NEAT Working Groupon East Asian Poverty Reduction

Report(Final)Beijing, China
10 July 20151

Introduction
The NEAT Working Group Meeting on East Asian Poverty Reduction sponsored by
NEAT China was held in Beijing on 10 July 2015. Twenty five scholars from 11 of theASEAN+3 countries participated in the meeting. Brunei and Vietnam were absent.
The theme of this Working Group Meeting is “Enhancing Regional Cooperation on
Poverty Reduction in the Context of post-2015 Development Agenda”. Poverty is
usually measured as either absolute or relative, with the former characterized bysevere deprivation of basic human needs while the latter being an index of income
inequality. Although East Asia has seen the most impressive reduction in absolute
poverty during the last two decades, poverty remains a major obstacle toward a regionof prosperity. According to World Bank, about 350 million people in Southeast Asia,
almost 44% of the world’s poor, still live in absolute poverty. And the income
inequality in East Asia rose by over 20 percent in the past 20 years, which hasaggregated the imbalance in economic development within and between the regional
economies.
The NEAT Working Group on East Asian Poverty Reduction is oriented towards three
specific goals. First, share information and expertise. Second, examine existingregional cooperation mechanisms and practices against the backdrop of theforthcoming post-2015 Development Agenda. The purpose is to build on theachievements of the past and find out the challenges in advancing the agenda. Third,
produce practical and specific policy recommendations on poverty reduction andsustainable development.
The Working Group Meeting consists an opening session, 3 discussion sessions and awrap-up session. The three discussion sessions focus on the following topics:
1. Poverty reduction in East Asia: experiences and lessons
2. Regional cooperation on poverty reduction: progress and challenges
3. Policy recommendations: ideas, institutions and practices
The following parts attempt to summarize the presentations and discussions of allsessions with a highlight on policy recommendations.

I. Country-specific experiences and lessons
Despite its stellar economic growth and rapid social progress, East Asia as a wholestill faces the challenge of poverty alleviation. For regional countries, although thenature of their poverty and the extent of their poverty rates are not comparable, theirexperiences—“War on Poverty”—can be shared.

