This report investigates social inclusiveness in Asia's middle-income countries and explores some of the challenges in moving the development policy agenda from an exclusive poverty focus to an ‘inclusive growth’ strategy. The report was produced for the Asian Development Bank (ADB) as an overview input to its regional workshop on 'Social inclusiveness in Asia’s emerging middle income countries'. 

Over the past 20 years, Asia’s rapid economic growth has contributed to a substantial increase in average per capita incomes. As a consequence, we have witnessed the emergence and expansion of Asia’s ‘middle class’ – broadly defined as those earning between $2 and $20 per day – which will play an important role in the rebalancing of the world economy and will be a vital source of domestic growth. Nonetheless, a host of important challenges remain.

The benefits from economic growth have not been equitably distributed, therefore exacerbating existing inequalities and possibly jeopardising social cohesion and political stability. The rising challenges of population growth, rapid urbanisation and climate change are also likely to contribute to economic, social and environmental tensions. A more socially inclusive growth pattern is required in order to simultaneously achieve fundamental economic and social development goals.

An inclusive growth agenda will require a deliberate and direct focus on generating widespread productive employment, rather than assuming that economic growth will automatically deliver more and better jobs. ‘Job-rich’ growth is a fundamental precondition to reducing inequality and poverty. In general, this report argues that macroeconomic and structural policies play an essential role in promoting an inclusive growth pattern, while social policies and social protection play a vital supportive role.