Regional Environmental Technical Assistance 5771
Poverty Reduction & Environmental Management in Remote Greater
Mekong Subregion Watersheds Project (Phase I)

Introduction to Key Social Issues

Regional Report

By

John V. Dennis, Jr.

Social Anthropologist

TABLE OF CONTENTS

Abbreviations

1. Introduction

This paper presents an overview of the social issues pertaining to poverty reduction and environmental management in remote watersheds in the Greater Mekong Sub-region (GMS). It serves as an introduction to a set of six country reports that address social issues in each of the six Mekong Basin countries. All seven reports describe government policies and social conditions as they pertain to rural development in the GMS countries. Each paper also presents some draft recommendations. It is hoped that the participants in the Phase I Final Workshop on 9-10 June 1999 will have the opportunity to discuss these recommendations--initially in small groups--during the course of the workshop.

While it is unlikely that all participants in the Final Workshop will agree with the recommendations as drafted, it is hoped that they will form the basis for meaningful discussions and the framework for a set of guidelines on how ADB funding should be applied in remote upland watersheds of the GMS countries. Perhaps these can be further developed into a set of what might be called, "ADB’s Socio-environmental Guidelines for Development within Remote Watersheds of the GMS."

Gender issues are covered in separate papers written by Ms. Leena Kirjavainen.

1.1 The Need to Balance the GMS Development Process

Balanced growth that confers benefits on all sectors and classes of a society in an equitable manner is a worthy development objective. People-centered development is the main development objective of the ADB and of the other development banks. Nonetheless, it remains difficult to balance commitments to costly infrastructure projects with those that are more difficult to implement, especially in the social services-related sectors such as health and education. There is often a complicated array of NGOs and International Organizations assisting national governments in these areas.

The First Conference of representatives of the Greater Mekong Sub-region was held at ADB offices in Manila in October 1992. A Third Conference was held in March 1994 in Hanoi and "marked the transition from consultation and background studies to feasibility assessments and implementation"(ADB,1994,p.viii).

The proceedings of this Third Conference, Economic Cooperation in the Greater Mekong Subregion: Toward Implementation, contain, in the course of about 400 pages, descriptions of proposed commitments to six development sectors. Of 78 project descriptions in the report, 36 include estimated project costs and 29 of these, or 81 percent, were in the transportation sector. As shown in Table 1.1 below, 99.9 percent of the indicated budget of $12.6 billion was devoted to this sector, with an average budget of about $434 million per project. The remaining indicated budget of $12,780,000, was spread over seven projects in four other investment sectors for an average budget of $1.8 million per project.

Table 1.1 1994 Summary of Indicated Budgets for 36 proposed GMS projects.

Source: ADB, 1994.

Strong national and regional infrastructure projects are critical to enabling market-oriented economies to function efficiently and for the comparative advantages of trade to function. Nonetheless, the experience in the transition economies in the past decade has shown that regulatory frameworks, stable systems of resource tenure, accountability, transparency, and freedom of expression are all essential parts of the "checks and balances" needed to keep economic development sustainable and equitable.

Maintenance of existing forest cover within remote upland Mekong watersheds is an important development objective. The sustainability of lowland agriculture, lowland water supplies, immense biodiversity resources, and, indeed, long-standing weather patterns may all hinge on the protection of upland forest resources at or above their existing levels. As conversion of forest to agricultural land has been correlated with decreasing distance to roads in Thailand and elsewhere in the tropics (Cropper et al., February,1997;Chomitz et al.,1995), it is proposed that the timing and the amount of funding to the various development sectors be carefully coordinated in order to conserve the remaining forest resources. In other words, it is no longer acceptable development practice for the Development Banks to fund large transport and other infrastructure projects and assume that other stakeholders in the development process will adequately address social issues such as resource tenure, poverty, education, health, and human rights

1.2 Objectives of RETA 5771

The TOR of the Poverty Reduction and Environmental Management Project in Remote Watersheds of the GMS suggest that after watersheds are selected in about three of the GMS countries, a concerted effort will be made in Phase Two of the project to design investment projects that address both poverty reduction and environmental management in these watersheds. This paper provides an overview to key social trends and issues that are discussed in more detail in the country papers and which need to be addressed in Phase 2 of the project.

