Although Asia has made remarkable achievements in economic terms and in fighting poverty, it still faces a major challenge posed by the problem of poverty, the Asian Development Bank (ADB) said Thursday.

About 1.9 billion people, or 60 percent of developing Asia's population, still live on an average of less than US$2 a day, according to ADB report "Poverty in Asia: Measurement, Estimates, and Prospects."

If the one dollar-a-day poverty line is used, the number of people living in extreme poverty totals about 690 million, or 21.5 percent of developing Asia's population, said the report contained as a special chapter in the ADB's Key Indicators 2004 -- annual statistical data book on economic, financial and social indicators.

In Indonesia, for example, 7.5 percent of the population lives on less than one dollar a day poverty line but 52 percent survive with less than two dollars a day, it added.

The report tracks the incidence of poverty throughout the region and takes a hard look at the way in which governments and institutions identify who is impoverished.

"Clearly, fighting poverty is developing Asia's most important challenge," said ADB Chief Economist Ifzal Ali. "The measurement of poverty is a vital tool in helping to address poverty issues."

According to the report, 93 percent of the extremely poor in developing Asia are in India (357 million), the People's Republic of China (203 million), and other South Asian countries (77 million).

Despite the large number of poor, the region has made considerable progress in the fight against poverty. At the aggregate level, the incidence of extreme poverty declined from 34.3 percent to 21.5 percent and the number in extreme poverty dropped by 233 million between 1990 and 2002. However, this success masks substantial differences among countries.

China represented almost 174 million, or 75 percent, of the decline of 233 million in extreme poverty. Southeast Asia witnessed a fall of 48 million poor between 1990 and 2002. Unfortunately, the performance of South Asia in terms of poverty reduction was weaker, the report concludes, with the number of people living on less than one dollar a day reduced by only 14 million.

The driver of rapid poverty reduction in Asia has been economic growth and that policies should be geared in that direction to decrease further the number of poor people in the region, the report said. But the growth should be equitable among the various sectors and geographical areas of a country.

In South Asia, neglect of public investments in physical and social infrastructure, combined with policy and institutional rigidities in agriculture, has limited growth of the rural economy. Such neglect has perpetuated age-old inequities in the distribution of access to land, credit, and social services. The end result has been that even where aggregate economic growth has been reasonable, few opportunities are created for the rural poor.

The insights from the poverty scenarios and Asia's diverse experience with poverty reduction suggest that policy makers must focus on generating high rates of sustainable growth while ensuring that at a minimum the distribution of income does not worsen to any significant degree, the report said.

As the scenarios suggest, the fight against poverty in Asia will be protracted, it added.

(Xinhua News Agency August 27, 2004)