New Zealand & Asia’s common ground: inequality increasing, poor people screwed

The core message of the recent Asia:NZ Foundation report ‘Get to Know Your Future Asian Overlords, Europlebs’ – sorry – ‘Preparing for a Future with Asia’, is that New Zealand is doomed unless it approaches ‘Asian’ stuff with more intelligence and nuance. Oh no! But what is Asia to New Zealanders without moronic generalisations? Thankfully, that bitter pill was delivered in an attractive candy coating that crackled justifiably about Asia as a ‘world of opportunity’, and the harbinger of a new wave of globalisation. Asia is now prestigious territory; Asia is the new cool. And doesn’t it have awesome food?

Does it? There’s something rather ironic about that awesome food situation.

Poverty reduction in the Asian region since the 1980s has been phenomenal, but assumptions that increasing inequality in the region is all ‘relative’ inequality produced by rapid growth in middle class incomes, has disguised absolute increases in inequality in the last five years – including problems for food security and nutrition. Asia:NZ’s report happened to coincide with the release of ‘Trade on Human Terms’, the UNDP’s 2006 Human Development report for the Asian region, which brought this worrying news in its mixed bag. This report is exactly what people should be reading in order to prepare for a future with their Asian overlords.

As if to prove that New Zealand’s fate is aligned with the region, our Ministry of Social Development this week confirmed that in New Zealand, just like in Asia, inequality is increasing, and our poor people are screwed. In both cases this inequality is not just the kind where the poor people have gained less than the rich people but are still better off than they were, and are supposedly sitting around being envious of those with more SkyTV channels than them. It’s the kind where the poorest percentage of people have unexpectedly become poorer in real terms. In New Zealand more people in 2004 simply couldn’t afford the same basic items as they could four years previously. Meanwhile the structural consequences of the last decades of economic and trade reform are grinding on those at the bottom of the heap in the Asian economies.

The trade story in Asia is familiar - agricultural trade is heavily distorted towards the self-subsidising OECD countries, pricing out local farmers in less developed Asian countries. World Bank and IMF structural adjustment demands have exacerbated the dive in living standards for the rural poor. That ‘Asian boom’ regional rush into export-led growth came at the expense of investing in agriculture and rural human development. According to the UNDP, malnutrition is on the rise in Thailand, the world’s biggest rice exporter. Since China’s accession to the WTO five years ago, living standards of the rural population have dropped by 6%, and income inequality has increased in absolute terms; the rural poor are bringing in less money than they did in 2001, and the urban middle classes and wealthy more.

One might hear China’s economic elite bellowing in response: ‘We are no longer a nation of farmers! Who needs food? We make iPods!‘ However, if you’re ‘picking winners’ and trying to abandon the losers to die off, as well as appearing an absolute bastard, you might eventually find that you do actually need what these ‘losers’ were trying to produce all along.

In the case of New Zealand’s increasing hardship for families on benefits, there is something that the country really needs from them that we’re making it difficult for them to produce, and which no-one else in the country seems to want to produce: Lots of healthy children.

For Asia, it might be the ‘Asian food’ that we all love so much. For as well as all the other socially and politically destructive domestic effects, the UNDP predicts that the trade distortions of OECD subsidised food imports, the increased dependence of Asian countries on that food, and decimation of those countries’ agricultural sectors, could lead to global food shortages. Then where will we be in this Asian boom? Whence our overly sweet pre-made roti chenai to be feasted on by Wellington civil servants?

Like those other New Worlds of opportunity that were the subject of so much epic narrative and dubious wealth accumulation in the past, the streets of New Money Asia are not literally paved with gold. Adventurers and opportunists alike must make informed decisions about whether or not to be complicit in systems that are out of balance and causing real harm. At the most facile level (without even going into labour standards), how will you react if you invest in a development on prime land in a rural area in China, and disgruntled villagers come to greet you rioting? Or if you go to Singapore for the World Bank summit this year, and not everyone in the country smiles at you despite the promises of the national smiling campaign? If you really are ‘prepared for your future with Asia’, you might be annoyed – but hopefully, you won’t be completely surprised.

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