Five subject areas are addressed here and in the country papers:

• poverty reduction strategies
• policies relating to ethnic minorities
• health policy and demographic change
• education policy
• environment policy.

Five of the six GMS countries are referred to as "economies in transition". There is no single widely accepted approach as to how economic development in "transition economies" should be managed. The downturn in the High Performance Asian Economies (HPAEs) triggered by the devaluation of the Thai Baht in July 1997 has raised considerable interest in how best to strategize the recovery of these economies. (e.g., Jomo,1998;Krugman,1999).

The creation of trade regions with suddenly reduced barriers to trade can trigger increased pressures on agriculture and other natural resources and on vulnerable indigenous communities. New trade agreements and erosion or outright loss of traditional land tenure rights can result in the loss of the "social contract" that protected environmental sustainability at the local level. These losses can in turn result in the long-term impoverishment of vulnerable communities and in some cases decades or even generations of poverty and dependency (e.g., Navarrete et al.,1994;Broad and Cavanagh, 1995).

In the case of Mexico, the constitution was revised in 1991 to make it possible for corporations to buy roughly 100 million hectares of campesino farmlands that had been communally owned since the revolution of 1917. The North American Free Trade Agreement (NAFTA) trade agreement a few years later set up the conditions that encouraged foreign corporations to purchase these lands for corporate agricultural enterprises. As a result, a large segment of the campesino population that previously had been farm operators with good access to communal lands was now down-graded to the status of agricultural laborers (Navarrete et al.,1994).

It is critical that institutional and human capacity to implement environmental, social and resource tenure safeguards be created, field-tested, and proven to be robust and well-implemented well in advance of forceful increases in regional integration brought about for example by the implementation of regional transportation projects or the implementation of any large project that will attract workers from long distances.

Within the GMS countries, the rapid spread of the AIDS epidemic and the rapid and on-going loss of forest cover with its attendant prospects of adverse climate change suggest that the socio-environmental costs of enhanced regional integration and rapid transition to a market-driven economy could be very high for the poor and for indigenous communities in general unless institutions such as the ADB assist in promoting rigorous social safeguards.

The term "firewall" is used in this set of papers to refer to a framework for rural development that lets in beneficial forms of development while filtering out projects and changes that are likely to have adverse impacts on local communities and other local stakeholders and on the sustainability of the regional environment and climate.

2. Poverty in the GMS Countries

2.1. Growth and Equity

The economist Simon Kuznets hypothesized that as economies develop there is initially a growth-equity trade-off. As per-capita incomes rise, inequality initially rises as well. In theory, at some intermediate level of income, inequality begins to fall as incomes reach income levels characteristic of a developed country. This pattern may have occurred in the Nordic countries, which have highly progressive national income tax systems. The Gini coefficient, a measure of inequality defined in Box 2.1 below, is a low 25 for Finland, but a high 40.1 for the United States and a high 36 for Switzerland. The GMS countries may want to assume that without strongly progressive systems of income tax, inequality will become high and remain high.

Data presented in Tables 2.1 and 2.2 for the GMS countries seem to support this hypothesis. Of the six GMS countries, Thailand has the highest nominal GNP per capita at $2,800, followed by China having $860. Thailand also has the highest Gini Index of 46.2, again followed by China with an index of 41.5. Finland, with a much higher GNP per capita ($24,080) than any of the GMS countries, has slower average annual GDP growth and, with a Gini Index of 25, has less economic inequality than the four GMS countries for which Gini coefficients have been calculated. Thus, for the GMS countries, income inequality is low at low levels of income, and increases as pre capita income increases. The challenge for the GMS countries is to reverse the trend toward greater inequality as income increases; that is, to achieve development with equity.

