Equitable Growth Must for Reducing Poverty and Inequality
Islamabad, July 24, 2012- Growth is a prerequisite for poverty reduction, but growth alone does not suffice. Pro-poor policies and equitable growth are essential for vulnerable segments of society to catch up and not get permanently left behind because of uneven playing field. This was the main message emanating from “Poverty and Inequality”, latest in the development dialogue series being organized by the World Bank. Francois Bourguignon, Director Paris School of Economics, an eminent authority on micro determinants of poverty and a former Chief Economist of the World Bank Group delivered the keynote presentation at the occasion.
“Absolute poverty reduction has to be the main goal of development,” said Mr. Bourguignon during his presentation entitled Policies for Inclusive Development in a Globalizing World. “Global experience shows that while globalization and growth can lead to inequality, it needs not necessarily be so. Domestic policies can reduce inequality without impairing growth.”
The last decade has seen remarkable growth, poverty reduction and improved education and health outcomes in the world in general and in South Asia in particular. Pakistan was no exception to this progress. Both the poor and the rich populations enjoyed the growth benefits. Thus, it can be safely inferred that the decline in poverty has strictly relied on growth and that important challenges still remain on the inequality front for Pakistan.
In his speech Abdul Hafeez Shaikh, Federal Minister for Finance reiterated the government’s resolve to accelerate growth, reduce poverty and address inequality. He highlighted four measures the government has introduced for bridging inequity: i) agricultural pricing policy that helps the farming sector; ii) increased expenditures on social safety nets with emphasis on better targeting of the poorest and vulnerable segments of society; iii) under the new formula for sharing federal resources with provinces the latter have received a major boost in transfers; and iv) deliberate effort is being made by the federal government to have regionally balanced development of infrastructure throughout the country. He welcomed the World Bank’s initiative of expanding the development discourse in Pakistan.
“Poverty and inequality are two topics that are at the core of the World Bank mission”, said Rachid Benmessaoud, World Bank Country Director for Pakistan. “This dialogue is taking place at a time where Pakistan faces the challenge of accelerating growth and fostering employment following a series of natural disasters. In the light of the 18th Constitutional Amendment, the challenge for making growth pro-poor now lies not only with the federal government, but with the provincial governments as well.”
In her concluding remarks, Farzana Raja, Member of National Assembly and Chairperson Benazir Income Support Program (BISP) said that poverty was a gross violation of basic human rights and that growth without equality can lead to a widening gulf between the haves and the have-nots. While enumerating the achievements of BISP like poverty scorecard based targeting system, female headed household as selection criteria, and financial inclusion by payments through the banking system, she called upon the development partners to help galvanize the corporate sector in joining hands with BISP in provision of social safety nets to the poorest of the poor.
Federal and provincial government officials, development partners and media evinced great interest in presentations made by Francois Bourguignon, Ministry of Finance, Pakistan Bureau of Statistics, and BISP. A lively exchange during the question and answer session mainly revolved around implications of issues like globalization, poverty and inequality for a developing country like Pakistan. Responding to a number of questions about the best way to address the issue of inequality, Mr. Bourguignon said that redistribution of accumulated resources like education, health services, and access to credit among the poor was the least-cost approach to attaining more equality.