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Economic growth is the main determinant of poverty alleviation as shown by the huge international disparities in income per person. In most of Africa and parts of Latin America and Asia, poverty is the norm because economic growth has failed to take off. Economic growth, however, is necessary but not sufficient—growth must also be inclusive and shared. East Asian economic growth has contributed tremendously to poverty reduction because it has been based on growth of labor-intensive exports of manufactured products, thus generating large-scale employment for unskilled workers.
Participation in the global economy has been the key to growth and poverty reduction in countries such as Korea, Malaysia, China and Vietnam in Asia, Chile and Costa Rica in Central America, and Botswana and Mauritius in Africa. In addition, a social safety net plays an important part in sharing the fruits of growth and globalization.
Economic growth requires a market economy, but the market generates disparities in incomes. Social insurance programs and public education can alleviate these disparities. Before a country can distribute, however, it must produce, hence the importance of growth.
Professor of Economics at Swarthmore College, Stephen Golub
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