Asia and Latin America have made great strides in economic development during the last 30 to 40 years, thanks to bold and innovative reforms. Since 1970, Asia’s economy has grown faster than any other region, with growth rates averaging 8 person per year and rising per capital incomes. Latin America and the Caribbean also experienced strong growth, with the percentage of people living below the poverty line dropping from 7.4 percent in 1981 to 5 percent in 2005.
This progress came as a result of reforms and strategic policies. LAC countries implemented reforms including trade, financial and capital account liberalization which, with economic openness and financial inflows, brought growth. Asian growth emerged from macroeconomic stability, trade-friendly economies, and harnessing the dynamism of the private sector.
In both cases, fiscal, trade, regulatory and financial-sector reforms made this growth possible.
Despite their progress, however, LAC and Asia struggle with uneven economic growth, high poverty and malnutrition and lagging agricultural growth. In LAC, more than 60 perceont of the poor live in rural areas, where slow growth and inequality, poor public services and vulnerability to natural and economic shocks can result in severe poverty traps. In Asia, poverty and malnutrition remain high. In China, more than 106 million people live below the poverty line, often without access to clean water, arable land or adequate health and education services.
There is a tremendous opportunity for mutual learning between these two regions that could accelerate broad-based economic growth and catalyze further reductions in poverty and hunger in both regions.