[Dec 2007, Volume 4 Quarterly Issue] Pdf File size - The IIPM Think ...

MORE MARKETS, LESS GOVERNMENT
inability of market forces to step in
and jump-start agricultural growth.
According to Professor Jeffery Sachs
of Columbia University, “The whole
thing was based on the idea that if you
take away the government for the poorest
of the poor, markets will somehow
solve the problems, but markets can’t
step in and won’t step in when people
have nothing. And if you take away
help, you leave them to die.” 3
The example of sub-Saharan Africa
clearly illustrates the criticality of the
role of a pro-poor ‘welfare state’ in
safeguarding the survival needs of the
poorest of the poor, who do not offer
any investment incentives to profitseeking
market forces.
According to the United Nations-
Millennium Development Goals
(MDGs) report of 2007, the share of
the poorest fifth of populations in developing
regions in national consumption
decreased from 4.6 to 3.9 percent
between 1990 and 2004. Widening income
inequality is of particular concern
in Eastern Asia, where the share
of consumption among the poorest
people declined dramatically during
this period. Inequality is the highest in
Latin America, the Caribbean and in
sub-Saharan Africa, where the poorest
fifth of the people account for only
about three percent of national income,
despite increased involvement
of market forces in local economies.
Internationally, 46 countries of the
world have become poorer today than
they were in 1990, according to Human
Development Report 2004.
Nearly 1300 million people live in
absolute poverty, earning less than one
dollar a day, while about 3000 million
people, more than a half of the world’s million people are officially registered
population live on less than two dollars as unemployed, besides an additional
a day. According to the International 700 million underemployed people.
Labour Organization (ILO), over 120 Instances of poverty, which often are
Growing Inequality In The World
Share Of Poorest Quintile In National Consumption,
1990 And 2004 (Percentage)
Latin America & the Caribbean
2.8
2.7
3.4
1990
3.4
2004
Eastern Asia
7.1
4.5
Western Asia
5.9
5.4
South-Eastern Asia
6.2
6.1
CIS
7.9
6.2
Northern Africa
6.2
6.3
Southern Africa
7.2
6.7
Transition Countries Of South-Eastern Europe
8.3
7.8
Developing Regions
4.6
3.9
0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0
Source: UN MDG Report 2007
THE INDIA ECONOMY REVIEW
69