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Pro-poor SustainedPro-poor SustainedEconomic Growth Policies:Economic Growth Policies:Asia-Pacific PerspectivesAsia-Pacific Perspectives

ByByKim Hak-SuKim Hak-Su

UN Under-Secretary-General UN Under-Secretary-General &&

Executive Secretary of ESCAPExecutive Secretary of ESCAP

High-level Dialogue of theHigh-level Dialogue of theExecutive Secretaries with ECOSOCExecutive Secretaries with ECOSOC

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OVERVIEWOVERVIEW

Poverty & growth

How macroeconomic policies affect growth

Achieving pro-poor growth: policy recommendations

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RAPID POVERTY REDUCTION:RAPID POVERTY REDUCTION:HIGH & SUSTAINED GROWTH NEEDEDHIGH & SUSTAINED GROWTH NEEDED

Growth rates & poverty levels

Average annual GDP

growth

Population below $1

poverty line (%)(1993-2002) 1993 2002

China 9.7 28.4 16.6

Viet Nam

7.3 14.6 2.2

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MACROECONOMIC POLICIES, MACROECONOMIC POLICIES, GROWTH & EQUITYGROWTH & EQUITY

Growth process: increases the poor’s

incomes faster

More public expenditure on health & education: benefits the poor, increases their

productivity

Labour-intensive sectors: engines of economic growth

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POLICIES IMPACTING ON POLICIES IMPACTING ON GROWTH & EQUITYGROWTH & EQUITY

Fiscal Monetary Trade Structural adjustment Human resources development Sectoral: agriculture,

construction & small- & medium-enterprises

Redistribution of land & other assets

Population Pro-poor targeting

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PRO-POOR GROWTH – MACRO ECONOMIC POLICIES

Fiscal policy: to reduce inequalities

Promote sectors with more employment opportunities

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POVERTY REDUCTION: MAJOR DETERMINANTSPOVERTY REDUCTION: MAJOR DETERMINANTSDependent variable: Population below dollar (PPP) a day per capita poverty lineExplanatory variables Coefficie

ntt-

valuesGDP per capita (constant 2000 US$)

-0.8584 (-4.85)

Trade (% of GDP) -0.6744 (-3.52)Agriculture, value added (% of GDP)

-0.7296 (-2.45)

Population density (people per km2)

0.0972 (1.14)

Age dependency ratio (dependents to working-age population)

1.4822 (2.55)

Number of observations 79R-squared 0.51F-statistic 41.35Notes: i. Estimation is by ordinary least squares with robust standard errors.ii. All variables are in natural logarithms.

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ACHIEVING PRO-POOR GROWTH: POLICY RECOMMENDATIONS

Pro-poor growth strategies

Ensure that the rural poor benefit from growth

Invest in agricultural R&D, including rural infrastructure, rural education, health, water & sanitation

Remove barriers to service delivery

Role of ESCAP