Maravi

Study explains poverty reduction challenges

Study explains poverty reduction challenges
By Joan Chirwa
Friday February 29, 2008 [03:00]

POVERTY reduction becomes a much more challenging task when the poor fail to participate in the growth process, a study released by Consumer Unity and Trust Society (CUTS) has stated. And CUTS International deputy executive director Bipul Chatterjee has stated that pro-poor and pro-development policies must be considered as integral parts of a just and anti-poverty trade policy regime.

CUTS, through its Trade, Development and Poverty (TDP) project, manifests the policy relevance of international trade on poverty reduction.

The TDP project, with a three year implementation period ending this December and supported by the Department for International Development (DFID), the United Kingdom and the Netherlands, is also meant to assist in articulating policy coherence between the international trading system and national development strategies for trade to facilitate human development and poverty reduction.

“The next important aspect is the relationship between growth and poverty. There has been some concern amongst the policymakers that the benefits of growth are often not equitably distributed,” stated a study on trade, development and poverty linkages for sub-Saharan and Asian countries recently released by CUTS International. “When the poor cannot participate in the growth process, poverty reduction becomes a much more challenging task.

The term ‘pro-poor growth’ is therefore coined to emphasise the inclusive nature of the expanded economic activities. As trade adjustment is more likely to create a group of ‘winners’ along with ‘losers’, distributional consequences need to be understood carefully for assessing the implications for poverty reduction efforts.”

The study further noted that while Zambia, Tanzania and Sri Lanka had low export growth and poverty reduction rates, the deterioration in the poverty situation for Kenya and Pakistan made them rather unusual in the landscape of TDP project countries.

“On the whole, therefore, the project countries seem to suggest that despite the general relationship, the relationship between overall output growth, export expansion and poverty reduction is much more complex,” stated the TDP study.

And Chatterje stated that the linkages between international trade, development and poverty reduction had gradually begun to receive increased attention in many developing countries.

“Since trade policies affect poverty through their effects on economic growth and equitable income distribution, a pro-poor growth policy has a significant impact on poverty reduction rather than growth per se,” Chatterjee stated. “The benefits of economic growth resulting from international trade can positively impact on the poor through increased spending on health, education and social welfare, an increase in employment opportunities and the acquisition of new skills and technologies.”

Labels: CUTS, POVERTY

posted by MrK @ 3:44 AM