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A Spotlight on Climate Change, Income Inequality in East Asia

Jakarta Globe, 25 May 2014 - Income inequality and climate change are pressing issues that East Asia needs to resolve, the co-chairs of the 23rd World Economic Forum on East Asia concluded on Friday.
A Spotlight on Climate Change, Income Inequality in East Asia

Philip Roesler, left, moderates a session titled 'Leveraging Growth for Equitable Progress' with the four co-chairs of the World Economic Forum on East Asia in Manila on May 23, 2014. (Photo Courtesy of the World Economic Forum)

James T. Riady, who is also chief executive of Lippo Group, said that while East Asia has a promising future in terms of its economic growth, rising income inequality is a pressing problem that needs to be addressed in the region.

Should the wealth gap continue to widen, the region’s stability and growth will be in jeopardy, he said, in the forum’s last session titled “Leveraging Growth for Equitable Progress.”

“On the one hand, we live in an exciting world [but] the issue of inclusiveness may endanger all the progress that we have made,” James said.

“The issue of inclusiveness, it is a big issue. It is going to be very difficult.

In Indonesia alone, the Gini ratio, a measure of social inequality, has risen to 0.41 in 2011 from 0.38 in 2010, according to the latest data from the Central Statistics Agency (BPS). The trend is similar in various other developing countries in the region.

“We see all sorts of indications. In terms of Gini ratio, some of the developing countries’ [Gini ratio] in the last two to three years have deteriorated. That reflects the gaps that we have: income gaps, wealth gaps … infrastructure gaps,” James said.

He added that unemployment in the region, especially among young people, is also a serious problem.

Yolanda Kakabadse, president of WWF International, said that getting young people to be more involved is key to maintaining the region’s economic viability.

“We have to view the youth not as future actors but as present actors for future problems. We need to involve young people,” she said.

In this respect, quality education and human resources development are crucial to address income inequality in East Asia, James said.

The co-chairs of the forum also called for better preparedness and resilience against natural disasters in the region, which are likely to become more frequent due the effects of climate change.

Atsutoshi Nishida, chairman of the board of Toshiba Corporation, said that climate change is a real issue that needs to be mitigated in the region.

Nishida called for businesses to have more environmental awareness and pursue “climate-smart growth” in light of the string of natural disasters that have hit East Asia in past months.

The scaleof the damage caused by Typhoon Haiyan in central Philippines six month ago has indicated the gravity of the problem of climate change in the region, he said. The typhoon killed more than 6,000 people.

Nishida urged the region to be more prepared and alert for natural disasters in the future. Sustainability and innovation are key in this respect, he said.

“Companies must successfully address the issue of sustainability for the entire world to enjoy sustainable growth. To achieve sustainable development … will remain vital.”

Takeshi Niinami, chairman of convenience store operator Lawson in Japan, also said that learning to deal with natural disasters is crucial to the region.

He said “resilience is important” in facing the growing effects of climate change.


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