Economic Inequalities in Asia

Southeast Asia has experienced a surge in economic growth in recent years. According to World Bank data for 2023, GDP (Gross Domestic Product) growth rates are 1.1% for Singapore, 3.6% for Malaysia, 5% for Indonesia, and 5.5% for the Philippines. Nevertheless, income inequality in these regions should not be overlooked. The first appendix provides Indonesia's poverty rate and population-based inequality rate. Although these rates tend to decrease as we approach the present day, the change in recent years has been somewhat less significant, indicating that poverty among a certain segment of the population has not been eradicated. There is a significant income inequality between rural areas, such as Indonesia's remote islands, and urban centers (Jakarta). The fundamental reason for this is the different distribution of the workforce across different economic sectors in rural and urban areas.

Ek 1: Share of the population and population living in poverty at $2.15 per day (2017 PPP) (1984-2023)

India (officially the Republic of India) has the world's most populous country with 1.412 billion people. Of course, this extraordinary population has both advantages and disadvantages. While the country's production and labor force participation rates are increasing, the lack of sufficient job opportunities will lead to a rising unemployment rate. Therefore, according to World Bank data (Appendix 2), GDP growth varies significantly from year to year. GDP growth is used as a measure because it reflects the country's total production growth, which in turn allows for the calculation of per capita income. This allows for the measurement of income inequality. The unevenness of this growth indirectly indicates an imbalance in income distribution.

Ek 2: GSYİH büyümesi (yıllık %) - Hindistan (1961 - 2023)

India's economic growth should be analyzed not only through macroeconomic indicators but also through its socio-cultural impacts. Income inequality, in particular, is directly linked to the caste system, a historical part of the country's culture. Brahmins and Shudras, for example, do not benefit equally from economic growth. Since one lower class serves the higher, economic inequality widens between Shudras and Brahmins. Therefore, the caste system, which still persists in some regions, can be cited as a cause of economic inequality in India. The caste classes are as follows:

1. Brahmins (An intellectual class. They are the interpreters of the sacred scriptures (Veda). Scholars and priests belong to this class.)

2. Kshatriyas (A class composed of soldiers, princes, and high-ranking officials.)

3. Vaishyas (Merchants, landowners, and farmers)

4. Shudras (Workers and slaves)

Regional disparities also play a significant role in India's economic structure. While information technology and the service sector grow rapidly in cities, the agriculture-dependent economy develops more slowly in rural areas. To support technological advancements in India, efforts are being made towards data management through the implementation of the "Personal Data Protection Act." Furthermore, the fact that more than half of the population is under 30 years old indicates that Indian society can adopt technology more easily. Therefore, technological advancements in India contribute to economic growth. Similarly, when comparing China's manufacturing power with India's growing technology sector, it is evident that integration with the global economy creates different dynamics for the two countries. India's advancements, particularly in software and information technology, have increased its competitiveness in the global market, but have not fully closed the income inequality gap.

After India, the world's second most populous country is China (officially the People's Republic of China). Appendix 3 shows that China's economic growth has shown less change in recent years, indicating an effort to achieve economic stability.

Ek 3: GSYİH büyümesi (yıllık %) - Çin (1961 - 2023)

The increase in unemployment resulting from population growth is given in Appendix 4. Considering that unemployment is rising while efforts are being made to maintain economic balance with population growth, this constitutes a threat. Economic growth leads not only to unemployment but also to income inequality. To address this income inequality, the Chinese government has implemented market reforms, particularly since 1978. For example, the greater integration of the rural population into economic life has partially reduced the income gap.

Ek 4: İşsizlik, toplam (toplam işgücünün yüzdesi) (modellenmiş ILO tahmini) - Çin

Furthermore, the rise of China's economy should not be overlooked. China's increasing economic influence worldwide through projects like the "Belt and Road Initiative" is one of the factors deepening its impact on the global economy. Although the United States is currently a hegemon, some economists and politicians believe that China will be the hegemon of the future. Consequently, economic growth policies should focus not only on increasing national income but also on reducing inequality. The economic policies of important Asian countries like China and India are among the elements that determine the future of the world economy, not only within their own borders.

Source:

• World Bank. https://www.worldbank.org/ext/en/home .

• “How India is carving out its role in the Intelligent Age.” The World Economic Forum , September 20, 2024, https://www.weforum.org/stories/2024/09/india-role-in-the-intelligent-age/ . Access date 5 March 2025.

This article was published in Ekvator, the Koç School's geography journal.