least as severe an impact on the region as the current global crisis. Over 80 per cent of the victims of drought, flooding and weather-related disasters between 1960 and 2007 live in Asia. Many lost everything they owned. ‘This vicious circle of natural disasters and poverty can only be broken if social security systems include protection against basic risks, such as natural hazards,’ emphasised Rompel. GTZ has gathered valuable experience in this field. For instance, in cooperation with insurance company Munich Re it has developed the first ever index-linked microinsurance scheme against flood damage in Indonesia.