Individual countries tend to have their own national definitions of poverty, complicating comparisons of poverty levels between countries. Purchasing power parities (PPPs) and an international definition of poverty help facilitate meaningful comparisons between countries. PPPs are used to correct the fact that when exchange rates are used to convert prices in different countries to a single currency, substantial differences in relative prices are not accounted for. PPPs measure the relative purchasing power of different currencies over equivalent goods and services. This enables more meaningful comparisons of consumption across countries. PPPs provide a consistent and meaningful approach to how the structure of consumption changes with the level of development. For example, poor income groups may spend about a third of their income on food and relatively little on health care. As wealth increases, the percentage spent on food tends to decrease and the percentage spent on health care increases.

Kuznet’s hypothesis might lead to the conclusion that increasing inequality is predetermined over a range of income levels, that it will self-correct over time, and will naturally diminish in mature market-based economies. Such a conclusion is not correct. The governments of the preponderance of market-based economies have over the last half-century progressively put in place large, over-arching regulatory systems and social safety nets. These tend to include progressive systems of taxation, social security, health insurance, unemployment benefits, pension plans, and the increasing use of zoning laws to require land and property owners to conform to environmental standards.

Nonetheless, increases in inequality have become a trend in many developed countries at the close of the 20^th century. In 1994, The Economist acknowledged that "it is no coincidence that the biggest increases in income inequalities have occurred in economies ... where free-market economic policies have been pursued most zealously" and that "it is a combination of lightly regulated labor markets and global economic forces that has done much more ... to favor the rich over the poor." Again, the challenge to the GMS countries is to make the transition to free-market economies without increasing inequality and poverty.

Of the four GMS countries for which data are available, Lao PDR has the most equal distribution of income and Thailand the least equal as measured by the Gini Index. In comparison, distribution of income was somewhat more equal in Finland than in Lao PDR. However, it should be noted that these distribution indicators are not strictly comparable between countries, because the underlying household surveys may differ in method and in the type of data collected.

2.2. Poverty: definitions and measurement

As poverty itself is a relative term, defined differently not only between countries, but often also within countries (by different ethnic groups, for example), we offer a discussion of definitions and methods used to measure it. National poverty lines are a useful means for governments and aid agencies to track and target households categorized as living below a poverty line.

International poverty lines represent an attempt to hold the real value of the poverty line constant between countries, allowing for comparison of poverty levels across countries or regions. The standards developed and used by the World Bank of US$1 a day and US$2 a day are measured in 1985 international prices and adjusted to local currency using purchasing power parity (PPP) conversion factors. PPP conversion factors are used because they take into account the local prices of goods and services that are not traded internationally. Expenditure data is considered to be a better measure of welfare than income. Thus, the World Bank only uses income data to construct poverty lines when expenditure data is not available. Information on poverty line data for selected GMS countries is presented in Table 2.3.

Poverty gap at $1 a day and Poverty gap at $2 a day are calculated as the average difference between the poverty line and actual income or consumption for all poor households, expressed as a percentage of the poverty line. This measure reflects the depth of poverty as well as its prevalence. Thus, in Table 2.3. 22.2% of the population of China was found to live below the $1 a day poverty line in 1995 and the poverty gap was calculated to be 6.9%. In other words, the average income of this group was $0.931 a day. Similarly, the average daily income of the 57.8% of the population living below the $2 a day poverty line was 0.759 * $2 or $1.518 a day.

In 1992, 23.5% of the population of Thailand lived beneath the $2 a day poverty line with an average income of 0.932 * $2 or $1.864 a day. Thus, for the four GMS countries for which poverty data was available, Thailand had the least poverty.

The data in Table 2.3 suggest that of the GMS countries, Thailand has the smallest percentage of its population living below the international poverty line. Although China reports a smaller percentage of its population living under its national poverty line, the data for the international poverty line of $1 a day indicate that Thailand has a smaller percentage order of magnitude than China living below this poverty line.

2.3. Trends in Poverty and Inequality

During the second half of the 1980s and until the float, and subsequent devaluation of the Thai Baht in July 1997, China, Lao PDR, Thailand, and Vietnam all enjoyed rapid economic growth, whereas Cambodia and Myanmar had less robust growth due to political instability. Table 2.4. provides development and poverty indicators for the six GMS countries. Government emphasis on the delivery of social services helps to explain why China, Thailand, and Vietnam have higher Human Development Index scores than the other GMS countries. According to the Human Poverty Index rank, Thailand and China score relatively well among the developing countries, Vietnam and Myanmar are in the mid-range, while Lao PDR and Cambodia are located towards the poor end of the range.

