Stepping up the poverty fight

Faced with a slowing global economy and rising debts, many developing-country governments may be tempted to scale back antipoverty programmes.

- AKINWUMI A ADESINA ILAN GOLDFAJN

That would be a grave mistake. Combating poverty is not just a moral imperative; it is also crucial for economic stability, conflict prevention, and long-term development.

Recent research supports the economic case for reducing poverty, showing that a ten-percentage-point decrease in poverty rates can raise per capita growth by up to 1.2% annually. For countries like the Democratic Republic of the Congo (DRC) and Paraguay, that would mean an increase of 25% or more in annual per capita growth.

Moreover, the experience of countries across Africa, Latin America, and the Caribbean demonstrates that meaningful poverty reduction can be achieved even under severe budget constraints. To this end, governments must focus on three key areas.

The first is energy. Expanding access to affordable electricity is essential for manufacturing and agriculture, and thus for the sustainable growth required to reduce poverty. A major step forward in this regard is Mission 300, a groundbreaking initiative led by the World Bank and the African Development Bank (AfDB) that aims to provide electricity to 300 million Africans by 2030.