From poverty to power - Oxfam-Québec

3 POVERTY AND WEALTH GOING FOR GROWTHtruck. 185 For the moment, coffee and oil prices are high, and the priceof trucks (and Nano cars) is falling. Opinions differ as to whether thisis the start of an extended period of high prices that defies the normalrules of boom and bust and long-term trade decline. The recovery intropical commodities such as coffee has lagged well behind temperatecrops such as wheat, and history suggests that the boom is unlikely toendure forever, as high prices encourage new entrants to the market ortechnology finds new, cheaper substitutes for existing commodities.If the long-term decline in the terms of the trade goes into reverse,however (at least for commodities that are not easily substituted),then developing countries’ growth strategies may come to look verydifferent in future to the standard ‘subsistence agriculture to exportagriculture to garments and textiles to electronics’ sequence followedin the past. The rewards from commodity production will be higherand from industrialisation lower; new technologies and globalisationwill allow countries to capitalise on new forms of comparative advantage,such as services involving spoken English, or tourism, or culture; andcountries may have to focus on domestic and regional markets, ratherthan trying to compete with China in global trade.SUSTAINABLE GROWTHEconomic growth is an essential way to tackle poverty and inequality,as shown by some of the extraordinary success stories of the modernhigh-growth era, but the quality of that growth matters as much as thequantity. Figure 3.1at the beginning of this section introduced a moreholistic approach to economics. By applying the analytical elements ofthat approach, development strategists can seek to manage growth sothat it maximises human welfare.Reducing income poverty: Growth does not always raise the incomesof poor people. Growth through technology-driven improvements inproductivity has been termed ‘jobless growth’, because it fails to createmore jobs than it destroys. The phenomenon is particularly worryingin that job creation is one of the main ways that growth reduces poverty.In developing countries with rapidly growing populations, newgenerations of youth are not being incorporated into the world ofwork. Even in China’s booming economy, the rate of technological189