3. Poverty Reduction Strategies

3.1 Economic Growth as an Engine of Poverty Reduction

Economic growth, particularly when coupled with population planning , is an effective means of reducing the proportion of national populations living in poverty. John Maynard Keynes, in 1936, published the theory that government expenditures have multiplier effects within the national economy that increase employment and wealth creation in the private sector. At the same time, improvement in technology ensures that the productivity of labor also increases. One side effect of rapid market-driven economic growth is that the spread of incomes within the society tends to increase i.e., inequality increases. As will be discussed, other strategies are needed to limit inequality, particularly when economic growth is rapid.

In view of the regional economic crisis that began in July 1997, it is clear that all the GMS governments must have a clear understanding of what caused the crisis if robust economic growth is to be regained and maintained in future. In 1995, Paul Krugman, an economist at the Massachusetts Institute of Technology, popularized the view that the Asian economic "miracle" was not due to total factor productivity (TFP) growth but rather to intensive use of inputs, i.e. a high growth rate of capital due to the high rates of investment in Asia and a high rate of growth of labor inputs given the increased labor participation rates in the region. This view was very controversial since it implied that very little TFP growth had occurred in Asia. If true, it also suggested that the very high rates of Asian growth were not sustainable in the long run given the expected fall in the rate of growth of employment and the expected reduction of investment rates. By 1996, the Government of Singapore had launched a campaign to increase Total Factor Productivity. Investments in an educated work force and in technology are generally central to this process.

In 1997, the economic crisis in Asia, even if originally triggered by large currency depreciations, appeared to indirectly confirm Krugman's views on the weakness of the Asian economic model and the fragility of the Asian Miracle. Roubini (1999) argues that in the long-run, the Asian region may be successful in maintaining high rates of growth of output and consumption only if it will become more efficient in increasing the productivity of resources used instead of just mobilizing these resources at faster rates. Krugman’s (1999) current perspective is that the global economy is at risk of falling into a long-lasting depression.

3.2 Economic Risk and the Risk of Future Poverty

The relative soundness of fiscal policy at the national level may in the long-term have considerable impact on poverty levels within a country. In the years following the devaluation of the Thai baht in July 1997, poverty levels have increased significantly in both Thailand and Vietnam. Figure 3.1 below indicates that in 1997 Thailand had very significant international reserves per capita compared to the other GMS countries.

Figure 3.1 Gross International Reserves per Capita in 1997

Source: World Bank. 1998. 1998/99 World Development Report. World Bank, Washington, D.C.

On the other hand, it would appear from the data on external debt as a percent of GNP that as of 1996 the Vietnamese economy had more than twice the debt burden of any of the other GMS economies.

3.2 Better Health and Education as Pathways to Reduce Poverty.

Healthy, literate people are more productive than unhealthy, illiterate people are. Provision of improved health and education services in poor areas with the GMS should be a highly cost-effective approach to poverty reduction.

3.4 Progressive Income Tax, Other Transfers, and Safety Nets.

A whole array of means is available to governments to transfer wealth from wealthier sectors of society to poorer ones. The development banks provide assistance in structuring these interventions so that they do not dampen incentives to invest in the private sector. Many of these strategies are described in the country reports. The important ones are, subsidized health and education services, unemployment benefits, national pension plans, food for work, and rural credit projects including women-based rural banking.

3.5 Autonomous Areas as a Means to Protect and Build Equity in the National Development Process

Traditional resource exploitation in montane Southeast Asia and the rights of traditional communities to these resources have rarely received adequate recognition from the GMS governments. On the contrary, GMS governments, with the exception of China, have been inclined to sever the traditional bonds between upland communities and their traditional natural resource base. Relocations of minority communities from one area to another have sometimes had the effect of severing a spiritual bond between a community and forest resources. The inability to reestablish those bonds at a new location may result in rapid degradation of forest resources at the new settlement location.

