How the global recession will impact Asia

The Asian Development Bank has released a study that examines the effect the global recession will have in Asia. The bad news is, that it will increase the already high level of poverty in the region. The good news is, that many economies in Asia are isolated enough from the global financial system that their economies will continue to grow.

From IPS, reporter Prime Sarmiento unpacks the report for us.

The AsDB study, presented at a forum here earlier this month, expects a 6.7 percent growth for South Asia in 2009. This may be modest compared to the 8.6 percent growth posted in 2007, but still implies that the AsDB does not expect the sub-region to fall into recession anytime soon.

Participants at the forum were agreed that the poor, especially in countries like Nepal and Bangladesh, whose economies depend heavily on remittances from its nationals working abroad, were likely to be worst hit.

"While some countries in South Asia have had relatively less exposure to the crisis from the adverse impacts of capital flows, more than half of the 900 million people in developing Asia who survive on 1.25 US dollars a day live in the sub-region, so any tempering of growth is a serious cause for concern," AsDB president Haruhiko Kuroda said at the forum

In a speech delivered at the forum, Arun Shourie, member of India's parliament and former minister of public sector divestment, noted that behind all the macroeconomic data are people who will lose their livelihoods or cannot send their children to school.

South Asia may be home to some of the world's growing economies but positive fundamentals have not done much to improve the plight of the sub-continent's poor.

India, one of Asia's economic powerhouses, has posted an impressive eight to nine percent growth in the past few years. But 30 percent of India's one billion populace subsists on less than two dollars a day.

The situation is worse in poorer economies like Nepal and Bangladesh where nearly 40 percent of the population live below the poverty level, experts at the forum said. The crisis will further intensify inequities with the wealthy remaining unscathed and the poor suffering more.