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Poverty

What Does More and Better Jobs in South Asia Mean?

Pradeep Mitra's picture

The Track Record

Imagine adding the population of Sweden—somewhat under 10 million— to your labor force year after year for a decade. Insist that the wage workers among them earn increasing real wages and that poverty among the self-employed decline over time. What you have just described is not quite South Asia's record on the quantity and quality of job creation between 2000 and 2010. The region has done better.

Poverty has fallen, not only among the self-employed, but among all types of workers—casual laborers who are the poorest, regular wage and salary earners who are the richest and the self-employed who are in between. This hierarchy of poverty rates among the three employment types has endured over decades. Thus improvements in job quality have occurred predominantly within each employment type rather than through movement across types. The composition of the labor force among the employment types shows little change over time. The self-employed, many of whom are in farming, comprise the largest share, reflecting the predominance of agriculture in much of the region. Casual laborers make up the second largest share in rural areas.

Africa’s statistical tragedy

Shanta Devarajan's picture

Fifteen years ago, Easterly and Levine published “Africa’s Growth Tragedy”, highlighting the disappointing performance of Africa’s growth, and the toll it has taken on the poor. Since then, growth has picked up, averaging 5-6 percent a year, and poverty is declining at about one percentage point a year. The “statistical tragedy” is that we cannot be sure this is true.

Take economic growth, which is measured in terms of growth in GDP.  GDP in turn is measured by national accounts.  While there has been some progress, today, only 35 percent of Africa’s population lives in countries that use the 1993 UN System of National Accounts; the others use earlier systems, some dating back to the 1960s. 

To show that this is not an arcane point, consider the case of Ghana, which decided to update its GDP last year to the 1993 system.  When they did so, they found that their GDP was 62 percent higher than previously thought.  Ghana’s per capita GDP is now over $1,000, making it a middle-income country. 

Taxing the poor… through inflation

Wolfgang Fengler's picture

Imagine you are spending half of your income on something whose price suddenly increases by a quarter. Seems impossible? This is how in fact inflation has hit the poor in many developing countries, especially Kenya.

This September, overall inflation reached a record high of 17.3 percent. One year ago it was just above 3 percent. Why has it increased so sharply even though Kenya has followed prudent macro policies? The short answer is: food and fuel. In Kenya, food accounts for 36 percent of the average person’s expenditures; energy and transport another 27 percent. The urban poor spend more than 43 percent on food. Since January, food prices have increased by almost 25 percent (see figure), partly as a result of international trends but also due to Kenya’s- agriculture policies. Maize prices tripled between January and June until they retreated a little once the government waived import duties and the 2011 harvest started trickling in. 

Breaking the Mold

Sabina Panth's picture

 Investment in gender equality is smart economics, according to the recently launched World Development Report (WDR 2012) of the World Bank.  Increasing women’s access to resources and participation in economic opportunities can increase productivity, improve outcomes for children and improve the overall development prospects of a country, concludes the report.  However, a number of factors, mainly gender roles guided by staunch social norms and rigid institutional practices, have impeded recognition of women’s participation and contributions in economic activities. To address this issue, WDR proposes focused domestic public policies.  In a recently held brown bag luncheon at the Bank, Dr. Fouzia Saeed shared her experience regarding these topics, and the resultant groundbreaking legislation in protection and promotion of Pakistani women’s rights and contributions to their country’s development.

Join Us for Two Exciting Events This Week!

Joe Qian's picture

2011 Flagship: More and Better Jobs in South Asia
Thursday, September 22, 2011 from 2:30PM to 4:30PM


 

African countries are among the fastest growing economies in the world

Punam Chuhan-Pole's picture

Despite a slowdown in the global economic recovery and an increasingly difficult global environment, Sub-Saharan African countries are continuing to post solid growth

Following a 4.6 percent expansion in 2010, the region’s output is expected to grow by 4.8 percent this year (5.8 percent excluding South Africa) and by more than 5 percent in 2012 and 2013. 

Indeed, African countries are amongst the fastest growing countries in the world: Ghana is projected to grow by well over 10 percent this year; and nearly 40 percent of the countries in the region are likely to see 6 percent or higher growth rates.  Growth in Africa remains closely linked to the evolution of international commodity prices—oil, metals, and non-food agricultural commodities—which have remained generally buoyant. 

Not surprisingly, a sharp deterioration in global conditions would weigh down on the region's prospects.  Moreover, this time around African countries will be more constrained in their policy options: because they have less fiscal space than they had in the wake of the 2008 global financial and economic crisis. Read the full analysis on Africa's Pulse.

If it is free, people will queue up…but for how long?

Vijay Pillai's picture

It’s a long ride on a non-motorable road to Pujehun district in the south of Sierra Leone.  We are on a visit to see how the country’s Free Health Care Initiative (FHCI) for pregnant women and young children is working out. 

In the maternity ward of the district hospital, a woman proudly shows us her new born baby – it’s her third child and fourth pregnancy.  But, more importantly, her first child to be delivered in a hospital.  She is among the thousands of women who have delivered in hospitals for the first time since the introduction of free health care. Are we seeing early signs of a change in health seeking behavior among the poor in the country?

Droughts and Famines in East Africa: From man-made problems to man-made solutions

Wolfgang Fengler's picture

How can droughts and famines be avoided? This is the big question many conferences and summits have grappled with in recent weeks. Unfortunately, it will be very difficult to avoid droughts in future because climate change will put more pressure on scarce land and extreme climate events, both rains and floods, will likely occur much more frequently — and even more unpredictably.

The first famine I remember was brought on by the horrible drought in Ethiopia in 1984. At that time, I was a boy in high school and one of Germany’s most famous actors, Karlheinz Boehm, visited our school to mobilize funds to help the suffering Ethiopians. He had previously established the charity, People for People. One of the silver linings of today’s suffering is the outpouring of financial support by ordinary Kenyans who have been moved by the intense suffering of their fellow citizens.

So how can we avoid this same crisis two years down the road? Or as my Kenyan friends say: How do we keep from begging again for money?

Using knowledge to empower poor people

Shanta Devarajan's picture

I felt privileged to speak to the freshman class of Princeton University, my alma mater, at the annual “Reflections on Service”  event organized by the Pace Center.  In my speech, I drew on my work on the 2004 World Development Report, Making Service Work for Poor People and since then in South Asia and Africa, as well as my village immersion experience living and working with a woman in Gujarat, India who earns $1.25 a day. 

Both sets of experiences taught me how government programs—in health, education, water, sanitation, agriculture, infrastructure—that are intended to benefit the poor often fail to do so because they are captured by the non-poor who are politically more powerful.  I suggested to the students that, in addition to getting a good education and undertaking volunteer activities, they consider using their education to inform poor people, so that they can bring pressure to bear on politicians for pro-poor reforms.  The two examples I used to illustrate—citizen report cards in Bangalore and public expenditure tracking surveys in Uganda—were from the 1990s; with the penetration of cell phones in Africa and South Asia, getting knowledge to poor people in 2011 should be easier.

U-Report

Sabina Panth's picture

Yet another performance monitoring tool has been introduced that directly engages citizens in the decision-making process regarding public services.  The project, called U-Report, solicits citizen feedback via SMS polls and broadcasts the results through radio, press, face-to-face meetings and websites.  The method of using both modern and traditional media devices to inform and solicit feedback from the public is expected to enable both the donor and the citizens to identify priority areas for development interventions and get an overall picture about how services work in a given community. 


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