Blog #3: Poverty down, but 1 in 2 hangs by a thread
India is home to the largest number of poor people in the world, as well as the largest number of people who have recently escaped poverty. Over the next few weeks, this blog series will highlight recent research from the World Bank and its partners on what has driven poverty reduction, what still stands in the way of progress, and the road to a more prosperous India.
We hope this will spark a conversation around #WhatWillItTake to #EndPoverty in India. Read all the blogs in this series, we look forward to your comments.
The sharp decline in poverty in India has been accompanied by a strong pattern of upward mobility, leading to an emerging middle class. Education, urban residence, and wage work have contributed to this higher-than-average upward mobility and lower downward mobility. Yet, a vast share of the population remains vulnerable to slipping back into poverty, suggesting that gains against poverty need to be deepened and made more secure. Scheduled Tribes stand out as a group that has fallen further behind, with one-third stuck in chronic poverty.
The recent global financial crisis has highlighted the impact of credit markets on the real economy, in particular on employment. While an extensive literature exists on how finance can affect corporate investment and overall economic growth, comparatively little is known about the effect of finance on labor market outcomes.
In a recent paper, entitled “Access to Finance and Job Growth: Firm-Level Evidence across Developing Countries” Meghana Ayyagari, Pedro Juarros, Sandeep Singh and I use comprehensive firm-level data across a large set of developing countries to analyze the impact of access to finance on job growth and the heterogeneity in this relationship across firm size. In particular, we study the differential impact of access to finance on MSMEs’ ability to create jobs relative to that of larger firms.
Embracing cultural diversity, especially through the preservation of cultural heritage assets, also brings tangible economic benefits. Preserving or repurposing historic landmarks in downtown cores, for instance, can make cities more vibrant, attract new firms, and foster job creation. In addition, the preservation of cultural assets plays a key part in supporting sustainable tourism, a sector that has significant potential for reducing poverty in both urban and rural settings.
On this World Day for Cultural Diversity for Dialogue and Development, Ede Ijjasz and Guido Licciardi tell us more about the role of culture and its importance to the World Bank's mission.
If you want to learn more about this topic, we invite you to discover our latest Sustainable Communities podcast.
Riddle us this. In what country are...
- 450 million ceiling fans already in use, 40 million new ones sold every year?
- 350 million fluorescent tube lights already in use, 10 million new sold every year?
- 30 million air conditioners already in use, three million new sold every year?
With a population of about 1.2 billion, India is one of the largest consumer markets in the world. So it’s no surprise that household appliances account for several gigawatts of electricity usage across the country. As India’s middle class grows and people move from villages to towns and cities, electricity usage is only increasing. In fact, hundreds of millions of electric appliances will be added over the next few decades. This poses a serious challenge for India’s energy security since there already are electricity supply shortages, which often lead to chronic outages and blackouts. The surge in household appliances is also a climate change challenge—India, the world’s third-largest CO2 emitter, is predicted to continue increasing its greenhouse gas emissions at least until 2030.
But India is turning this challenge into an opportunity by tapping into energy efficiency solutions, a relatively new area with already a few major successes. Considered globally as the “first fuel,” to provide 24/7 reliable and affordable electricity for all.
In recent years, China’s presence in sub-Saharan Africa has risen rapidly. Many fear that China spells doom for the Kenyan economy. Producers of manufactured goods, for example, face more competition from China in both foreign and domestic markets. Others argue that China will exploit Kenya’s resources and leave it unable to industrialize. If the manufacturing sector fails to take off, it will be harder to move people out of poverty.
Blog #1: Five key drivers of reducing poverty in India
India is uniquely placed to drive global poverty reduction. The country is home to the largest number of poor people in the world, as well as the largest number of people who have recently escaped poverty. Despite an emerging middle class, many of India’s people are still vulnerable to falling back into poverty.
Over the next few weeks, this series will look back and analyze publicly available data to better understand what has driven poverty reduction from the mid-1990s until 2012, and the potential pathways that can lead to a more prosperous India. Since it is clearly not feasible to elaborate on all the myriad pathways out of poverty available to India, we focus on a few key themes that the diagnostics show to be of particular relevance to the country. We hope this series will contribute to the ongoing discussions on how poverty can be eliminated from India.
We are thankful to the Indian Express for partnering with us in disseminating this series to its readers.