The autonomous area approach as used in the Yunnan province and other regions of China appears to provide the legal basis for a dramatic break-through in watershed management in the region. The autonomous area concept would be strengthened to include ownership rights to all natural resources within the area. Using the co-management model that has been successful at Kakadu National Park in Australia (Hill and Press, 1994), autonomous area governing boards would, as these resources were exploited, enter into revenue-sharing agreements with national and other levels of government as appropriate. Residents of autonomous areas would retain veto rights over development projects except in cases involving national security interests.

In the environmental and natural resources sector, the need to enhance productivity could be achieved through a number of measures:

• striving for zero-growth rates for all populations living in upland ecosystems and reduce growth in national population at a rate compatible with maintaining adequate national social safety nets;
• maintaining or establishing autonomous areas for ethnic groups that desire to maintain traditional homeland areas and preventing the sale or loss of traditional lands to outsiders;
• using a watershed approach and adopting a co-management approach to the management of natural resources; the local partner in the co-management team could be a county, prefecture, district or province, or it could be a group of villages, a particular ethnic group living in a localized area, or a coalition of ethnic groups living in the same area. The objective of co-management is to re-establish a robust balance between natural forests in the uplands and lowland agroecosystems;
• implementing firewall safeguards in remote upland areas.

4. Ethnic Diversity and Minority Populations in the Context of Increasing GMS Integration

Ethnic diversity within the GMS countries is an immense cultural resource, but at the same time presents significant challenges to national and regional integration. The ADB predicts that the combined population of the GMS will increase by about 50% or 350 million by the year 2020. "Combined with rural/urban shifts, this will add more than 100 million to the subregion's major cities and towns" (http://www.adb.org/ Work/GMS/hrd1.asp).

The Mekong basin with its myriad of remote tributary watersheds, has, over a period of several thousand years, been an incredible incubator of cultural and linguistic diversity and of agroecosystem biodiversity. It is very difficult to place a value on these resources or to say precisely what their functions or potentials are, now and in the future. However, it is clear that language is the most precious human resource. The linguist, R.M.W. Dixon, has written,

"Each language has a different phonological, morphological, syntactic, and semantic organization from every other. …By examining the ways meanings are organized in some little-known language, the linguist may….evolve some new mode of thinking that could help to deal with problems in the modern world (Dixon,1997, p.116)…Every language encapsulates the world-view of its speakers—how they think, what they value, what they believe in, how they classify the world around them, how they order their lives. Once a language dies, a part of human culture is lost, forever(p.144).

Seen from the perspective of a minority speaker, we understand that:

Each language still spoken is fundamental to the personal, social, and—a key word in the discourse of indigenous peoples—spiritual identity of its speakers. They know that without these languages they would be less than they are, and they are engaged in the most urgent struggles to protect their linguistic heritage (Zepeda and Hill, 1991,p.135).

Yunnan province, which contains much of the headwaters of the Mekong, is the most ethnographically diverse province in China. Similarly, the headwaters of the Se San river, a Mekong tributary, lie within Kontum and Gialai, the two provinces of Vietnam that have the highest proportion of minorities. In Cambodia, the Se San flows through Ratanankiri and Stung Treng provinces, two of the most ethnographically diverse areas in that country.

In northern Thailand, both language and crop diversity flourished for centuries in the many narrow valleys. Figure 2.1 below shows the immense number of living languages in each of the GMS countries.

Figure 4.1 Number of Living Languages in Mekong Countries.

This immense diversity of language is by no means spread evenly across the landscape or through the national populations. As shown in Table 2.1 below, ethnic minorities make up about 10 percent of the population of the GMS countries, ranging from about 46% in Lao PDR to only 1.3% in Thailand.

It is also known that many of these indigenous languages are dying or endangered. Languages spoken by language groups that number less than 10,000 speakers are often considered by linguists to be "highly endangered." Probably 75 percent or more of the languages spoken in the GMS today will no longer be spoken in the year 2100. We do not fully understand what is required for a language to survive. Table 2.2 below lists some of the causes of language loss.

On the Nakai Plateau in central Lao PDR, it is reported that certain households of hunter gatherers died within a year of being invited to settle at an existing village belonging to another ethnic group (Chamberlin et al.,1996). there are some languages with relatively few speakers that may soon be extinct.

