- The Guardian
Economic growth has been a powerful tool in the fight to eliminate poverty, malnutrition and disease around the world. Indeed, it is tough to find examples of countries where sustained levels of poverty reduction have been achieved without strong economic growth.
Yet as the world reaches the midway point on the journey to meeting the eight millennium development goals, it is clear many will be missed despite the strongest five years of world growth in a generation. Growth is a necessary but insufficient condition for meeting the targets.
Yet where growth has worked, the results are striking. In China, double-digit rates of economic growth have cut the number of people living in extreme poverty - now defined as living on $1.25 a day - by 476 million since 1990, according to last month's World Bank figure. In stark contrast, the number in extreme poverty in sub-Saharan Africa, where growth has been patchy or non-existent in some countries, has risen by 100 million over the same period.
According to the UK's Department for International Development, economic growth is the surest route out of poverty for nations. As Gareth Thomas, minister for trade and development, points out: "Growth has accounted for as much as 80% of the poverty reduction around the world since 1980 - helping as many as half a billion people to lift themselves out of poverty in those decades."
However, there is also evidence that economic growth alone can fail to deliver development goals. Diane Coyle, managing director of Enlightenment Economics and author of several books on global economics, says: "There's no single path from poverty to development.
"All routes will require growth but growth doesn't guarantee an end to poverty, and there's some evidence that extreme inequality ultimately undermines economic growth."
Alex Cobham, policy manager at development charity Christian Aid, says while the potential and importance of growth should not be underestimated, policy has often been aimed at maximising growth itself, instead of the benefits of growth in terms of improving the lives and living standards of the most at need.
"This leads, in particular, to policy prescriptions that prioritise growth more or less regardless of the impacts on key human development components such as inequality, social justice or environmental protection," he says. "This leads to the pursuit of growth for its own sake rather than maximising the contribution that growth can make to development."
India, for example, has posted annual growth rates above 7% for the past 15 years yet has seen persistently high rates of child malnutrition. It still has some 456 million citizens below the poverty line and is likely to miss the goals on ensuring all children complete a full course of primary schooling and on eliminating gender discrimination in schools.
In contrast, neighbouring Bangladesh, which has an average growth of around 5% since 2000, has hit the target on gender equality in school enrolment, and achieved significant falls in poverty and child mortality.
The 2005 Human Development report by the United Nations Development Programme (UNDP) showed starkly that the link between rises in income and reductions in tragedies such as child mortality was not "automatic".
In a powerful example of understatement, it noted: "Had India matched Bangladesh's rate of reduction in child mortality over the past decade, 732,000 fewer children would die this year."
Distribution is key
The issue of how faster economic growth is translated into higher household incomes is vital. How the income is distributed is equally, or more, important than the pace at which the income grows.
The UNDP report highlighted Tanzania, where average growth of 1.8% per capita income led to only minimal falls in poverty because the gains were concentrated in the capital, Dar es Salaam.
Now many African countries are starting to benefit from extra revenues from the rise in commodity prices, the challenge to ensure this translates into meeting the millennium goals is even more acute.
At the heart of that challenge is achieving a global partnership on development - the sometimes forgotten eighth millennium goal. Dfid says initiatives such as the International Healthcare Partnership, which seeks to ensure investment is used for plans that are well designed, supported and implemented, is a positive example.
Andrew Steer, Dfid's director general of policy and research, acknowledges that, at the halfway point, it is too late for growth alone to bridge the gap. "What is unique is that there are grounds for success," he says. "Africa is growing more rapidly than at any time since the 1970s. Because that is happening, we all need to raise our game and go the extra mile. If Africa was hobbling along at 2% you could have all the UN meetings you want but it would still take a generation."
The importance of the UN's summit on September 25 is that it is a chance for rich and poor countries to establish a global partnership to ensure the proceeds of growth are used in the best ways.
"For the first time in history we are potentially on the threshold of eliminating poverty," says Steer. "The urgency of September 25 is because if we don't seize it we will have lost a truly historic opportunity."
Phil Thornton is lead consultant at research house Clarity Economics