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IMF bemoans weak linkages between economic growth, poverty reduction

IMF bemoans weak linkages between economic growth, poverty reduction
By Florence Bupe
Monday September 10, 2007 [04:00]

THE International Monetary Fund (IMF) has expressed concern that the linkage between Zambia’s economic growth and poverty reduction has been weak. According to an update report on Zambia’s poverty reduction strategy, IMF noted that despite the country recording a continuous upward trend in economic activities, it was possible to accelerate poverty reduction beyond the current rate.

“Despite posting the longest spell of positive economic growth (since 1999) in Zambia’s post- independence period, and a representative reduction in poverty, the perception among Zambian citizens is that poverty reduction can be accelerated. One reason for this view is that much of the growth has been concentrated in the largely urban based and capital-intensive sectors of mining, wholesale and retail trade and construction,” the IMF observed.

The report recommended that it is vital for government to critically consider environmental implications of all projects and programmes under the poverty reduction bracket if it is to make any meaningful positive change.

“While pursuing policies to enhance the impact of growth on poverty, it is important to assess the consequences for the environment. Even though the FNDP (Fifth National Development Plan) recognises the causes of environmental and natural resource degradation, the analysis on how to solve such problems could be strengthened, but this requires an effort to mainstream sustainable development across line ministries and concerted effort to collect information on natural resource management and environmental degradation to guide future decisions in this area,” the Fund stated.

And the IMF has cautioned that lack of tangible progress in improving Zambia’s investment climate could endanger diversification and reduce investments in productivity enhancing activities. The fund also emphasised that macroeconomic stability could come under pressure from volatility in the world market price for copper.

Labels: IMF, NEOLIBERALISM, POVERTY

posted by MrK @ 3:41 AM