Poverty, Inequality, Environment and Urbanization

Transcription

1 Poverty, Inequality, Environment and Urbanization Guanghua Wan Principal Economist ADB 1

2 Asia has seen fast growth ( ) Developing Asia Sub-Saharan Africa Latin America and Caribbean OECD

3 The growth continues despite crises GDP growth f: forecast year moving average f 2013f 7.3 3

4 Growth helps reduce poverty

5 But growth quality? Asia remains home to the largest number of poor Rest of the World 4% Developing Asia 63% Sub Saharan Africa 33%

6 little reduction in moderate poverty 2000 Number of poor (in million) $1.25-$2.00 $0- $

7 Poverty reduction mainly from PRC and India ($1.25) India 20% Viet Nam 5% PRC 57% Bangladesh 4% Pakistan 3% Others 11%

8 Developing Asia in the Pacific, the number of $1.25 poor rose Sub-region HCR (%) No. of Poor (million) % change % change Central and West Asia East Asia Pacific South Asia Southeast Asia

9 The growth impacts on poverty decline over time 40 Average annual change (percentage point) under $ Head count ratio

10 largely due to rising inequality Growth elasticity Central and West East -0.8 South Southeast Initial Gini The Pacific No. of obs 124 R-squared Adj R-squared Variable Coefficient Std. Error t stat P-value Gini Constant

11 Inequality in Asia has risen... Nepal Cambodia Philippines Georgia Turkmenistan Sri Lanka Viet Nam India Lao PDR Taipei,China Tajikistan Bangladesh Pakistan Gini Index Earliest (1990s) Latest

12 Poverty-growth-inequality triangle $1.25 a day Lao PDR Cambodia Philippines Indonesia Viet Nam Sri Lanka Simulated Actual

13 The inequality growth relationship in PRC (dashed = yearly; solid = cumulative)

14 Spatial (urban-rural) gaps as main contributor to high inequality Share of spatial inequality to total inequality (%) Sri Lanka (2009) Philippines (2009) Pakistan (2008) Indonesia (2009) India (2008) Viet Nam (2008) Bhutan (2007) PRC (2007) 14

15 China s Regional Inequality Total Theil Urban-rural gaps Other gaps 0.00

16 Urbanization the only solution GDP = $100, Population = 10 GDP Urbanization Average Income City $90 6 (60%) $15 Rural $10 4 (40%) $2.5 Urban rural ratio 6! City $90 8(80%) $11 Urban rural ratio 2.2 Plus Transfer <2.0

17 Asia s urbanization is unprecedented Increase in Urban Population in Asia and the Pacific (millions) Increase in Urban Population (million) billion 1.06 billion Bangladesh Pakistan Indonesia India China, People's Rep. of Rest of Asia & Pacific Source: ADB estimates using UN(2012).

18 Unique feature 1: very fast speed Number of Years from about 10% to 50% of Urbanization Rate Latin America and Caribbean North America Europe 10% 210 years 49% 105 years 9% 51% 150 years 12% 51% Asia and the Pacific 11% 95 years 51% Viet Nam Indonesia Lao PDR Bhutan China, People's Rep. of 90 years 12% 50% 12% 65 years 54% 60 years 10% 52% 10% 55 years 51% 11% 61 years 51% Source: ADB estimates using Bairoch (2008) and UN(2012).

19 Unique feature 2: highest densities in the world Top 25 World's Cities Ranked by Density, 2007 Density (person/m 2 ) Asia & the Pacific (17/25) Africa Europe Latin America & Caribbean Middle East & North Africa Mumbai Kolkata Karachi Lagos Shenzhen Seoul/Incheon Taipei,China Chennai Bogota Shanghai Lima Beijing Delhi Kinshasa Manila Tehran Jakarta Tianjin Bangalore Ho Chi Minh City Cairo Baghdad Shenyang Hyderabad São Paulo Source:

20 Unique feature 3: many megacities Megacities, 2010 ASIA: 12/23 Note: The circles indicate population sizes ranging from (10 million) to (39 million). The circles do not reflect the physical extents of the cities and any overlap between them merely reflects their relative population sizes and not any official acceptance or endorsement of any geographical sovereignty. Source: UN (2012).

21 Unique feature 4: low starting base 100 Level of Urbanization by Region (%) Level of Urbanization (%) % 43% 67% 63% Source: ADB estimates using Bairoch (2008) and UN(2012).

22 Unique feature 5: the largest cities are likely to grow bigger Urban Primacy (%, 2009) 25 Ratio of Population in Largest Cities over Urban Population (%) Asia Non-Asia Source: ADB estimates using UN(2012).

23 thus more and bigger megacities are emerging Megacities, 2025 ASIA: 21/37 Note: The circles indicate population sizes ranging from (10 million) to (39 million). The circles do not reflect the physical extents of the cities and any overlap between them merely reflects their relative population sizes and not any official acceptance or endorsement of any geographical sovereignty. Source: UN (2012).

