Exclusion on the basis of race, religion, and ethnicity exists in many nations under diverse social, economic, and political systems. Such exclusion is a problem in several countries in Asia. And while many Asian countries—such as China, India, Japan, Malaysia, Nepal, and Pakistan— have developed equal opportunity policies to overcome economic discrimination, the nature of both market and nonmarket discrimination is still not well-understood, and neither are its direct and indirect effects on poverty. The limited number of studies on exclusion in Asia has affected the development of appropriate policies to overcome discrimination and its impact on poverty.
This brief presents the argument that market- and nonmarket-related forms of discrimination directly affect poverty but also exacerbate it indirectly by reducing growth. The brief highlights the need for socially inclusive policies; offers an analysis of the consequences of discrimination through the historical example of scheduled castes in India; and indicates potential policy options to redress exclusion and its effects.