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Saturday, 23 May 2015 / Published in academic sample papers, Economic Papers, Essay Writing Help, Free Essays Online, General Essays

Free Essay: An Outlook on the Effects of Income Inequality in Asia

Free Essay: Effects of Income Inequality in Asia

What is income inequality?

Income inequality is the disparity or gap between the rich and the poor. It is usually measured by the Gini Coefficient index. This index ranges between 0 and 1. Where the Gini Coefficient is 0 the income levels between the poor and the rich is equal. This means that both the rich and the poor earn roughly the same amount of money. On the other hand, a Gini Coefficient of above 0 and closer to 1 shows higher disparities between the rich and the poor. A coefficient of 1 in this case depicts the highest level of income inequality.

Income inequality is a very important measure in showing the human conditions of different countries because it impacts on economic and developmental issues of every country. In most cases, development banks and the World Bank often take time research on the level of income inequalities in different countries.

What is the level of income inequality in Asia?

Asia has experienced high rates of economic growth in the past decade. In fact, Asian countries such as India Singapore and China have become economic giants and are now competing with the developed countries in international markets. Despite this tremendous performance in economic growth, income inequality has gone up and there are very high levels of disparities between the rich and the poor of Asia.

The Gini coefficient of China for instance has risen dramatically from around 0.36 during the 1990s to an average of 0.46 in 2000s. In fact, the Asian Development Bank Reports show that 20% of the richest in China now earn 9 times more than 20% of the poorest Chinese citizens. Countries like Nepal, Cambodia, India, Indonesia, Malaysia, Thailand and majority of Asian countries have also experienced a rise in the levels of income inequality. Only Vietnam and the Philippines have experienced lower income inequality while in countries like Bangladesh, there has been less change in terms of income inequality.

Effects of Income Inequality in AsiaSocial effects of income inequality in Asia

Income inequality in Asia has had a major impact on the access and distribution of social amenities to the citizenry of Asian countries. For instance access to proper health care and basic necessities such as water, food and shelter has been a major hurdle for the poor. The rich on the other hand have full access to such necessities.

In addition to this, the gap between the poor and the rich has also impacted on education because most poor people have little or no access to good education in Asian countries. This has largely perpetuated the vicious cycle of income inequality with majority of those with good income being well educated and skilled.

Poverty levels have also risen due to the unequal distribution of resources and income. This has led to unrests in countries like Thailand and Nepal where the citizens have demonstrated against the huge gaps between the rich and the poor and accused governments of favoring the rich.

Economic effects of income inequality in Asia

The biggest economic impact of income inequality is the ris3e of unemployment. Since most white collar jobs are the better paying, the poor, uneducated and unskilled laborers can hardly compete with the rich who have good education and skills. The fact that these poor form the majority of the population makes it difficult for any quick interventions to be implemented.

Additionally, the disparities in income distribution have led to neglect of important industries such as agricultural industry. Majority of the populace has migrated to the urban centers in search of work in factories hence building the manufacturing industry at the expense of rural based agricultural industries.

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References

http://www.ft.com/cms/s/0/e8bca4ec-bf29-11e3-a4af-00144feabdc0.html#axzz385Y9Ovs9

http://inequalitywatch.eu/spip.php?article121

http://www.economist.com/node/9616888

http://blog.mpettis.com/2014/03/economic-consequences-of-income-inequality/

http://en.wikipedia.org/wiki/Economic_inequality

 

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