Economic Growth and Poverty Reduction
1. Introduction The issue of whether or not growth in the economy leads to reduction in poverty is a matter of major contention today. The neo-liberal view to this question is that growth is good for the less fortunate, and that poverty can be alleviated through economic growth. In this article I argue that unless the poor are able to participate in the economic system and the obstacles that prevent them from participating are removed and removed, growth by itself will not help reduce poverty. The state also has the major role of making those who are poor benefit from economic growth by adopting policies that are pro-poor. In the following paragraphs I'll define what is pro-poor growth and expose the constraints to pro-poor growth as well as what we can do to make growth benefit the poor. 2. Definition of concept: pro-poor growth Based on Ravillion and Datt (1991:19) Pro-poor growth can be described as growth that includes and is beneficial to the most vulnerable'. In other words, pro-poor growth requires the maximum participation of marginalized groups across every sector. Ravallion and Datt further argue that pro-poor development is among other things, characterized by what they refer to as 'deliberate' transfers' to the most disadvantaged who are not able to climb out of poverty. The basic argument they're advancing can be summed up as the idea that poor people require intervention or assistance in order for them to benefit from growth. This means that pro-poor growth is an intentional effort to make the poor benefit from growth rather than leaving the poor in the hands of the invisible market. It's about setting an enabling environment in which the poor can have the opportunity to be involved in the economy. According to Kydd and colleagues (2001:10) Pro-growth is possible in the following circumstances: Productivity or price increases in tradeable products with a large average shares in spending of the poor. The productivity and price rise in tradable products with labor inputs that are high for those who are poor. Technology advancements or lower barriers to entry allow the poor to engage in non-tradables that they could not previously engage in or The gains in the huge amounts of non-poor people, which lead to expanded needs for services or goods, produced by the poor as a result of the upstream or spending linkages. It is important to note that not all growth is good for the poor. Here are a few characteristics of growth that aren't favorable to the poor: for more detail please visit:- get video tool sac en belgique London Exhibition Displays Disparities in wealth distribution Rural poverty is increasing Development that isn't focusing on agriculture despite the crucial role it plays in alleviating poverty Lack of investment in health and education, which play an essential role in the fight against poverty Inability to address inequalities and the lack of programs focused on meeting the needs of the less fortunate ( As Acocella (1998:162) states, it is critical to realize that growth may not always mean human growth. Growth could occur without substantial impact on the human development particularly with regards to the most disadvantaged. Acocella adds that true growth or development occurs when there is improvement in the health of individuals. Growth that does nothing to lead to improvement in the welfare of people cannot be said to be developmental in nature. True growth such as Ferro and al (2002:4) observe, should lead to human development, and this requires empowering the poor to contribute to and benefit from this growth'. It is evident that pro-poor growth does not happen without the application of policies that will be instrumental in helping to facilitate its implementation. There are polices and practices that may hinder growth for the poor from occurring. I'll look at some of them in the following section. 3. Pro-poor growth is not always easy. In order for pro-poor growth to take place within any community, it's essential to ensure that all the barriers that prevent people from achieving their goals are removed. Inability or unwillingness to tackle these obstacles could hinder the growth of poor people and may eventually hinder any strategy to reduce poverty from effectively tackling the issue of poverty. Here are some of the restrictions that could adversely impact development that is pro-poor: 3.1 Inequality and the inability to access market It is difficult to carry out policy that is pro-poor when a country is characterized by inequality. Stewart (1995:209) claims that it is difficult to develop pro-poor policies in societies that are not economically stable. He cites an example of inequality-based societies like Ghana, Mexico and Philippines and argues that growth hasn't had any impact on the poor. They are contrasted with Indonesia that has the more equal structure to start with and a more pro-poor model of growth'. Other examples given are East Asian societies, which due to their successful methods for dealing with inequality have been able to decrease the level of poverty significantly. This implies that there is a relationship between inequality and poverty. May (2002:2) further demonstrates the inequality policies enacted by the apartheid regime in South Africa were not good for reducing poverty as they denied certain groups the opportunity to participate in the economy that the state. Inequality was a major cause to the loss of assets like land and livestock as well as the denial of opportunities to build these assets by limiting access to markets, infrastructure, and education. The issue with inequality is that it can result in social exclusion in which certain groups are denied opportunities or benefits. Exclusion of the less fortunate from having a meaningful role in the market can adversely impact their wellbeing. In an environment where inequality is low it is likely that the poor will to enjoy a greater share of the rewards of expansion than in the economy that is marked by a high level of inequality. According to Ravallion and Datt (1997:7) indicate inequality in the ownership of physical and human assets are likely to influence the chances of people who are poor to participate in development'. Policies that are pro-poor ensure that the poor have access to infrastructure and markets. It is obvious that in situations where there is no equality between the various socio-economic classes the reliance on market forces and the invisibility of Adam Smith to meet basic needs is merely dreaming. 3.2 Fiscal constraints Governments, especially in the developing countries are finding it hard to pursue pro-poor growth policies and approaches for poverty reduction due to budgetary constraints. Structural adjustment programs can in many cases make matters more difficult. Governments have to face the problem of having to cut back on spending on social services which are meant to help the less fortunate. This means less money is spent on important services like education, health and other fundamental services. Reduced government spending directly affect the poor (Howard 2001: 57). It is nevertheless important to note that the state is confronted with global issues and obstacles in its effort to implement policies that are effective in reducing poverty. There is worldwide pressure for the state to take the role of less direct in the world economy. 3.3 Reducing the role of the state The liberalization of markets which has to do with globalization, is among other things that call for the elimination of the state as well as the elimination of restrictions on prices and on quantities transferred and stored. The author Howard (2001:57) accurately notes that the liberalization of financial markets raises inequality and poverty. In the context of globalization, governments are forced to liberalize their markets. However, the critical issue is whether liberalization of markets benefit the poor. There are many opinions about this. Some people see globalization as beneficial to the less fortunate, particularly with regard to opportunities it offers in terms of trade and new markets. On the other hand there are those who see globalization as detrimental. According to Levinson (2001:11) illustrates that globalization benefits those who are poor in some nations while harming those that are in the other'. While there is a widespread desire to reduce the state', in order to give way to market forces to work (if ever they ever work) however, the state does have an important role to play, particularly with regard to matters that individuals can't do for themselves. It is commonplace for the poor to see people who are not able to take part in the labour market due to old age, infirmity or chronic illness, or are infirm, socially excluded or discriminated. The poverty of these people as per Streeten (1995:253) is not overcome or alleviated by relying on market forces, but through intentional pressure on social services and transfer payments and the elimination of discrimination'. The focus on reducing the influence of the state in the economy could have a negative impact on pro-poor growth. For pro-poor growth to take place, the government must be a key player in the redistribution of opportunities and resources through transfers of wealth, prioritization of those who are poor in public spending and also in regulating market liberalization to safeguard the livelihoods of people who are vulnerable. According to Ferro et al (2002:19) note, 'government is an instrument of the masses in the development process'. This is why government plays an essential role in helping to promote poor growth by implementing the appropriate strategies to combat poverty.

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