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China’s achievements in poverty reduction have been well recognized by the world,
especially in the reduction of the rural poverty, the improvement of rural
infrastructure and social undertakings, and intra-county economic development.
China’s successful experiences include capacity-building of the poor, leading role of
the governments at all levels, social participation, social security building, and thedevelopment-oriented programs. Despite the progress, problems and challenges also
loom large, for instance, the huge size of poor population, regional imbalance, wealthgap, and catastrophic natural disasters, etc. In the coming five years, China is going tocarry out a set of new policies featuring accurate targeting, database building,monitoring and evaluation, etc.
Indonesia has made remarkable achievements in economic development and poverty
reduction. Lessons learnt from the experiences are as follows. First, poverty reduction
should always a government priority in improving social welfare of the people.
Second, poverty reduction requires promoting rapid economic growth. Third,
encouraging entrepreneurship serves as one of the strategic ways to foster wide
participation of people in all economic activities, which is of great importance toeconomic growth with quality. Fourth, essential efforts to drive entrepreneurship
include providing better infrastructure and embracing entrepreneurship educationfrom primary school to university.
In Malaysia, the incidence of poverty has declined from 50% in 1970 to 0.6% in 2014,
due to the implementation of five strategies such as economic growth through New
Economic Policy, large poverty reduction expenditure, rural development, educationand employment promotion, and expansion of social policies and programs. Income
inequality or relative poverty has become a big challenge for sustainable development
and hence the focus of the government’s policy-making.
Poverty reduction is at the top of the agenda of the government, private sector andNGOs in Myanmar. The private sector is expected to play an increasingly importantrole in poverty reduction. The participation of private sector can benefit the poor as
producers, consumers and workers. Poverty reduction in Myanmar may be achieved
through international cooperation.
Cambodia has experienced a certain degree of poverty reduction ever since 1990. Key
factors influencing poverty in Cambodia include economic growth, labor productive
gap between agricultural sector and non-agricultural sector, education, health services,
water and sanitation. In order to help the poorest in rural areas, Cambodian
government has taken a series of important measures such as initiating the
Identification of Poor Household Program and National Social Protection Scheme,
creating more jobs through encouraging more international and domestic investment,
strengthening secondary education, and providing technical vocational training.
In the Philippines, poverty situation has been improved though not significantly.
3Despite economic growth in recent years, income inequality and regional disparity
have continued to persist. There are many contributory factors to this trend including
vulnerability to shocks, low level of education among the poor, lack of productive
jobs even among the highly educated, less access to credit, low budget and poor
targeting system as well as lack of sustainability of government programs, andlogistical challenges. Measures have been taken to address the problems such as theimplementation of various social protection programs including the Conditional CashTransfer program, K to 12 Basic Education program and agricultural insurance
program tied with credit, and good governance initiatives of the government, among
others.
Absolute poverty rate of the ROK is very low thanks to the rapid economic growthand successful policy instruments such as heavy investment in human and physicalcapital, effective family-planning policies and systematic social safety nets. However,relative poverty rate has been on the rise since 1997. Challenges remain significant interms of the increase in the working poor, low fertility and aging population, andfamily structure. Hence, policies and measures at 4 levels deserve high attention,
namely, continuous economic growth, expansion of public assistance, promotion of
the motivation to work, and education and job-skill training.
Singapore’s poverty problem is basically relative poverty. Singapore’s approach topoverty reduction features strong emphasis on eradicating the root causes of poverty,
which involves maintaining continuing economic growth and full employment on one
hand, and supporting human resources development through education and training
on the other. Beyond the bare minimum social security provisions such as the public
assistance scheme, the government provides public housing for 80% of the populationand enrolls all workers into its compulsory pension scheme.
Lao PDR suffers 27.6% poverty rate and increasing income inequality. Poverty
reduction is its primary objective. Practical measures have been taken by thegovernment, among which the establishment of Poverty Reduction Fund and the
National Committee for Rural Development and Poverty Eradication is of greatsignificance. Progress has been made in reducing poverty rate and improving
infrastructures in rural areas.

II. International and regional cooperation: progress and achievements
Poverty reduction in East Asia has been and will be guided by ideas developed by theUnited Nations (UN), the Millennium Development Goals (MDGs) in the past 15
years and the Sustainable Development Goals (SDGs) in the coming 15 years.
Cooperation on poverty reduction in East Asia falls into two categories, namely,international cooperation led and promoted by international institutions such as theUN, the World Bank Group (WB) and the Asian Development Bank (ADB), and4

