Made by Wannaphong Durongkaveroj, Student at Chiang Mai University, Thailand. This ppt benefit everyone who interests in the social problems about poverty and income inequality in Asia.

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Poverty and income
inequality in Asia
Too big to ignored ?
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9. Contents
1 Introduction
2 Case : China’s Inequalities
3 Case : Philippines and Taiwan
4 Case : Global distribution of income

10. Percentage population living on less than $2 per day

12. social problems
Poverty
Retarding
Growth
Income
Inequality

13. Perspective
Poverty
have inadequate
The inability to income or
access for a education, or be in
minimal poor health, or
standard of feel powerless, or
living lack political
freedoms.

14. Absolute Poverty Relative

15. Absolute Poverty

16. Relative Poverty
Judged by
standard of
country
Standard
referred to
Relative term of
society
Different
among
countries

17. National Poverty Line
Standards and definitions vary
across different countries
poverty line deemed appropriate for National Poverty
a country by its authorities Line
Based on population-weighted
Subgroup estimates from
household surveys

19. International Poverty Line : 2$ per day

20. Asia’s performance
Sustained Economic Growth Poverty and income
inequalities exist
Country’s performance ASIA A majority of the world’s
quite varies poorest people today
a majority of the world's population
Asian poverty being
Concentrated in South Asia.

22. Divergence
Phase 1 Phase 2 Phase 3
The data and
statistics affirm Some of Asia has
that gap between shown good Asia, holding the
the rich and the progress on largest
poor has poverty in recent populations, still
grown, rather than years, like China has many
diminished, with and South Korea extreme poor
sustained growth
in income

23. Perspective
Broader concept than poverty
Define entire population
Inequalities Does not emphasize on the poor
Difference in level of living
The rich and The poor

24. Inequalities
• When economy achieve
economic growth
• Ideally, benefits should
distribute to individuals equally
• In fact, it accrues to some
members other than others

25. The extent of concept
Inequalities refer to the uneven
distribution of income across the
population or individuals within society
The gap between the rich is inevitably
consequence of growth and
development
the high inequality raises a moral
question about fairness and social
justice

26. Measurement of Poverty
1. Headcount Index
It’s the proportion of poor people in the population or the headcount ratio (HCR).
q
HCR
n
Where q refers to the number of individual below a given poverty line, and n refers to the
total number of individuals in country.
For example, Thai’s poverty line 2010 is 1,678 Thai Baht or approximately
$54 per month. There are 5.1 million individuals live below the poverty line. And our
population is about 66 million people.
Thai’s HCR = 7.72%
So, headcount here would show us that 7.72% of total population is in poverty.

27. Measurement of Poverty
2. Using the poverty line that called the international poverty line
It can use to compare among many countries by some standard. The
World Bank uses two lines for what can be called poverty (percentage of
household live in $2 per day) and extreme poverty (percentage of
household live in $1 per day)
Nowadays, there is the national poverty line that stems from
concerning about the difference in each country about population, economic
condition and so on. So, the national poverty lines vary in each country.

28. Measurement of Inequality
1. Using percentage share of income
We divide the population into 5 groups (Quintiles) or 10 groups
(deciles), and consider about what percentage share of income that
each group receives. Ideally, each group has to get income or
benefit equally, but it does not like this due to uneven distribution
which leads to inequality.

29. Ideally
Income Category Percentage share of income
Lowest Quintile 20%
Second Quintile 20%
Third Quintile 20%
Fourth Quintile 20%
Highest Quintile 20%

30. In fact (data from https://www.cia.gov/library/publications/the-
world-factbook/fields/2047.html) Thailand -2009
Income Category Percentage share of
income
Lowest deciles 1.6%
Second deciles N/A
Third deciles N/A
Fourth deciles N/A
Fifth deciles N/A
Sixth deciles N/A
Seven deciles N/A
Eight deciles N/A
Ninth deciles N/A
Highest deciles 42.6%
Highest Quintile is higher than lowest Quintile about 25 times.