Stalin, who after all was a Georgian nationalist who began his career as a linguist, understood that an effective means of weakening an ethnic group was to move them to an area where another language was dominant. Many of the six GMS governments maintain to this day policies of moving ethnic minorities out of their present locations and into new locations for a variety of reasons. For many minority groups, language loss may hasten a loss of community solidarity and usher in a long-term mentality of dependency.

Minority communities by definition live somewhere along the continuum between full integration and autonomy within the nation state. Sino-Thai business families in Bangkok epitomize the advantages of integration. Forming the dominant business group within a $170 billion economy, many are immensely wealthy. Although Chinese-language schools were made illegal in Thailand in the 1950s, Sino-Thais have excelled within the Thai education system and intermarriage with ethnic Thais is the norm. Many Sino-Thais do not speak Chinese and most are indistinguishable from ethnic Thais except for being somewhat lighter skinned and having longer surnames.

4.1. Autonomous Areas

At the autonomy end of the spectrum, the project’s ethnolinguist has described a De-Ang minority community residing within a De-Ang autonomous county in Luxi Prefecture of Yunnan Province as presenting:

In this example in Yunnan, it is not clear whether the "autonomous county" that the De-Ang lived in had in some way acted as an impediment to the entry of economic development or whether the De-Ang were by nature less entrepreneurial and less inclined to become involved within the larger market economy than their Dai neighbors.

Despite the negative cast to the De-Ang example cited above, it is important to understand that the Government of China has used the "autonomous areas" concept as a fundamental means to promote the welfare of ethnic minorities and their representation within the political process. Autonomous areas constitute about 65% of China. By preserving the concept of "ethnic homelands," many otherwise vulnerable ethnic minorities have been able to maintain their language, culture, and way of life.

It would be appropriate for Phase II researchers to determine whether the ADB could promote "autonomous areas" as an effective means of targeting affirmative action types of lending and economic development to the poorer sectors of rural society within the GMS and to prevent urban elites from gaining control of key resources within these areas. Our perception was that the autonomous area concept has great utility, but that it has not yet been well incorporated into poverty reduction strategies in the GMS.

4.2 Social Solidarity and Conservation of Indigenous Languages

Social solidarity is a measure of the cohesiveness of a community and the extent of its internal control, its ability to make and implement decisions about its affairs. Robust communities with strong solidarity are more capable at managing their resources and are less likely to fall into poverty and dependency. Having a unique mother tongue and culture, strong resource tenure, and long-term residence in a particular area are three attributes that help to create community solidarity. It has long been known to linguists and others that effective ways of reducing community solidarity are a) to relocate the community to another area unfamiliar to it, b) to prohibit the use of the community’s mother tongue or to prohibit its use in the school system.

An invaluable component of the national heritage of each of the GMS countries is the diversity of language and culture found in each. Together with the landscape, this is what makes each country unique. Roughly half of the languages enumerated in Figure 2.1 in each of the countries are at great risk of being lost within the next 25-50 years.

One of the most effective strategies of poverty reduction in remote watersheds in the GMS would be to strengthen community solidarity. Experience with small language groups has shown that establishing initial literacy in the mother tongue is an effective step for establishing literacy in the national language and indeed has many advantages to requiring that minority children only gain literacy in the national language when at the primary school level it is a language with which they have little or no familiarity.

5. Demographics and Delivery of Health Services

5.1 Differing rates of demographic transition in the GMS

Demographic transition theory (Notestein,1953; Davis,1963) basically argues that with improvements in living standards, a pattern occurs whereby mortality declines first, to be followed, after a lag period, by a decline in fertility. Urbanization, education, and rising expectations all influence the perception that smaller family sizes are better. Innovative family planning programs in northern Thailand in the 1970s demonstrated that, in fact, minority women in upland communities were eager to adopt smaller family size due to perceived land scarcity and the burden of raising many children even without the improvements in living standards. Greater birth spacing itself was perceived to be an improvement in living standards (Pardthaisong,1978). While it remained important to deliver family planning awareness and services in the context of good primary health care, there was no longer theoretical justification for Ministries of Health to wait for improvements in living standards before implementing broad-based programs delivering family planning awareness and services.

