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Is High-Growth Approach Best?
COUNTRIES that emb raced high growth. fr-ce market outward-oriented" economic strategies have been moat successful In reducing poverty, according to the Asian Development Outlook 1992. an annual publication of the Manila baaed Asian Development Bank (ADBI
The report debunks some long cherished development notions For instance. It says land reform and subsidised social services, supposedly potent antidotes to poverty, may be Ineffective, or even make matters worse
In the 196Os and 197Os. high growth economic strategies were hit for favouring the rich and worsening social Inequalities. Rather than wealth trickling down' and benefiting the poor, the poor became poorer and the rich richer
But many fvntrally planned, government-directed economM* foiled In the late l98Os and early 199Os free markets acquired renewed respectability and development thinking has embraced high growth strategies
The latest ADB analysts echoes that of the World Bank s 1991 World Develop ment Report, which says coun-tries can best achieve sus talned economic growth through a market-friendly' approach.
This means governments should let the economy work freely and take on on^ those functions — like defence, edu cation and other essential services — that only the state can properly perform.
ADB adds this economic approach beats all others in taming poverty, which In Asia
is mainly a rural crisis. It says rural poverty In Asia has fallen significantly in the regions developing countries over the past quarter century.
China. Indonesia and Korea lead the pack. In China, the number of poor people has declined by nearly 15 per cent yearly. Indonesia has averaged about eight per cent and Korea 7.5 per cent yearly.
Some economic analysis have long argued there arc trade-offs between measurers to combat poverty and push economic growth but the record shows the two objectives go together, the ADB reports says. Every one per cent rise In the overall per capita rate of economic growth seems to be associated with a 1.1 per cent decrease in the poverty head count, Il added.
Asia has an enormous stake 1n global efforts to alleviate poverty since it Is home to .two-thtrds of the world's 630 million extremely poor' and three-fourths of its 11 billion poor people. About two thirds of these are In South Asia and
over half live In India alone. Billion* of dollars of aid fund* have been poured in to various anti-poverty programmes intended to directly assist the poorest of the poor, like integrated rural development programmes, special credit programmes and land reform. Large sums have also been poured tn to basic education programmes.
These were largely reac tions to criticism* that high-growth development strategies tended to disproportionately benefit the better-off. Bui the ADB now stresses a libera) economic environment has an Indirect but ultimately more profound impact on poverty
While various types of safety net' social programme* like subsidised health have been found to be very effective tn alleviating situation* of ex treme poverty, these are quite expensive and can only be bus talned If the economy attain* rapid growth, the report says
The ADB caution* some programmes long thought to be good at reducing poverty may cause more harm than
good. Land reform pro grammes In India and the Philippines, for example, may have tn their different way* "reduced equity and efficiency." the report says
Restrictions on tenancy ar rangements in both countries have prodded landowners to avoid tenancy altogether, turn Ing many erstwhile, t^iaqts ln_ to lan^k-ss rural workers
The ADB report also argues Aslan governments should re examine subsidies for social service* and key agricultural Inputs like fertilisers and pesticides.
Many of these social service like health and housing dis-
proportionately benefit the 'non-poor'
Benefit* from the agricul tural subsidies meanwhile also lend to be cornered by the better off," often leaving the poor squeezed out.' the report said
The ADB survey on Asian poverty reflects the rise of neo liberal economic thinking worldwide as evidenced by the Increased acceptance of market oriented economic reform* by many Third World governments, Including social 1st regimes
But many Aslan non gov cm mental organisation* (NGO s I remain deeply critical of »u< h economic approaches and aay much of their work consists of cleaning up the mess left by behind by gov ernments pursuing free markets.
Thal NGO » point out Thailand s remarkable economic success In recent years actually illustrates the fundamental Opws qf high-growth economic strategics.
They say the boom has enriched Bangkok, but Impoverished the north and northeastern regions of the country and created social and environmental crises that will plague Thailand in the coming years.
-IPS