Poverty declined rapidly in the 1990s, especially in China. But growth in China's poorer and more rural western provinces was much slower than in the more industrialized east. This divergence reflects slow growth in rural incomes related to declining prices for agricultural products and reduced opportunities for off farm employment. This widening of income inequality slowed the rate of poverty reduction for the country as a whole.

Elsewhere in the region, poverty increased in the aftermath of the 1997–98 financial crisis. In Indonesia, the government responded to the crisis by strengthening safety nets, which helped cushion the impact of the crisis. But the incidence of poverty still increased substantially, doubling from its pre-crisis level. Since early 1999, there have been indications that poverty has declined significantly as rice prices have fallen and real wages have started to recover.