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Diagnosing causes of inequality crucial for ASEAN
In Southeast Asian countries, indicators of inequality have been rising over the past 15 years.
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People walk along a sidewalk on Jl. Jatibaru Raya in Tanah Abang, Central Jakarta, on Monday. The sidewalk of the street, which was controversially closed to public traffic, has remained busy with street vendors and visitors amid the dispute between the Jakarta administration and parties opposed to the policy. (JP/Steven)
O
ne startling figure about recent global growth is that 82 percent of all the wealth created last year went to the top 1 percent. After focusing on economic growth for a number of decades, developed and developing countries alike have been increasingly concerned with equality.
While globalization has led many developing countries to higher levels of income, it has also increased economic inequality. In Southeast Asian countries, indicators of inequality have been rising over the past 15 years.
Based on latest available estimates, the region as a whole lies toward the middle of the world distribution, behind Latin America and sub-Saharan Africa. At the same time, a growing backlash against globalization has made populist policies that purport to address inequality more appealing to policymakers, even if such policies may inhibit growth.
However, without diagnosing the reasons for growing inequality, one runs the risk of adopting policies that are unhelpful at best and counterproductive at worst.
