Economic growth helps reduce poverty: report
29 June 2005, WASHINGTON - Strong and sustained economic growth in developing countries would greatly help reduce poverty, a World Bank report to be released on Wednesday said.
29 June 2005
WASHINGTON - Strong and sustained economic growth in developing countries would greatly help reduce poverty, a World Bank report to be released on Wednesday said.
The report, conducted jointly with the governments of Germany, France and Britain, examined 14 countries and determined that, on average, a 1 per cent increase in the growth of a country's gross domestic product translates into a 1.7 per cent decrease in poverty.
"The power of economic growth in reducing poverty is undeniable," said Danny Leipziger, vice president of the World Bank's Poverty Reduction and Economic Development division, adding "it is important to enhance the capacity of poor people to participate in growth".
U.K. International Development Minister Gareth Thomas said sustained economic growth is an essential component in fighting poverty. Thomas expressed hope that the study would encourage leaders of industrialized countries to work closely with developing countries to encourage economic growth.
The report identifies five policy interventions that helped increase the agricultural earnings of poor households in the 1990s, such as strengthening property rights for land, creating an incentive framework that benefits all farmers, and expanding access to technology for smaller producers.
According to the study, there are also four policy options that can help enhance earnings of people not working in the agricultural sector. These include improving the investment climate, providing better education for girls and increasing access to infrastructure.
"We need growth processes which integrate the poor rather than exclude them, that is, growth processes which use the economic potentials of the poor rather than marginalize them," said Erich Stather, state secretary of the German Ministry for Economic Cooperation and Development.
The study also notes that there is no one-size-fits-all approach to boosting countries' economic growth and that programmes seeking to increase a country's gross domestic product must be tailored to its specific needs.
Subject: German news