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Growth Vs Poverty Reduction: Is Growth Sufficient for Poverty Reduction?

Updated on November 26, 2014

Is accelerated growth rate necessary and sufficient condition for the poverty reduction? The Case of Pakistan

The accelerated growth is necessary but not sufficient condition for poverty reduction. Pakistan’s past experience show that in 1960’s Pakistan showed higher growth but poverty also increased, same in last some years the growth rate is improving but the poverty, unemployment and inequality is also increasing.

Poverty and Growth in Sub-Saharan Africa (1970-2006)

Source

Some empirical data on the poverty and growth suggests the positive correlation between the growth and the poverty, inequality and unemployment rates. Almost there is a unanimous view that at initial stage poverty and inequality increases with the increase in the growth. But there are some different points of view about the long run growth experience. Some believe in trickle down effect of growth and some argue that that the pro poor growth strategy is necessary for poverty reduction.

In most of the Underdeveloped Countries (UDC’s), the historical trends showed that growth is not sufficient condition for poverty reduction.

Policy measures to alleviate poverty and improved income distribution in Pakistan

The pro-poor growth strategy should be adopted for the poverty reduction and improved income distribution in Pakistan. There are many things that governments can do to assure more pro-poor growth. A high priority must be given to public action that can help poor people acquire the skills and maintain the good health needed to participate in the growth process. Policies that help insure the poor can also help underpin their longer-term prospects of escaping poverty. So, well-designed direct public action plan against current poverty can also help promote growth and hence longer-term poverty reduction.

The challenge for policy is to combine growth-promoting reforms with the right policies to assure that the poor can participate fully in the opportunities unleashed, and so contribute to that growth. Get the combination of policies right, both growth and poverty reduction can be rapid.

Following policy measures should be adopted:

  • Maintaining Economic Stability
  • Balanced approach towards regional and income inequality
  • Creating Job Opportunities
  • Improving Governance
  • Investing in Human Capital
  • Targeting the Poor and Vulnerable
  • Enhancing Agricultural output through research
  • Promoting Small and Medium Enterprises
  • Enhancing the microfinance programs

© 2014 Ghualm Mohey-ud-din

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