Transcript Pro-Poor Growth Startegies:

Development Cooperation Approaches
and
Pro-Poor Growth Strategies
Sachin Chaturvedi
March 5-7, 2012
What is Pro-Poor Growth ?
• Little consensus on what exactly is the pro-poor
growth.
• Debate between proponents of growth and poverty
reduction, highlighting the diversity of regional and
country experiences in promoting development
• Whether the main focus of development strategies
should be on growth or on poverty and/or inequality
What is Pro-Poor Growth ?
Studies
Definition
Strategy /Objectives
Baulch and
McCullock
(2000)
“pro-poor growth” means
that poverty falls more
than it would have if all
incomes had grown at the
same rate
distributional shifts so
income of ‘poor’ should
grow faster than that of
non-poor.
Ravallion
and Chen,
2003.
“pro-poor growth” is
growth that reduces
poverty
what happens to
distribution and to
average living standards
What Options for Pro-Poor Growth!
Macro
vs.
Sectoral
Approach
What Options for Pro-Poor Growth!
• Is Export-led Growth Passe?
• Export led growth (ELG) vs. Domestic
Demand led Growth (DDLG)
• Inclusive Growth
Which Sector for pro-poor!
• Gallup et. al. 2001 shows that for every 1 per cent growth in
the agricultural GDP, the positive impact on the poorest is
greater that that from similar growth in manufacturing or
services.
• Thirtle et al. 2001 demonstrates multiplier effects of
agriculture, in the range of 1.35 to 4.62.
• Of course such a growth impetus has to have some preconditions like equitable distribution of resources (de Janvry
and Sadoulet 1996).
• Locating poor in different sectors.
• Focus on Agriculture: Nexus between agriculture and Poverty
Why has Agriculture become relatively Stagnant ?
• Splitting up holdings between one generation and the next has
led to farming on the edge of poverty, without slack to absorb
disturbances
• This requires government to step in to smooth out negative
shocks to the system (latest example: energy prices)
• Over time this has created a complex patchwork of controls,
regulations and subsidies which are difficult to remove in a
system on the edge of poverty
• Access to technology at cost-effective terms
• Self-regulating criticality is a term from systems theory. It
denotes a system with built-in corrective action to maintain the
overall state at the edge of chaos
Poverty Headcount Ratio (at $1.25 a day PPP)
70
60
Percentage of Population
50
40
30
20
10
0
1999
2002
2005
2008
Time
East Asia & Pacific (developing only)
South Asia
Latin America & Caribbean (developing only)
Sub-Saharan Africa (developing only)
Middle East & North Africa (developing only)
Rural Population
80
70
Persentage of Total Population
60
50
40
30
20
10
0
2000
East Asia & Pacific (developing only)
Sub-Saharan Africa (developing only)
2005
Time
Latin America & Caribbean (developing only)
Middle East & North Africa (developing only)
2010
South Asia
Percentage of GDP
Agriclultural Value Added (% GDP)
30
25
20
15
10
5
0
2000
East Asia & Pacific (developing only)
South Asia
2005
2010
Time
Latin America & Caribbean (developing only)
Sub-Saharan Africa (developing only)
Constant USD 2000
Agriculture Value Added Per Worker
4000
3500
3000
2500
2000
1500
1000
500
0
2000
2005
2009
Time
East Asia & Pacific (developing only)
South Asia
Latin America & Caribbean (developing only)
Sub-Saharan Africa (developing only)
Salient Features of Agricultural Sector
• Contribution of Primary agricultural activities varies.
Developing countries on an average have share of 13 per cent
but that for LA 8 per cent and South Asia has 28 per cent
• Extended Agriculture has LA 30 per cent.
• In India share in GDP has declines from 45 per cent in early
70s to 16 per cent but the population dependent is still around
57 per cent.
• This compares with 44% in China (2002) and 21 % in Brazil
(2004).
Salient Features of Agricultural Sector
• Technology and innovations have proved to be a key source for
growth and competitiveness in any economy
• Average Real income of small farmers in South India rose by 90
per cent and that of landless labour by 125 per cent between 19731994 (WB 2001)
• In order to ensure technological competitiveness, technology
foresight is becoming an essential element of the strategy process
in many organizations.
• A 1% increase in labour productivity in agriculture reduces the
number of people living on less tht USD 1 a day by between 0.6 %
and 1.2% (Thirtle et. al. 2001)
The Key Question
• Stagnating agricultural results can abort economic take-off
• To avoid this happening the agricultural system has to be
reformed
• Scale is the key issue. To illustrate: average farm size has to
increase from 1.5 HA to (say) 10 HA
• This will drastically cut agricultural employment which needs to
be replaced by creating new alternative employment
opportunities
• How can this agricultural reform programme be achieved ?
Technology foresight for technology and innovation
policy
-
Essential changes and trends in the economical environment.
-
Key issues in globalisation, internationalisation, integration,
regulation, development of the information society, technological
change in society.
-
Sustainable development and sustainable growth, aging and
other long-term changes in society.
-
Changes and trends in national innovation and production
systems, such as dynamics and long-term development of
industrial clusters and the business environment.
• Programmes are the main tool for putting technology
strategy into practice.
• Technology strategy only provides a starting point for
planning a new programme, that is why technology
foresight is an essential part of the programme process as
such.
• Technology foresight is part of the concept phase of the
programme, when the rationale and goals for the new
programme are analysed and set.
• Many programmes use foresight tools and mechanisms at
the beginning of the programme, to ensure a common
vision between participants.
19931998
19982002
GDP
6.7
5.5
Agriculture
4.7
1.8
3. New Challenges
•Impact of WTO
•Climate change
•Dynamic urban demand
•Private sector development
•Biotechnology
•Globalized information systems
………..
70
60
50
40
30
20
10
0
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1. Low
Growth
2.High Stocks, m. mt
Shedding light on future agriculture
policy and technology options
Min. Norm
Actual
What is likely in Agriculture ?
* More info-intensive world
* China and India the “big stories” in the world economy
* Escalating energy (and other commodities) prices
continue
* Escalating water prices
* Abrupt climate change
* Scale enlargement in agriculture
Key Drivers
Global competition
Investments
Access to markets
Rural income
Better livelihoods
Rural/urban
differential low
Pressure on
agriculture
Rural NFsector
Commercial
ag-enterprises
Is the Development
Cooperation Policy alone can
meet these challenges??
Development Cooperation and
‘Development Compact’
* Trade
Market Access
Domestic Support Policies
NTBs/Standards
* Investment
Enterprise Development
Markets/Value Chain
* Technology
Productivity
Value Chains
* Sectoral approach – central approach
Title - 21
Way Forward
* South shares similar poverty and infrastructure issues
* When successful solutions are found they need to be
transferred if we really want to implement change.
* North’s Strength in Technology and its adaption.
* Reaching out to the rural poor with research and
technologies is a key challenge
* Small Farms, value chains and rural economy.
* Indigenous Institutions and their adoption.
* Narrow Development Gap – LDC Centric Approach
Title - 22