South Asia to cut poverty by two-thirds in a decade
26 Jun '06
5 min read
Impressive Progress so Far:
Bangladesh, India, and Pakistan have all grown at over 5 percent per year on average during the last five years. Growth in both Pakistan and India topped 8 percent last year. Forecasts put South Asian economies on a steady path of expansion this year.
Economic growth has already contributed to an impressive reduction in poverty.
In the last decade, poverty in Bangladesh, India, and Nepal fell by 9, 10 and 11 percent respectively; in Sri Lanka it fell by 6 percent. Only in Pakistan did poverty increase by 8 percentage points due to economic stagnation throughout the 1990s. The most recent evidence (2004-5 survey), however, suggests that with the resumption of high growth, poverty is again declining rapidly in Pakistan.
Translating growth into poverty reduction:
But much remains to be done to achieve accelerated growth rates that increase economic prosperity across the board, the report says. First, economic growth in the past decade has resulted in growing income inequality which may act as a constraint to higher growth in the future. Second, while conflict, corruption, and high fiscal deficits may not have constrained growth in the past, their persistence may become binding in the future.
Faster growth must also be more equitably shared, the report says. With nearly 400 million poor people, poverty in South Asia is not just endemic, but increasingly concentrated in lagging regions. Not only are these regions poorer, but their growth rates are substantially slower than the better-off regions.
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