regional cooperation with ASEAN-centrality. Progress has been achieved throughmulti-tiered mechanisms in absolute poverty reduction, rural infrastructure
construction, agricultural productivity, and human resources development.
1. The UN and the Post-2015 Development Agenda: from MDGs to SDGs
The UN plays a key role in international cooperation on poverty reduction. The
Millennium Development Goals (MDGs) were established in 2000, including eightanti-poverty targets to be accomplished by 2015. Since then, enormous progress has
been made. According to the UN report, global poverty continues to decline; morechildren than ever are attending primary school; child deaths have dropped
dramatically; access to safe drinking water has been greatly expanded; and targeted
investments in fighting malaria, AIDS and tuberculosis have saved millions of lives.
The MDGs have helped end poverty for some, but not all. The Sustainable
Development Goals (SDGs) as the core of a new sustainable development agenda
must finish the job and achieve the goal of a life with dignity by 2030. The SDGs
consists of 6 parts:• dignity: to end poverty and fight inequality;• prosperity: to grow a strong, inclusive and transformative economy;• justice: to promote safe and peaceful societies, and strong institutions;• partnership: to catalyse global solidarity for sustainable development;• planet: to protect our ecosystems for all societies and our children; and• people: to ensure healthy lives, knowledge and the inclusion of women andchildren.
In sum, the SDGs are to end poverty, transform lives and at the same time protect theplanet.
2. International and regional cooperation promoted by the WB and the ADB
The goal of the World Bank in East Asia to “end extreme poverty within a generation”
and to realize “common prosperity”. It has built partnership with regional countries inpromoting inclusiveness and empowerment, employment and private sector-driven
economic growth, governance and mechanism, infrastructure facilities andurbanization, climate change and disaster management. By the end of 2014, the WB
had provided a total of US$35.79 billion in interest-free loan and grant to the poorest
countries and middle-income countries in East Asia. These funds facilitated theimplementation of nearly 30 poverty-reduction programs.
Since 1999, the ADB has prioritized “reducing poverty” in its work, promoting
pro-poor inclusive growth, environmentally sustainable growth and regional
integration. The ADB’s Long-term Strategic Framework (2008-2020) focuses on
infrastructure, environment (including climate change), regional cooperation andintegration, financial sector development and education. It has committed US$47
5billion to infrastructure projects in transport, energy, water, sanitation and ruralcommunity in the Asia Pacific.
3. Regional cooperation with ASEAN centrality
ASEAN has played a leading role in East Asian cooperation in poverty reduction,
especially in building institutions and making initiatives. In 1997, the Senior Officials
Meeting (SOMRDPE) and Ministers Meeting (AMRDPE) on ASEAN Rural
Development and Poverty Eradication were set up and the Framework Action Plan on
the ASEAN Rural Development and Poverty Eradication was developed, identifying
the cooperation targets and priority areas in ASEAN’s poverty eradication, rural
prosperity and development promotion. So far, ASEAN has implemented two 6-year
Framework Action Plans on the ASEAN Rural Development and Poverty Eradication.
And the framework for cooperation from 2016 to 2020 is under development. Besides
rural poverty reduction, narrowing the development gap has also been prioritized in
the building of ASEAN Community. The Initiative for ASEAN Integration (IAI) was
adopted in 2000.
Since 2007, poverty reduction has been an important area for cooperation among
ASEAN Plus Three (APT) countries. Established in 2008, APT Senior Officials
Meeting on Rural Development and Poverty Eradication convenes annually andserves as a crucial platform for experience- and knowledge-sharing. At the same time,
various initiatives and programs have promoted human resource development andcapacity building. In recent years, reducing poverty and narrowing development gap
have become priorities in APT cooperation. China proposed “the Initiative for Poverty
Reduction Cooperation in East Asia” at the 17th APT Summit on 13 November 2014,
which is expected to give a fresh impetus to the regional cooperation on poverty
reduction.
In their respective partnership with ASEAN, China, Japan and ROK have made great
efforts in eliminating poverty and narrowing development gap. The China-ASEAN
Forum on Social Development and Poverty Reduction has become an institutionalized
platform for sharing experiences in poverty reduction and development. The
China-ASEAN Action Plan on Comprehensive Food Productivity Enhancement andChina-ASEAN Plan on Advancing Rural Development have promoted agricultural
infrastructure construction, comprehensive agricultural development, and ASEAN
human resources development. China has trained nearly 400 ASEAN government
officials in 28 workshop sessions on poverty-reduction in the past 10 years. Between
January 2000 and May 2015, Japan International Cooperation Agency provided a total
ODA of about 81.5 billion yen to help Vietnam, Cambodia, Laos and Myanmar carryout 119 programs under the framework of IAI. In 2006, a US$70 million
Japan-ASEAN Integration Fund was set up to support the economic integration of
ASEAN. The Japan-Mekong River Cooperation 2012 Tokyo Strategy pledged an
ODA of 600 billion yen and outlined three pillars for promoting the industrialization6

process and people’s livelihood in the Greater Mekong sub-region. From 2003 to
2007, the ROK provided about US$5 million ODA to ASEAN for the implementationof IAI. In 2009, the ROK promised to double its official development assistance to
ASEAN by 2015, and to enhance its sharing of economic and social development
experience with ASEAN by sending more volunteers. The ROK has also helped
narrow information gap in ASEAN.