Following World War II, population growth accelerated globally due to declines in mortality enabled by a post-war generation of antibiotics and vaccines. During the 1950s and 1960s, governments began to experience difficulties providing adequate health, education, and other services to the rapidly growing number of young people. Thailand announced a population policy in 1970 and China somewhat later. The governments of the other four GMS countries have not had population policies that produced similarly rapid reductions in population growth.

A review of demographic trends in the region (Hull, 1996) indicates that transition from high to lower rates of fertility and mortality in the Asian region has been slower than was projected in the late 1980s. China, Hong Kong, Singapore, Thailand and Republic of Korea have witnessed dramatic declines in fertility. Indonesia Philippines, Mongolia, and Vietnam have experienced slower declines. Furthermore, there has been a virtual lack of decline in Cambodia and Lao PDR. See Table 2.1 below.

Figure 2.1 below is based on data from the 1998/99 World Development Report and shows comparisons within somewhat different and narrower time periods. This figure indicates that there may be some slight increase in population growth in Lao PDR between the two time periods. On the other hand, it suggests that population growth rates have remained steady in Vietnam within the 1980-1997 time period rather than dropping significantly as suggested in Table 2.1 above. And it shows Thailand still a considerable distance from the 0.7 average growth rate predicted in Table 2.1 above.

Figure 5.1 Changes in Population Growth Rates within GMS countries.

Source: World Bank. 1998. 1998/99 World Development Report. Washington, DC; Table 3, Population and Labor Force
*Myanmar is not included in the 1998/99 World Development Report.

The prospects and nature of economic development in remote upland watersheds of GMS countries need to be understood within the context of the demographics of each country and of the larger region as a whole. Migration has been an effective means of tying rural hinterlands to urban areas and thus an effective means of poverty reduction. But in many cases, the intense concentration of population within primate cities has lead to the generation of urban ills such as congestion of urban traffic, slums and pollution of air and water.

In China, "informal urbanization" or "urbanization from below" has been occurring within the countryside and is reducing the kinds of migration that tends to create primate cities. It is estimated that China has a "floating population" of about 80 million people, that is, temporary migrants to the cities who are not official residents.

In contrast to this movement of temporary migrants to the cities, there has been the in situ transformation of formerly agricultural populations into quasi-urban ones. This trend has been driven largely by the development of township and village enterprises (TVEs), a term would be better translated as "rural enterprises" because it does not include enterprises in towns. One study in Southeast China suggests that the creation of TVEs has become much more significant in terms of creating non-farm employment opportunities than has migration to cities. No negative valuation seems to have yet been put on "reduction of farmland caused by in situ urbanization." Nonetheless, this emerging Chinese phenomenon merits study for its applicability within the other GMS countries.

Necessary conditions for such a phenomenon to take place may include a) high rural literacy rates, b) some tradition of entrepreneurial activity within rural society, c) good connectivity between rural areas and urban markets, and d) good access to credit by would-be entrepreneurs. Within many of the other GMS countries, the Hmong minority in Thailand are an example of an upland community that has a tradition of mobility and entrepreneurial activity and one with moderate to good literacy among men. Upland communities without a history of mobility and trading or literacy and upland areas lacking good road connectivity to the lowlands would likely require intensive targeting of development investments before in situ urbanization could be a desirable and viable development option.

Urbanization of a population occurs by migration, natural increase, and reclassification of rural areas to urban. Concentration of population in urban areas will continue to be an integral part of what is expected to be a sustainable economic development process. Table 2.2 below shows levels of urbanization within the GMS countries in 1994 and the projected levels for 2005 and 2010. Urbanization in China is projected to change from 29.4% in 1994 to 43.0% in 2010. About a third of the Lao populated is projected to live in cities by 2010 compared to 27.4% in both Thailand and Vietnam. This seems like an odd outcome in so far as Laos currently has a far lower population density and has very little in terms of an industrial base within its cities compared to Thailand and Vietnam. Perhaps the Lao urbanization is expected to be driven by a larger urban-rural gap in capacity to generate employment and wealth.

