From poverty to power - Oxfam-Québec
Share Embed Flag
Download ePaper

From poverty to power - Oxfam-Québec

From poverty to power - Oxfam-Québec From poverty to power - Oxfam-Québec

oxfam.qc.ca
12.07.2015 Views

GOING FOR GROWTHFifty years ago, Korea was poorer than the Sudan. Its main export waswigs made from human hair. Today it is an industrial leader with aGDP per capita more than nine times greater than that of Sudan. 159 Interms of health, wealth, education, and expectations, the lives ofKoreans today bear little resemblance to those of their grandparents.Elsewhere, Taiwan and Viet Nam have achieved the rare feat ofcombining high-speed growth with one of the fairest distributions ofincome in the world. China’s rise since the late 1980s has delivered thegreatest reduction in poverty ever recorded. 160 These extraordinarysuccess stories are historically unprecedented features of the modernera: all 12 cases of countries growing by more than 7 per cent a yearover a 25-year period have occurred since the Second World War. 161The extent and nature of economic growth is central to developmentand to the lives of poor people. 162 Put simply, countries that havereduced poverty have invariably had to grow to do so.Properly managed,growth in the market economy creates jobs, increases incomes, andgenerates tax revenues that effective states can invest in infrastructure,schools, and hospitals. Creating wealth is an inseparable part ofreducing poverty.Inequality determines how far growth benefits poor people: a 1 percent increase in per capita GDP can reduce income poverty by asmuch as 4 per cent or as little as 1 per cent. 163 Redistribution of wealthby means of land reform or progressive taxation can leave poor people179

FROM POVERTY TO POWERbetter off even in a shrinking economy, but in practice redistributionalone has never reduced poverty for more than brief interludes. Thesubstantial reduction in poverty in most OECD countries during thetwentieth century came through a combination of long-termeconomic growth and modest redistribution. 164According to the Commission on Growth and Development, invery poor countries growth is the main route to poverty reduction,but as a country develops redistribution becomes more important asa way to reduce poverty. 165 As economies grow worldwide, redistributiontherefore should become an increasingly important feature ofgovernment policy.Economic growth is a measure of the increase in the output ofgoods and services in the monetised part of the economy. Growth mayresult from an increase in the number of workers or an increase intheir productivity (producing more goods and services per worker).The latter can be achieved through better technology, throughimproving the health and skills of the workforce, discovering anddeveloping new natural resources, and through greater efficiency via‘economies of scale’. Upgrading in this way often requires painfulstructural change,such as moving out of agriculture into manufacturingor higher-tech companies squeezing out lower-tech ones, a processmemorably described by the economist Joseph Schumpeter as the‘creative destruction’ at the heart of capitalism. 167For neoclassical economists and for many policy makers, growthin the market economy is so important that they often lose sight of thefact that growth is a means to promote human welfare, not an end initself. But growth is inherently disequalising, since richer peoplegenerally find it easier than those living in poverty to take advantage ofnew opportunities and to protect themselves from shocks. Effectivestates are essential to containing and reversing this disruption, forexample through taxation, spending, credit, and regional policies andinvestment decisions.At a global level, growth is an increasingly blunt instrument forreducing poverty. Between 1981 and 2001, world GDP increased by$18,691bn. Of this, only $278bn, or 1.5 per cent, accrued to peopleliving below the $1-a-day poverty line, even though they constitutedone in three of the world’s population at the start of the period.180

GOING FOR GROWTHFifty years ago, Korea was poorer than the Sudan. Its main export waswigs made from human hair. Today it is an industrial leader with aGDP per capita more than nine times greater than that of Sudan. 159 Interms of health, wealth, education, and expectations, the lives ofKoreans <strong>to</strong>day bear little resemblance <strong>to</strong> those of their grandparents.Elsewhere, Taiwan and Viet Nam have achieved the rare feat ofcombining high-speed growth with one of the fairest distributions ofincome in the world. China’s rise since the late 1980s has delivered thegreatest reduction in <strong>poverty</strong> ever recorded. 160 These extraordinarysuccess s<strong>to</strong>ries are his<strong>to</strong>rically unprecedented features of the modernera: all 12 cases of countries growing by more than 7 per cent a yearover a 25-year period have occurred since the Second World War. 161The extent and nature of economic growth is central <strong>to</strong> developmentand <strong>to</strong> the lives of poor people. 162 Put simply, countries that havereduced <strong>poverty</strong> have invariably had <strong>to</strong> grow <strong>to</strong> do so.Properly managed,growth in the market economy creates jobs, increases incomes, andgenerates tax revenues that effective states can invest in infrastructure,schools, and hospitals. Creating wealth is an inseparable part ofreducing <strong>poverty</strong>.Inequality determines how far growth benefits poor people: a 1 percent increase in per capita GDP can reduce income <strong>poverty</strong> by asmuch as 4 per cent or as little as 1 per cent. 163 Redistribution of wealthby means of land reform or progressive taxation can leave poor people179

logo

products

Resources

Company

Terms of service
Privacy policy
Cookie policy
Cookie settings
Imprint
Change language
Made with love in Switzerland
© 2024 Yumpu.com all rights reserved

Hooray! Your file is uploaded and ready to be published.

Saved successfully!

Ooh no, something went wrong!