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by Bernice Han

SINGAPORE, Sept 16 (AFP) - Asia's unrelenting industrialisation march in the 1990s was a big catalyst in reducing poverty in the region, the Asian Development Bank (ADB) says.

In particular, countries that have pursued "prudent" pro-market economic policies enjoyed the biggest drop in proverty," the Manila-based bank said in a book on the region's key indicators released last week in Singapore.

It singled out China as an example. Beijing's drive to open up the world's most populous nation to the global economy has seen the percentage of poor people fall from six percent in 1996 to 4.6 percent in 1998.

In the 1990s alone, more than 100 million Chinese were lifted out of poverty, said the ADB, which uses poverty cut-off levels set by the different Asian countries themselves.

"Generally, improvements have been sharpest in countries that followed market friendly policies, thereby taking advantage of the impact of globalisation," said the ADB.

"Countries that have followed prudent policies have been rewarded with faster growth, rising income levels, and greater success in reducing poverty."

In contrast, the largest number of poor are still found in South Asia where the adoption of pro-market policies lagged behind that of China and the Newly Industrialised Economies (NIEs) of Hong Kong, South Korea, Singapore and Taiwan.

"These countries, the NIEs and the PRC (China) in particular, benefited from the opening up of markets and increased trade and private capital flows, which contributed to a restructuring of their economies," the ADB said.

"Countries that did not take the export-led path to development, primarily in South Asia, have recorded lower growth, experienced limited progress in poverty reduction, and only modest improvements in living standards."

The number of poor people in South Asia increased from 474 million to 522 million in the period between 1990 and 1998.

The contrasting pictures of the poverty levels in the region showed that sustained economic growth, which can only be achieved through market-friendly policies, was the key to higher standards of living, the ADB said.

"Growth is critical to achieving poverty reduction. Sound macroeconomic policies do matter," it said.

"Change has been greatest in countries that have followed sound policies, adopted export-led development strategy, and attracted foreign direct investment."

The ADB said China, along with the NIEs and Southeast Asian "tiger" economies -- Malaysia, Indonesia, the Philippines and Thailand -- fell into this category.

"The success story of the countries of Southeast Asia is in terms of high growth and remarkable progress in poverty reduction," said the ADB.

"It is built upon an opening up of the external sector containing a cautionary lesson about the need for effective policies to mitigate against the dangers posed by volatile capital flows."

Still, there were disruptions to progress in reducing poverty because of the 1997-98 crisis, the ADB said.

Indonesia and Thailand, two of the industrialising Southeast Asian countries, were among those most badly affected.

More than one million Thais were pushed into poverty during the crisis. Before the crisis erupted, the rate of poverty declined from 32.6 percent in 1988 to 11.4 percent in 1996 but surged to 12.9 percent two years later.

Indonesia, still struggling to recover completely from the regional crisis, saw its poverty level creep up from 17.6 percent before 1997 to 23.4 percent in February 1999.

While less Asians now live in poverty compared with a decade ago, the ADB said the region still had plenty of catching up to do in other areas.

It said one in five Asian adults were unable to read or write and less than one in 10 had access to a newspaper. Malnutrition among children was still prevalent, the ADB added.  

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