III. Poverty-reduction in the context of the post-2015 Development Agenda:
problems and challenges
Despite the achievements and progress, regional cooperation in poverty reduction
remains a daunting task for the long-term goal of building an East Asian community.
In the context of the post-2015 Development Agenda, regional cooperation in poverty
reduction has to deal with both existing problems and new challenges in sustainability,
financing, institutionalization and coordination.
1. Sustainability
Sustainability is a major challenge in regional cooperation on poverty reduction. The
post-2015 Development Agenda affirms the links between poverty reduction andsustainable development. It requires that growth should reduce poverty and inequality
while also protecting the eco-system, and that institutions should be more resilient toshocks and better able to maintain the progress they have made.
In East Asian cooperation on poverty reduction, the investment in sustainable
development has been inadequate. Capacity building has yet to be prioritized. For
instance, APT cooperation in human resources development, especially in skill andvocational-training, is project-based rather than institutionalized. Many cooperative
projects, especially agricultural technology demonstration projects, lose momentum
once the technical experts of the aid-providing countries are withdrawn. Poor
infrastructure in many parts of the region is also a major obstacle toward sustainable
development.
Increasing non-traditional security threats pose a serious challenge to poverty
reduction and sustainable development, to which the poor are the most vulnerable.
Conflict, natural disasters, climate change and environmental crisis can strip away
decades of development gains. The 2007-08 Asian financial crisis increased thenumber of the poor in 23 Asian developing countries by 21 million in 2010. The
2007-08 world food crisis forced over 100 million people back to starvation andincreased the number of hungry people in Asia to 526 million. Besides, many of those
who have escaped poverty remain vulnerable to quickly slipping back when facedwith a major setback to their health, assets or employment prospects. Therefore,
capacity and resilience building of individuals and institutions in mitigating7

non-traditional security risks is extremely important.
2. Funding and financing
There is huge deficiency in funding for poverty reduction and sustainable
development. According to the Asia Development Bank (ADB), there is at least anannual demand for US$8 trillion for infrastructure development in Asia, while theofficial assistance is far from enough. Moreover, SDGs are broader than MDGs andthe realization of the latter needs the paradigm shift of development finance fromofficial development assistance to multi-channel financing which attaches muchgreater importance to private resources and other new factors. For example, although
official development assistance is still a main resource for infrastructure construction,
the private investment, domestic resources and emerging economies and theirinitiatives are becoming increasingly important for development cooperation.
3. Institutionalization
A higher-level framework for institutional cooperation that can mobilize multiple
actors and work for substantive result is yet to be put in place. At present, the APT
cooperation on poverty reduction is at the Senior Officials Meeting (SOM) level andbased on projects. The SOM takes place annually for experience- andexpertise-sharing. Projects are of different themes and varieties and lacks synergy or
integration, which have significantly reduced the effect of cooperation. Moreover,there is no information-sharing network that can release, monitor and analyze thepoverty data and poverty reduction policies in the region. Therefore,
institutionalization is needed for APT countries to conduct practical consultation andtaking substantial actions for poverty reduction.
4. Coordination
How to involve and coordinate the participation of all parties and stakeholders is amajor challenge for APT cooperation on poverty reduction. In the ongoing regional
cooperation, governments and ODA still play the main role while the participation ofother actors remains far from enough or effective. Some projects or programs,
because of the lack of social or market participation, failed to achieve the desired
goals. Besides, there is neither regular coordination among existing cooperation
frameworks and mechanisms nor policy coordination among regional countries,
which sometimes can lead to a waste of resources or seriously affect the effectivenessand efficiency in poverty reduction cooperation. So on the one hand, the resources forpoverty reduction are still limited; on the other, it is not rare to see the overlap andduplication of poverty-reduction projects.
In addition, how the emerging factors and actors should be harmonized with theexisting international framework of development is another challenge in future8

cooperation. Emerging economies are already key players in international
development. They are also providers of financial resources. And a huge amount ofmoney is needed for infrastructure in the region for poverty reduction and sustainable
development. The Asian Infrastructure Investment Bank (AIIB) initiated by China is a
useful additional source for infrastructure improvement. But how the exiting
institutions are going to coordinate with the AIIB, especially in terms of the loan
conditions, is a question.

