Thu, Aug 09, 2007 - Page 1 News List

Asian wealth gap could fuel unrest, ADB warns


The gap between rich and poor in China and other Asian countries is growing, hurting anti-poverty efforts and possibly fueling unrest, the Asian Development Bank said in a report yesterday.

China has had Asia's second-biggest and second-fastest-growing wealth gap since the 1990s, exceeded only by war-wracked Nepal on both counts, the bank said in an annual survey.

China has seen thousands of protests in recent years, some of them violent, over land seizures and other economic grievances blamed on the growing gap. The communist government has made improving incomes for the poor a priority, warning last year that inequality has reached "alarming and unacceptable" levels.

"High inequality, particularly high absolute levels of inequality, leads to a disruption in social cohesion. You could have street demonstrations which could lead to violent civil wars," Ifzal Ali, the bank's chief economist, said at a news conference.

Ali said it was inappropriate to speculate when asked whether China should expect worse unrest. But he cited the experience of Nepal, where he said the recently ended civil war was most intense in areas with highest inequality.

Ali said China's poorest people have benefited from its boom -- which saw the economy expand by 11.9 percent last quarter -- but incomes for the richest 20 percent have grown much faster.

Cambodia, Sri Lanka and Bangladesh also saw rapid growth in the gap between rich and poor, the bank's report said.

China's Gini coefficient, a measurement of inequality in income distribution, was 47 in 2004, the most recent year for which figures were available, up from 40.7 in 1993, the bank said.

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