Berlin Wall long gone, but in Asia a barrier still divides

From celebrations here in united Germany marking the 25th anniversary of the Berlin Wall’s fall to those in the United States over midterm elections delivering a more evenly divided Washington, what a week it has been for division, past and present. 

And, indeed, perhaps this country that reunited against seemingly insurmountable odds might offer hope for a politically divided Washington or a Southeast Asia increasingly worried, if not split, over territorial issues as well as environmental and migration challenges. 

Just a few days after his party lost control of the US Senate as a Republican wave swept aside incumbent Democrats, President Barack Obama is now in Asia for summit meetings in China, Australia and Myanmar. Unequal economic growth and sputtering efforts to strengthen cross-Pacific trade are all on the agenda. 

The United States could well face two years of political gridlock under the watch of a weakened Democratic president and a Congress now under the control of Republican leadership. What that might mean for the so-called US pivot, or rebalance, to Asia is still to be determined.  

A divided Washington also might not bode well for those seeking greater China-US cooperation and strengthened international engagement by the US, as attention in that country shifts to key domestic issues of concern to the American voting public. 

The US electorate’s support for a hike in the minimum wage, however, also suggests an opportunity for America, Asia and large parts or the world, including Asean, to come together over one issue – policy action to address the growing divide between the rich and the poor.  

 

Rising concern over inequality

According to a recent Pew Research Centre Global Attitudes Survey, despite long-term optimism in many nations, widespread concerns about inequality continue. Majorities in all 44 nations polled, including China, Japan, South Korea and Thailand in Asia, as well as Germany and the United States, say the gap between rich and poor is a big problem facing their country. 

Often removed from the reality of persistent poverty, political leaders – whether in Berlin, Beijing or Washington – should take such data to heart and come together on practical policy approaches. As for which Asian nation or region is the most “unequal” when it comes to the Gini index, a measure of income inequality, the answers can be surprising. Hong Kong tops the list for having the most unequal distribution of family income in Asia – perhaps no small factor in the city’s ongoing unrest. This special administrative region of China ranks 12th “most unequal” out of some 141 places.

Papua New Guinea (17), Sri Lanka (22) and China (27) are deemed the next most unequal places in Asia and the Pacific. The United States ranks 41st. The most equal place in the world when it comes to distribution of average family income is Sweden. 

One need not contrast the extreme wealth of America’s and Asia’s richest families with those of its poorest – or go back to a divided Berlin of some 25 years ago, before the fall of the Wall – to understand that a divide exists between the haves and the have nots, and between those with connections, and those with none at all.

 

Two-thirds of the world’s poor

Asia and the Pacific remain home to two-thirds of the world’s poor. An estimated 1.6 billion people still struggle on less than $2 a day in the region, according to the Asian Development Bank. Approximately 700 million live on less than $1 a day.

Two billion people in the region lack access to improved sanitation, 850 million lack access to safe drinking water and one child in 20 dies before reaching the age of five. Ethnic and religious minorities and indigenous peoples are often marginalised and excluded from Asia’s continuing growth. 

That too is the unequal fate of all too many people in the Asia of today. Certainly there is more to a nation, or a region or a market than its Gini coefficient. China, this year’s Apec summit host, is justifiably proud in pointing to GDP figures and showcase infrastructure projects, even as its own growth rate has slowed. If poverty is reduced overall, some leaders note, perhaps widening inequality can be justified.

Indeed, Asia as a whole has enjoyed tremendous growth these past decades and has much to be proud of. Some of this was on show at Apec. The world should welcome Asia’s rise, including China’s success in lifting hundreds of millions out of poverty. But so too on show were the consequences of growth, often unequal, as Beijing also took steps to remove cars and close factories so as to reduce the pollution that plagues China’s capital city. Underscoring Asia’s unequal rise, Myanmar, this year’s venue for the East Asia summit, is a showcase for an economy gone wrong. 

Perhaps more important than official Gini rankings are trends and attitudes as to whether or not things are unequal or getting better, and whether everyday individuals have the opportunity to succeed and to get ahead. The “genie of inequality” in the United States and Asia has long been out of the bottle. Now, business, government and civil society, and all citizens – regardless of the state of a nation’s democracy – should also think through what matters most about inequality.

In doing so, they may well find that whether driven by unequal access to education, electricity, water and sanitation, or other public services, inequality of opportunity is too often at the root of an inequality of results. Last week, a united Germany celebrated the fall of the Berlin Wall, and many will marvel at the transformation of the one-time East Germany. Others may well focus on the persistent divide between the haves and the have nots.

Whether once separated by physical walls or split by existing political ones, today’s leaders in Asia, the US and Europe – including newly elected members of the US Congress – should also think about how much has been and can be accomplished when barriers come down, and engagement flourishes. The Asean Economic Community is a step in that direction. 

At commemorative ceremonies, German Chancellor Angela Merkel said the fall of the Berlin Wall “showed that we have the power to shape our destiny and make things better”. Powerful words – and leaders from Washington to Beijing, Yangon to Sydney, and all points in between should take them to heart. 

 

Curtis S Chin served as US Ambassador to the Asian Development Bank (2007-2010).  He is managing director of advisory firm RiverPeak Group, LLC. Follow Curtis on Twitter at @CurtisSChin