Globalization and Poverty in Asia: Can Shared Growth Be Sustained?

Abstract

The opportunities offered for economic growth through globalization can be large, and the forces of globalization have the potential to provide a major reduction in poverty in the developing world. However, the question is often raised as to whether the actual distribution of gains is fair and, in particular, whether the poor benefit proportionately less from globalization and could under some circumstances in fact be hurt by it. The risks and costs incurred by globalization can be significant for fragile developing economies and the world’s poor.¹ The fear that the poor have been bypassed or even hurt by globalization has been highlighted by the findings from a number of recent studies, which point towards a continuing high inequality in world income distribution, and limited (if not a lack of) convergence among participating national economies and across regions as the world economy has become more interdependent and more integrated.² There is much empirical evidence suggesting that openness contributes to more within-country inequality.