31. China - 2008
Income Percentage share of
Category income
Lowest deciles 3.5%
Second deciles N/A
Third deciles N/A
Fourth deciles N/A
Fifth deciles N/A
Sixth deciles N/A
Seven deciles N/A
Eight deciles N/A
Ninth deciles N/A
Highest deciles 15%
Highest Quintile is higher than lowest quintile about 4.3 times

32. Singapore - 2008
Income Category Percentage share of
income
Lowest deciles 4.4%
Second deciles N/A
Third deciles N/A
Fourth deciles N/A
Fifth deciles N/A
Sixth deciles N/A
Seven deciles N/A
Eight deciles N/A
Ninth deciles N/A
Highest deciles 23.2%
Highest Quintile is higher than lowest quintile about 5.27 times

33. Japan – 2008
Income Category Percentage share of
income
Lowest deciles 1.9%
Second deciles N/A
Third deciles N/A
Fourth deciles N/A
Fifth deciles N/A
Sixth deciles N/A
Seven deciles N/A
Eight deciles N/A
Ninth deciles N/A
Highest deciles 27.5%
Highest Quintile is higher than lowest quintile about 14.5 times

34. Measurement of inequalities
2. Lorenz Curve and Gini Coefficient
Lorenz curve gives information on the
distribution of income. It’s a rough index of
income inequality.

36. Lorenz Curve
 The horizontal axis gives the percentage of households.
The vertical axis gives the percentage of nation’s
income. The green line or 45-degree line is called line of
equal distribution or egalitarian line.
 Note that no nation has a Lorenz curve such as green
line. The degree of inequality typically prevails.
 From the information in Lorenz Curve, we can get the
Gini index, which measure the degree of inequality for
any income distribution by calculating the ratio of area
between the Lorenz curve and 45-degree line.

38. Gini Coefficient
Area A
So, Gini Index (G) =
AreaA AreaB
If the Gini coefficient were equal to
zero, the Lorenz curve would be the
45-degree line. The closer to zero, the
more equal about income distribution.

39. Gini Coefficient and Tax
Gini Coefficients are often calculated for pretax and posttax
income distribution. If the Gini coefficient is lower for the
posttax, it means that taxes have served the function of
reducing income inequality.
For example, on average in 2000s,
Japan’s Gini coefficient pretax is 0.462
Japan’s Gini coefficient posttax is 0.329
It means that imposition achieve the target of reducing
inequalities

40. China

41. SUMMARY
China 2010 ranks the world's 2nd largest economy. It is the
world's fastest-growing major economy with consistent growth rates of
around 9% over the past 30 years since 1980. At that time, economic
reforms initiated after 1978 began to generate significant and steady
growth in investment, consumption and standards of living.
China is also the largest exporter and second largest importer
of goods in the world. The country's per capita GDP was $7,544 in
2010. Especially, the provinces in the coastal regions of China tend to
be more industrialized while regions in the hinterland are less
developed.

43. Two sector : agriculture and industry
 The two most important sectors of the economy are
agriculture and industry. The two sectors differs in many
terms including technology, labor productivity, and
incomes that have advanced rapidly in industry than in
agriculture.
 Agricultural output follows the effects of weather, while
industry is directly influenced by the government. The
disparities between the two sectors have combined to
form an economic-cultural-social gap between the rural
and urban areas.

45. Coastal and Inland Problems
 Economic development is more rapid in coastal than in
the inland area, and there are large disparities in per
capita income between these regions. The three
wealthiest regions are in the southeast coast, centred on
the Pearl River Delta; along the east coast, centred on
the Lower Yangtze River; and near the Bohai Gulf, in the
Beijing–Tianjin–Liaoning region.
It is the rapid development of these areas that
is expected to contribute to the Asian regional
economy growth, and Chinese government policy is
designed to remove the obstacles to accelerated
growth in these wealthier regions.