Vietnam’s growth in urbanization is expected to be similar to that of Thailand, but with natural increase of population playing a larger role.

The governments of the remaining three GMS countries have been unable or unwilling to reign in exceptionally high fertility rates. When combined with medium to poor economic growth rates, it is expected that rapid urbanization in these three countries is likely to lead to a degradation of the quality of urban life and result in what would be unsustainable growth.

Seasonal rural-to-urban migration is an important means in both China and Thailand for rural households to diversify their risk by giving them access to another economic niche. In this way, seasonal migration helps to alleviate rural poverty and authorities should keep this in mind before implementing policies to restrict population mobility. Short-term mobility in the form of seasonal migration has been a successful adaptive strategy in Thailand. This phenomenon is perhaps best epitomized by men from Northeast Thailand who work as cab drivers or construction workers in the cities, but to their villages to assist during the rice planting and harvesting seasons. Once Thailand’s economy recovers it is likely to be transformed from being a net labor exporter to becoming a net labor importer. There are already about 1 million immigrant workers in Thailand, mostly from Lao PDR and Myanmar.

Socioeconomic evidence suggests that governments that have implemented well-funded family planning programs have been able to dramatically improve the quality of life of their citizens. Governments that have retained the "peasant mentality" that sees rapid population growth as positive, have increasingly found they lacked the capacity to deliver an improved standard of living to their rural populations. In this respect, it should be noted that China’s "liberal" policy of allowing ethnic minorities to have more than one child per family may be having the unintended effect of creating population pressure on the rural natural resource base.

5.2 Health Care in the GMS Countries

Health standards vary significantly within the GMS and greater integration within the region holds the promise of an overall raising of living standards. At the same time, freer movement of people within the region--one of the objectives of the GMS development strategy recommended by the ADB--will almost certainly raise the rate of transmission of certain pernicious diseases such as AIDS. And greater economic integration raises the possibility of economic volatility spreading through the region. If remote watersheds do not participate directly in the benefits of economic integration, communities may not be able to afford the health services that new or upgraded transport corridors link them to.

Research has shown that roughly a country’s per capita income, the distribution of income, the extent of women’s education, the level of ethnic fragmentation, and the predominant religion can explain 95 percent of cross-national variation in child mortality. Non-Muslim countries have on average lower infant mortality rates than Muslim countries. Surprisingly, there is not a strong correlation between the amount of public spending on health and national infant mortality rates (Filmer and Pritchett,1997). The authors suggest, among other things, that public monies are often spent on "expensive, but ineffective curative services." Non-health characteristics of societies with particularly good health status at relatively low income levels such as China, Costa Rica, Sri Lanka, and Kerala State in India are related more to high education levels of women, good nutrition, and more equal income distribution. Myanmar and China were among the highest-scoring developing countries when child mortality rates were regressed on income, whereas Lao PDR was among the poorest scoring countries (Filmer and Pritchett, 1997, pp.16-17).

However, health gains have recently eroded in China due to changes in government financing of the health sector, the shift to a more market-oriented economy, and a shift of focus toward more non-communicable diseases and injuries, the prevention of which has not been a traditional part of China’s public health programs (Hossain,1997).

As can be seen in Table 2.3 below, the government of China spends more than the other GMS countries on health (as a percent of GDP) and has the lowest infant mortality rate and the best access to clean water of the six countries. Vietnam spends about half as much on its health sector as a percentage of GDP and yet has a lower maternal mortality rate. On the other hand, the two countries within the group which spend the least public funds on health care, Myanmar and Cambodia, have, with Lao PDR, the highest infant and maternal mortality rates and the lowest access to clean water.

Figure 5.2 Health Expenditures as % of GDP

Source: World Bank. 1997. 1997 World Development Indicators. Washington, DC. Pp.74-76.

Education effect on health status. A study of three Asian-Pacific countries found that under-five mortality rates dropped from 119 to 70 to 39 per 1000 live births as mother’s education went from no schooling to primary education to secondary education respectively. Those are changes of 41 and 44 percent, respectively (Pritchett and Filmer, 1997).