IV. Policy recommendations: sustainability, integrity and capability
In the context of the post-2015 Development Agenda, East Asian regional cooperationin poverty reduction shall not only eliminate absolute poverty, narrow development
gap and promote economic growth, but also incorporate the new notions ofsustainable development so as to achieve comprehensive and balanced goals of
economic development, social justice, environmental protection and good
governance.
In order to achieve these goals, regional cooperation on poverty reduction should be
inclusive, recipient-oriented, and pragmatic. Inclusive means both absolute andrelative poverty should be reduced. Inclusive also means more social or market
participation in reducing absolute as well as relative poverty. Recipient-oriented
means that cooperation programs should be customized to meet different conditions,development levels and models. Pragmatic means efforts should be made to produce
tangible benefits out of poverty reduction projects to increase effectiveness andefficiency of cooperation.
Based on the past experiences and new challenges, the following policy proposals are
made to achieve the above-mentioned goals, which attach great importance tosustainability, integrity and capability-building in regional cooperation on poverty
reduction.
1. Further institutionalize APT cooperation on poverty reduction.
••

Establish an APT Ministers Meeting on poverty reduction. An APT
Ministers Meeting on poverty reduction should be established, which shall beheld at least once a year as the major mechanism for policy coordination anddecision-making in regional cooperation on poverty reduction. In order togive full play to the Meeting, supporting mechanisms should also be put inplace as soon as possible.
Develop a post-2015 Action Plan for APT Poverty Reduction Cooperation.
Being in line with the post-2015 Development Agenda and aiming at theSDGs in the region, the Plan should identify specific goals, strategic roadmap,
priority areas, timetables and implementing measures regional cooperation on
9•poverty reduction and sustainable development for the 2016-2030 period.
Set up an APT Task Force for poverty reduction. An APT Task Forceshould be set up at an early date to conduct joint study and to provide
intellectual support for official cooperation. The Task Force composed ofleading experts from APT countries shall carry out relevant research byphases according to the Action Plan and report to the Ministers Meeting.

2. Innovate financing models and integrate emerging sources and actors.
•••

Realize paradigm shift of development finance from official development
assistance to multi-channel financing. Great importance shall be attached to
private investment, domestic resources and emerging economies and theirinitiatives. Although official development assistance is still a main resource
for financing poverty reduction and sustainable development, it is importantto leverage and catalyze private flows and domestic resources.
Explore the feasibility of establishing an APT Development Fund. One
option can be making good use of the APT Cooperation Fund. The
Development Fund can be used for regional cooperation projects on poverty
reduction and sustainable development.
Promote the coordination among relevant international institutions inregional infrastructure development, for instance, the Global Infrastructure
Facility of the WB, the ADB and the AIIB.

3. Build development partnership and integrate regional efforts in poverty
reduction.
•

•
•

•

•

Build effective and interactive public-private cooperative partnership(PPP). Encourage extensive participation of public and private sectors, civilsociety, and non-governmental organizations in regional poverty reduction
and development projects.
Nurture a win-win development culture between the donors andbeneficiaries under multilateral governance frameworks.
Develop regional network among development and poverty reduction
agencies with national focal points. Regional networking should be built
and strengthened with a view to better coordinating and allocating resources
and practices under various mechanisms.
Set up an APT Forum for Social Development and Poverty Reduction.
The Forum should bring all parties concerned and convene annually to shareexperience and exchange views on further promoting poverty reduction andsustainable development.
Set up a database for ASEAN+3 poverty reduction, where regionalcountries can constantly update information, release policies and track theprocess of poverty reduction at national and regional levels. Updated
information and accurate data is very important for planning and10policy-making in poverty reduction.
4. Strengthen capability-building through education, training and pilot projects.
•

Further promote regional cooperation on education and training,
especially vocational-education and skill-training. Such training andeducation programs should be regularized, well planned and guaranteed byregional cooperation fund. Sustainable and inclusive development in theregion cannot be achieved without the capability-building of the poor
population.

