Emerging economies and widespread poverty
Asia is a continent with a very wide range of different economic, social and political developments; China and India have long since become important players on the global stage. In contrast, other countries like Nepal and Tajikistan have yet to benefit significantly from the region’s economic progress. While Asia was experiencing dynamic overall economic development with high growth rates prior to the outbreak of the coronavirus pandemic, the picture there is split when it comes to the development of poverty rates. In East Asia, poverty rates are dropping – primarily thanks to China’s economic success. In total, only around 24 million people in East Asia still live in absolute poverty, though this figure is as high as 282 million in South Asia. These people live on less than USD 1.90 per capita per day.
The political situation differs greatly in the individual countries. Home to almost 1.4 billion people, India is the world’s largest democracy, while democratic Indonesia follows behind in fourth place in this regard. At the same time, the continent is home to politically unstable countries, some of which are experiencing prolonged armed conflicts such as Afghanistan and Pakistan, while the Indo-Pacific region is increasingly becoming a backdrop for geopolitical action. Human rights violations are a common occurrence in some countries; women and disabled people experience discrimination, and ethnic minorities are persecuted or expelled.
The rapid economic upswing in East, South-East and South Asia is placing strain on the environment. In large cities like Jakarta, the ground is sinking due to the excessive abstraction of ground water, and waste water fails to go through sufficient treatment processes. The Indian city of Delhi is often affected by smog or smog alarms. Huge areas of forest are cleared across Asia every year, which is contributing to climate change. In Bangladesh, large areas suffer repeated flooding. With China, India, Japan, Iran, South Korea, Indonesia and Saudi Arabia, as many as seven Asian countries can be found on the list of the world’s ten biggest emitters of carbon dioxide. So, the question as to whether we can achieve worldwide climate neutrality is mostly down to Asia.
On behalf of the German Federal Government, KfW Development Bank is working with many countries in Asia to fight poverty as well as protect the climate and the environment; this work includes greater use of renewable energy sources and the protection of biodiversity. Effective financial institutions are being promoted in order to support small and medium-sized enterprises with the creation of jobs. In countries affected by conflicts and crises, KfW is involved in conflict prevention and the preservation of peace, and also supports good governance. In 2020, KfW Development Bank committed EUR 2.9 billion to Asian countries, including EUR 1.1 billion for coronavirus emergency aid programmes with EUR 490 million going to India and EUR 550 million going to Indonesia.