24 Unprecedented urbanization poses enormous challenges already serious Rising urban crimes Expansion of slums Above all, environmental degradation Pollution Vulnerability to flooding

25 Theft rates rise with urbanization 4500 Theft Rate versus Level of Urbanization: Global Data 4000 Theft (Rate per 100,000 population) Urbanization Level (%)

26 Over 60% of global slum dwellers in Asia Shares of Global Slum Dwellers, 2010 Non-Asia, 39% Asia, 61% Source: UN-HABITAT.

27 and slum dwellers rise over time Asian Slum Dwellers, Slum Dwellers (in million) Source: UN-HABITAT.

28 67% of Asian (vs. 11% Non-Asian) cities fail to meet EU air quality standard 400 Cities with PM 10 above 100 ug/m 3 ( ) PM 10 Level (micrograms/cubic meter) Asia and the Pacific (34/57) Non-Asia and the Pacific EU standard 0 Ahwaz Ulaanbaatar Sanandaj Ludhiana Kermanshah Yasouj Kanpur Delhi Lucknow Uromiyeh Qom Indore Khoramabad Agra Al Ain Lanzhou Kolkata Van Xining Urumqi Faridabad Greater Cairo Mexicali Jabalpur Mumbai Dhanbad Ilam Allahabad Bushehr Kerman Jinan Beijing Patna Sarajevo Abu Dhabi Meerut Xi'an Jaipur Qazvin Medan Chengdu Hefei Shenyang Taiyuan Varanasi Chongqing Wuhan Esfahan Shijiazhuang Konya Kars Hamedan Arak Harbin Tianjin Nanjing Denizli Source: WHO (2012).

29 CO 2 emissions grow fast in Asia Growth of Per Capita CO 2 Emissions over (%) % Asia 18% Non-Asia Source: ADB estimates using World Bank (2012).

30 and three of the top five CO 2 emitting economies are in Asia. Top 5 Countries in terms of CO 2 Emissions CO2 emissions (kt) China, People's Rep. of United States India Russian Federation Japan

31 Environment may degrade further with growth CO2 emissions (tons/capita) Asia s Environmental Kuznets Curve 2010=$6,107 Peak=$40, GDP per capita (in 2005 PPP) Source: ADB estimates using World Bank (2012).

32 CO 2 emissions may triple under the business-as-usual scenario CO2 emissions (tons/capita) Projected CO2 emissions based on latest EKC Source: ADB estimates using World Bank (2012).

33 Asia is more vulnerable to coastal flooding Risk of Coastal Flooding by Region, 2000 Urban population at Risk (million) Share of Population at Risk (%) Urban Area at Risk ('000 km 2 ) Share of Area at Risk (%) Africa Asia and Pacific Latin America Europe Source: ADB estimates based on McGranahan et al

34 Vulnerability will rise with urbanization Coastal Flooding Inland Flooding Population at Risk (million) M M M M East Asia South Asia Southeast Asia Central and West Asia Source: Balk and Montgomery (2012).

35 Unique features of Asian urbanization make challenges more serious... Low level = a long way to go Fast speed = little time to adjust or learn More & bigger megacities = hard to manage More slums = higher vulnerability

36 But, urban agglomeration can help Service sector pollutes less Manufacturers relocate (e.g., decline manu.) Efficient provision of infrastructure and services Innovation and higher labor productivity Nurture middle class and property owners And...

37 Urbanization leads to lower fertility Reduction in Population (million) Reduction in Projected Population due to Urbanization

38 and more human capital Sacrifice Growth Sacrifice Income Pay Higher Taxes Support Regulation Population Subgroups By educational attainment No formal education Less than Secondary Education Secondary Education At least Some University Education World Asia

39 better health as well Infant Mortality Rate (infant deaths/ 1,000 live births) Infant Mortality Rate and Level of Urbanization, World, Level of Urbanization (%) Source: UN (2011) and (2012).

40 The environmental impacts of urbanization The growth impact may be negative The composition effect is positive Technical effect is also positive

41 Environment-Urbanization relation has improved over time Environment-Urbanization Curves PM10 Level (ug/m3) PM s 1990s CO2 emissions (mt/capita) CO s 2000s Level of Urbanization (%) Level of Urbanization (%) Source: ADB estimates.

42 Green urbanization can help shift the curves further Megacities with satellite cities: ToD, BRT, green/compact/eco- cities concepts Exploit late comer advantage: Leapfrog technology by import or R&D; Timely introduction of regulations: pollution/emission pricing, carbon tax or cap & trade, reduce subsidies, increasing block tariffs,

43 Conclusions It is counter-productive to contain urbanization, even for environmental concerns But, urbanization must exploit Asia s own unique features Asia can achieve quality growth (lower inequality, less poverty and better environment) through well-managed urbanization!

44 Thank You