Ending poverty requires more than just growth

The World Bank’s suggestion that developing countries must fund social security programmes to lift the incomes of their poorest people must be taken seriously. These countries cannot rely only on growth to end poverty. While economic growth remains vital for reducing poverty, it has its limits. As a recent World Bank report says “countries need to complement efforts to enhance growth with policies that allocate more resources to the extreme poor.”

These resources can be distributed through the growth process itself, by promoting more inclusive growth, or through government programmes, such as conditional and direct cash transfers.

With close to one-third of the world’s extreme poor concentrated in India and another one-third in four other countries, a sharp focus on them will be central to ending extreme poverty.

The top five poorest countries - India (with 33% of the world’s poor), China (13%), Nigeria (7%), Bangladesh (6%) and the Democratic Republic of Congo (5%) - together are home to nearly 760mn of the world’s poor, according to the World Bank.

Adding another five countries - Indonesia, Pakistan, Tanzania, Ethiopia, and Kenya -would encompass almost 80% of the extreme poor.

Tackling poverty requires understanding where the greatest number of poor live, while at the same time also concentrating on where hardship is most pervasive.

In addition, it is imperative not just to lift people out of extreme poverty; it is also important to make sure that, in the long run, they do not get stuck just above the extreme poverty line due to a lack of opportunities that might impede progress towards better livelihood.

According to a Bank report, in recent years in India, new Information Communications Technologies (ICT) applications have created opportunities to re-engineer and upgrade traditional systems and to empower beneficiaries. “India’s ambitious new programme” to provide its citizens and residents a unique, official identity, the UID (Universal Identity) “aims to improve the delivery of government services, reduce fraud and corruption, facilitate robust voting processes, and improve security,” the Bank noted in its report.

“Indeed, ICT has the potential to be a powerful tool in the fight against global poverty and in boosting shared prosperity,” it added.

According to World Bank Group president Jim Yong Kim “to end extreme poverty, the vast numbers of the poorest - those earning less than $1.25 a day - will have to decrease by 50mn people each year until 2030. This means that 1mn people each week will have to lift themselves out of poverty for the next 16 years. This will be extraordinarily difficult, but I believe we can do it. This can be the generation that ends extreme poverty.”

But some experts feel the $1.25 per day poverty line used by the bank is too low and artificial, and they estimate that global poverty could be a third higher than currently reported.

To achieve the goal of poverty reduction the countries need determination, ideas and innovation.