47. 5 Policies to reduce inequalities
:
 China Western Development for increasing economic situation of
the western provinces through capital investment and development
of natural resources.
 Revitalize Northeast China, to renew the industrial bases in
Northeast China covered the three provinces of
Heilongjiang, Jilin, and Liaoning
 Rise of Central China Plan to boost the development of its central
regions. It covers six provinces:
Shanxi, Henan, Anhui, Hubei, Hunan, and Jiangxi.
 Third Front, focused on the southwestern provinces.
 Go Global, to encourage its enterprises to invest overseas.

48. Introduction Policies Conclusion
Problem & Background Causes of Problem Solutions & Advices

49. Problem Cause Impact
China’s regional
inequality,
Rapidly growing China’s especially
internal income economic reform between its
inequality in 1978 inland and
coastal regions,
has risen
considerably

50. Regional Differences
Inland regions have less favorable
natural conditions for
agricultural production.
Long distance of inland regions limits Geography plays a
the access to seaports and
international market.
role in producing
Geography also affects
regional development

51. Government Policies
Fiscal
Decentralization
Globalization Margetization

52. Fiscal
Globalization Marketization
Conclusion
decentralization
- Enhance trading -Weaken the financial -Make an ownership
- make a connection to capacities of the central transformation
others government - market flexibility
Target - impair its abilities to - effectively absorbed
redistribute resources surplus rural labor into
among region for an industrial production
equity
-Considerable autonomy -It took place only -Lead to many non
Coastal - enjoy Tax treatment coastal area state enterprise
- preferential allocation - Especially the new - rapid economic
Benefit
of resource rich provinces growth
-Inland’s FDI is less than -Insufficient revenue -Inland ownership
Coastal’s FDI, so it is - heavier fiscal burden transformation has
attractive investor to - a worse investment been carried out more
invest in coastal more environment slowly
Inland than inland area - inland regions have
effect - lack of opportunities to been lacking behind in
grow due to small developing key market
magnitude of investment. institution

53. Comparison
between Philippines
and Taiwan

54. Gini Coefficient
Year Philippines Taiwan
1985 0.410 0.290
1988 0.406 0.303
1991 0.438 0.308
1994 0.429 0.318
1997 0.462 0.320
2000 0.461 0.326
2003 0.445 NA
2006 0.440 NA

55. Share of Total Income of the
Poorest Quintile and the Richest
Quintile
Philippines
Year Poorest 20% Richest
20%
1988 5.2 51.8
1991 4.7 53.9
1994 4.9 52.0
1997 4.4 55.5
2000 4.4 54.8
2003 4.7 53.4

56. GDP per capita PPP $USD
Year Philippines Taiwan
2000 3,800 17,400
2001 4,000 17,200
2002 4,200 18,000
2003 4,600 23,400
2004 5,000 25,300
2005 4,700 27,500
2006 5,000 29,500
2007 3,200 30,100
2008 3,300 31,100
2009 3,300 32,000
2010 3,500 35,700

57. GDP per capita PPP $USD
Taiwan
Philippines

58. Population below poverty line (%)
Year Philippines Taiwan
1997 36.8 N/A
1999 N/A 1
2000 33.0 1
2001 38.0 N/A
2003 24.9 N/A
2005 N/A 0.9
2006 26.4 0.9
2007 N/A 0.95
2008 N/A 1.08
2009 26.5 N/A
2010 N/A 1.16

59. Causes of income inequality in
Philippines
• Dynastic political culture
Institution • Corruption
• Landlocked
Geography • Frequency of typhoons hitting the
province
• Lack of adequate education
Education opportunity in the country

60. Causes of poverty in Philippines
Nonperforming
Declining revenue Poor investment
loans in the banking
collection climate
sector
Governance
Gradual loss of structure, corruption
international and inefficiency in
competitiveness economic
management

63. Conditions for development in
Taiwan
Good
governance
Reformed
the health
insurance
system
Taiwan
government
expanded the
availability of
higher education

64. Global distribution of income

65. Global distribution of income
Manage
property
right
Lower Promote
trade economic
barriers activity
Globalization

66. Other ways to reduce poverty and inequality
 Open Economy in overall sectors
 Land reform
 Inherence tax
 Welfare state
 Green Revolution
 Technological process
 International consensus

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