•

Further promote higher education in sustainable development to build
intellectual reserve for long-term regional cooperation and community
building. The advanced economies in the region shall provide scholarships
and degree programs concerning poverty reduction and sustainable
development to less developed ones. The degree programs for poverty
reduction and sustainable development should, among other, include course inentrepreneurship.

•

Carry out village-level pilot projects. Rural poverty reduction is a major
challenge for most regional countries. At the 17th APT Summit in 2014, China
promised to fund Village-level Demonstration Program for Cooperation on
Poverty Reduction. Such programs have been proven effective in China’s
domestic practice, which have improved the basic infrastructure of villages
and hence equipped the villagers with basic capabilities and conditions fordevelopment. Village-level pilot or demonstration projects should be
developed and supported by regional countries to lift a large number of ourpeople out of absolute poverty, and prepare them for sustainable development.

Conclusion
The year 2015 will witness the declaration of the establishment of ASEAN
Community, and the world embarking on the ambitious post-2015 Development
Agenda process. At this critical juncture, it is essential and pressing for East Asian
countries to get thoughts into shape and take actions to strengthen regional
cooperation on poverty reduction. Poverty will never end for both developing anddeveloped countries. APT countries should further consolidate political will, increase
investment, and make integrated efforts to build a region oriented toward prosperity,
good governance and sustainable development.

Appendix: List of Participants of the NEAT Working Group Meeting on East Asian
Poverty Reduction
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List of Participants

Cambodia
Poch Sovanndy
Deputy Director General of Planning, Ministry of Planning, Cambodia

Indonesia
Paulus Kindangen
Professor, Faculty of Economics and Business, Sam Ratulangi University

Carolus Paulus Paruntu
Associate Professor, Chairman of the ASEAN Study Center
Sam Ratulangi University

Japan
Juichi Inada
Professor, Senshu University

Korea, the Republic of
Hyung-Jai Choi
Associate Professor of Economics, Korea University

Laos
Sonexay Vannaxay
Deputy Director General, Institute of Foreign Affairs

Malaysia
Muhammed Bin Abdul Khalid
Director of Research, Khazanah Research Institute12

MyanmarThuta Aung
Senior Research Fellow
Myanmar Institute for Strategic and International Studies ( ISIS)

Philippines
Christian Mina
Supervising Research Specialist
Philippine Institute for Development Studies (PIDS)

SingaporeJohn Wong
Professorial Fellow, East Asian InstituteNational University of Singapore (EAI, NUS)

Thailand
Piyapong Boossabong
Lecturer, College of Politics and Governance, Mahasarakham University

VietnamNguyen Thuy Minh
Researcher, Diplomatic Academy of Vietnam

China
Wei Ling
Professor of International Studies, Director, Institute of Asian Studies, CFAU

Li XinDirector, Division of International Exchanges
13International Poverty Reduction Center in China

Liu Yonggong
Professor, College of Humanities and Development
China Agricultural University

Xu JinProgram Officer, Division of International Exchanges
International Poverty Reduction Center in China

Ji Ling
Deputy Director, Institute of Asian Studies, CFAU

Guo Yanjun
Associate Professor of International Studies
Deputy Director, Institute of Asian Studies, CFAU

Cui Haining
Associate Professor, Institute of Asian Studies, CFAU

Han Zhili
Associate Professor, Institute of Asian Studies, CFAU

Li Fujian
Research Fellow, Institute of Asian Studies, CFAU

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