Saturday, September 3, 2016

Does economic growth really lift the poor?

It has been a matter of intense debate since the 1950s to date that the economic growth and development also positively affects the poor population. As the socio economic inequality increases in the initial period of the development of the country, the economic growth does little in reducing poverty (Kuznets (1955). But economic growth is unequally distributed and effects of growth on poverty reduction will be less or more depending on whether the incomes of the poor grow by less or more than average (Deaton, 2003).

In fact, the economic growth plays vital role in reducing poverty at large scale, but economic growth is not a magic bullet to reduce poverty. Within the past decades in China, consistent economic growth has lifted more than 20 percent of the poor population out of poverty. Nearly 250 million poor people were out of poverty, but the income inequality during the same period of time has doubled. The income and wealth gap between urban and rural communities in China is highest in the world. Life expectancy of an urban Chinese person is 5 years more than his rural counterpart. In highly developed provinces, the literacy rate is significantly high but, there are many provinces including Tibet, where merely half of the populations are able to read and write (UNDP, 2005).

Even the success of reducing poverty in the East Asian countries, Japan, South Korea, Taiwan and Singapore is largely based on policies ranging from land reform, universal basic education, public housing and primary health care system. This is also true in most part of the world that the nature of the political economy is also responsible for creating more poor people and more inequality in the country.  When the inequality is high, the rich use their wealth to secure outcomes favorable to their interests, influencing everything from government spending in the area of higher education rather the primary education, using tariffs and protection mechanism in trade to maintain monopolies, private health service provisions and its concentration in the urban areas (Perkins, Radelet, Lindauer 20006).

Even global economic impact affects the poor population locally in a significant manner. The number of people living in extreme poverty in 2009 is expected to be 55 million to 90 million higher than originally anticipated before the global economic crisis (MDG, 2009). This shows that poverty is not static but a new set of group falls in the poverty while the effort of reducing poverty goes on. There are many studies (Krishna 2007) that show that there are significant numbers of people falling into poverty while at the same time people coming out from the poverty. The debate of falling and coming out has its own importance in recognizing effective measures to address the poverty. But, The poverty is relative term and this ‘can not be understood unless in relation to how others in society live( Haskins and Sawhill,2009).

The poverty travels from one generation to another generation with the same nature or may be in the worse form. The changes in the education and professional status in the poor families within a generation is still a distant dream. Having food, shelter and clothing that meet basic needs of poor people not just sufficient to move up in the social and economic ladder, the most important to provide and give their children a greater opportunities  (Uphoff, 2005). I did a study in my Master course during Duke University, interviewed 300 families in Rajasthan state in India, which clearly shows that there is no major change between the father and son professions. Here, the change in the profession has been evaluated on the basis of income and status. The good news is that the educational level of the son has been improved in comparison with the father education level.
  
This has also been studied in the United States , where ‘42 percent of American sons whose fathers had earning in the lowest quintile remained stuck at the bottom, and slightly smaller fraction of American sons rise from the very bottom to very high’ (Haskins and Sawhill,2009). In this kind of socio economic situation in major part of the world give new insight to understand the complexity of poverty and its impact over the health.