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Poverty Alleviation
Economic Growth With Human Face

By Shanker KC

ONE of the very depressing features of our time is that despite the tremendous progress made by humanity in every field of knowledge a large population in developing countries have to live very humiliating life both economically and socially. Threats of hunger and malnutrition are always haunting them.

Majority of them still do not have decent shelter to live and are denied access to basic education, health care, safe drinking water and sanitation. In many of these poor countries staggering poverty exists side by side with extreme opulence. Rich are getting richer and poor further poorer. Income gap is widening so dangerously that it threatens to break the very fabric of society.

What has gone wrong with our past development efforts? Where did we go wrong? Is there any route that will allow us to escape this vicious circle of poverty? Is the present emphasis on economic liberalisation and market mechanism panacea for all this? Or more distribute and interventionist approach to economy is needed?

After the Second World War many nations came out of the grip of imperialist forces and gained independence. National governments, which came to power after the colonial rule, gave strong emphasis on self-sustained economic development. Some nations followed the socialist path of economic development, other some followed a mixture of socialism and capitalism. However, bot group of countries failed to make tangible improvements on living conditions of the majority of people despite their egalitarian rhetoric.

Still many others followed the path of unrestrained capitalism with sole emphasis on achieving high economic growth. Growth was taken as synonymous with economic development. It was believed that by replicating the experiences of the developed world it is possible to achieve high economic growth. To promote growth two pronged strategies of agricultural developmetn and industrialisaton were followed.

Developed countries and international development agencies made sophisticated technologies, technical experts as well as capital resources available to these countries with focus on economic growth. It was thought than human welfare would be enhanced in the long run, as the fruits of high economic growth will automatically trickle down to the lower strata of society living in poverty.

However, this disillusionment slowly shattered as it become evident by the late seventies that very few countries achieved sustained and high economic growth to have any tangible impacts on poverty alleviation. Even in those countries, which were able to achieve high growth, it contributed to widening the income gap between the rich and the poor. For example, human development report of UNDP (1992) pointed out that, in Brazil top 20 per cent of the population received 26 times the income of the bottom 20 per cent.

Development efforts with high priority to economic growth benefited mostly certain segments of the society, who were already well off. The expected fruits of development were "trickling down" so slowly that it would take unduly long time to benefit the targeted population.

Reorientation

However, it would be wrong to say that maximisation of the economic growth has not helped in any way. If the economic growth had not been achieved, the picture of the world would have been more miserable than it is today. But if the distribution of the growth had been more, it would have been almost possible to eradicate poverty in many parts of the world.

Thus a new concept of development began to emerge. It was realised that economic growth alone does not bring the development, if the real meaning of the development is to eradicate or at least alleviate poverty from the face of the earth. Miximisation of economic growth is a precondition for development. But obsession of measuring the development in terms of economic growth alone and standard of living in gross national product per capita failed to show the actual distribution of income among the population.

Economic growth without social justice can produce very rich farmers and there may still be many land-less labourers and small farmers who have difficulties to eke out their daily existence. High degree of industrialisa-tion can be achieved at the cost of the exploited labour forces. Such anomalies actually emerged in many developing countries. As a result, scholars, national governments in the developing world as well as international development agencies began to rethink about the growth oriented development strategies. Development for human dignity

Dissatisfaction with the results of the economic growth paradigm led to need for reconsideration of meaning of development and fundamental redirection in development policies. Need for more humanitarian and welfare oriented approach was felt. Development paradigms shifted from achieving high economic growth with minimal thoughts on equity to poverty alleviation and basic needs fulfilment.

The major components of the new paradigm included basic needs fulfilment such as food, shelter and clothing, access to service such as education, safe drinking water and sanitation and health services and raising the capacity to participate in social life through increased political involvement and employment opportunities. It sees the poverty in different perspectives: not as condition to be overcome by the individual but a product of deteriorating social and environmental circumstances.

However, there are some who argue that more welfare and equity oriented approach hampers the economic growth thus creating negative effects on overall performance of the economy. Is it possible to redistribute the gains from development without any cost to economic growth? If we compare the extent of poverty measured in terms of human development index (life expectancy at birth, literacy and income) in a country and GNP per capita, we find direct correlation-a country with high per capita also has low incidences of poverty.

This suggests that the solution to poverty is raising overall standard of the people with high economic growth. This is further supported by the fact that populations living below the poverty line have fallen markedly over the past decades in several fast growing economies of the East Asia. South Asia with its steady but slow growth has also some success in combating poverty. However, poverty situation has worsened in many countries including Sub-Saharan Africa where growth rates have been negative.

It can be said that with economic growth poverty shows sign of declining. Then why emphasise on poverty alleviation and basic needs fulfilment? Because, firstly, it will take excessively long time to reach the benefits of economic growth to very poor. Secondly, high rate of growth has to be sustained over the long period of time if any visible sign of decline in poverty is to be noticed. Thirdly, with high and sustained economic growth absolute poverty may show sign of decline but income gap may widen.

Thus, current emphasis on poverty alleviation and basic needs fulfilment is not misplaced. Poverty alleviation efforts with its investment in human resources will ultimately contribute to steady economic growth. However, too much distributionary temptation should be curbed. Economic growth is necessary but not sufficient conditions for the overall human development. So development strategies should focus on achieving high economic growth as well as fulfilment of basic needs and poverty alleviations.

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