Skip to content
Catholic Online Logo

Report Highlights Need to Fight Poverty With Growth

WASHINGTON, D.C., FEB. 26, 2006 (Zenit) - Latin America's continued poor economic record was the subject of a report published Feb. 14 by the World Bank. The study, "Poverty Reduction and Growth: Virtuous and Vicious Circles," was notable for admitting the need for greater government involvement in the economy, compared to the normal insistence on privatization and the private sector.

"Latin American countries need to fight poverty more aggressively if they want to grow more and compete with China and other dynamic Asian economies," commented the press release accompanying the report.

Between 1981 and 2000 China achieved annual per capita growth of about 8.5%. By comparison, Latin America's per capita gross domestic product (GDP) declined by 0.7% during the 1980s and increased by only about 1.5% per year in the 1990s. Poverty levels didn't change significantly, except in Chile.

Poverty is not only a consequence of the lack of growth, argued the World Bank. The continued high levels of poverty in turn hamper the achievement of high and sustained growth rates in the continent.

According to the study, a 10% drop in poverty levels, other things being equal, can increase economic growth by 1%. In turn, a 10% increase in poverty levels lowers the growth rate by 1% and reduces investment by up to 8% of GDP, especially in countries with underdeveloped financial systems.

Poverty hampers growth because people lack access to credit and insurance, and are, therefore, in no position to undertake activities that fuel investment and growth. And a combination of poor families and bad schools leads to a substandard education of children.

At the regional level, a lack of infrastructure to promote growth discourages investment. At a national level, poor countries, unable to moderate income disparities, frequently fall victim to social tensions. These, in turn, make it difficult for a healthy business climate to flourish. What results is a vicious circle in which low growth results in high poverty, and vice versa.

An associated problem is the high level of income inequality. Little improvement has occurred in this area in recent years. As well, there is little intergenerational mobility, with the children of poor families generally remaining trapped in poverty themselves.

Changing strategy

"In order to move from a vicious to a virtuous circle, we need to launch a broad-based attack on poverty that feeds back into higher growth that in turn reduces poverty," said Guillermo Perry, World Bank chief economist for Latin America and the Caribbean, in presenting the report.

Among its policy recommendations, the study urges:

-- improving the quality of education, and expanding its coverage at secondary and tertiary levels;

-- boosting investment in infrastructure to benefit laggard regions and increasing the access of the poor to public services;

-- extending access to credit and financial services, and implementing effective social policies, such as conditional cash-transfer programs that provide cash to poor families as long as they keep their children in school and take them to the doctor;

-- expanding access to public services such as clean water and electricity.

Strategies that help reduce poverty are needed to complement pro-growth policies, such as trade liberalization, the World Bank observed. Even though policies of economic liberalization are essential for long-term growth and poverty reduction, they can also have short-term negative effects on poverty and inequality, the report said. "Smart investments in the poor can lead to virtuous circles."

The study also recommends that countries improve the equity of their public expenditure programs. Specifically, countries should target expenditures to those who really need them, rather than spending resources to subsidize programs for the well-to-do. In addition, countries need to improve the efficiency of their social policies and, in most cases, to increase revenue collections through tax systems that minimize adverse effects on investment.

Potent weapon

Such advice represents a break from previous thinking by the World Bank and other international financial institutions. In fact, the report explained that economic policy has often been debated about in terms of whether it should follow emphasize pro-growth or pro-poor policies.

The evidence now shows that this dichotomy is no longer so relevant. Clearly, it is necessary to have policies that promote economic growth. "Strategies that do not focus on growth," the report explained, "forswear perhaps the most potent weapon for improving human well-being at our disposal."

At the same time, if policy-makers fail to take into account the constraints on growth due to the constraints imposed by continued poverty, their pro-growth strategies will be undermined. "Redressing these constraints gives rise to an under-examined dimension of policy analysis that might be called pro-growth poverty reduction," the report noted.

Therefore, the World Bank recommended that, when pro-growth policies can have adverse effects on income distribution and poverty, they be accompanied by policies such as improved access to education, improvements in infrastructure, support to small farmers and financial aid for poor households.

"Converting the state into an agent that promotes equality of opportunities and practices efficient redistribution is, perhaps, the most critical challenge Latin America faces in implementing better policies that simultaneously stimulates growth and reduce inequality and poverty," said the report.

Growth in solidarity

Such an approach has long been advocated by the Catholic Church. The Compendium of the Social Doctrine of the Church expresses concern over evidence of increasing inequalities between advanced and developing countries. It explains that we need a "globalization in solidarity" (No. 363) to ensure that economic progress reaches all sectors of society.

The Compendium also points out that the state has a vital role to play in ensuring greater solidarity, respecting, however, the principle of subsidiarity, so that authorities do not unduly extend their powers. "It is necessary for the market and the state to act in concert, one with the other, and to compliment each other mutually," notes No. 353.

Poverty poses a dramatic problem of justice, the Compendium observes and calls us to a greater awareness of the duties imposed by solidarity, justice and charity. No. 449 of the Compendium cites the words of Pope John Paul II in his message for World Day of Peace 2000: "At the beginning of the New Millennium, the poverty of billions of men and women is the one issue that most challenges our human and Christian consciences." A challenge that will not be easy to resolve, as the World Bank report points out.

Contact

Catholic Online
http://www.catholic.org CA, US
Catholic Online - Publisher, 661 869-1000

Email

info@yourcatholicvoice.org

Keywords

Latin, America, Poverty, Economic, Solidarity

More Catholic PRWire

Showing 1 - 250 of 4,719

A Recession Antidote
Randy Hain

Monaco & The Vatican: Monaco's Grace Kelly Exhibit to Rome--A Review of Monegasque-Holy See Diplomatic History
Dna. Maria St. Catherine Sharpe, t.o.s.m., T.O.SS.T.

The Why of Jesus' Death: A Pauline Perspective
Jerom Paul

A Royal Betrayal: Catholic Monaco Liberalizes Abortion
Dna. Maria St.Catherine De Grace Sharpe, t.o.s.m., T.O.SS.T.

Embrace every moment as sacred time
Mary Regina Morrell

My Dad
JoMarie Grinkiewicz

Letting go is simple wisdom with divine potential
Mary Regina Morrell

Father Lombardi's Address on Catholic Media
Catholic Online

Pope's Words to Pontifical Latin American College
Catholic Online

Prelate: Genetics Needs a Conscience
Catholic Online

State Aid for Catholic Schools: Help or Hindrance?
Catholic Online

Scorsese Planning Movie on Japanese Martyrs
Catholic Online

2 Nuns Kidnapped in Kenya Set Free
Catholic Online

Holy See-Israel Negotiation Moves Forward
Catholic Online

Franchising to Evangelize
Catholic Online

Catholics Decry Anti-Christianity in Israel
Catholic Online

Pope and Gordon Brown Meet About Development Aid
Catholic Online

Pontiff Backs Latin America's Continental Mission
Catholic Online

Cardinal Warns Against Anti-Catholic Education
Catholic Online

Full Circle
Robert Gieb

Three words to a deeper faith
Paul Sposite

Relections for Lent 2009
chris anthony

Wisdom lies beyond the surface of life
Mary Regina Morrell

World Food Program Director on Lent
Catholic Online

Moral Clarity
DAN SHEA

Pope's Lenten Message for 2009
Catholic Online

A Prayer for Monaco: Remembering the Faith Legacy of Prince Rainier III & Princess Grace and Contemplating the Moral Challenges of Prince Albert II
Dna. Maria St. Catherine Sharpe

Keeping a Lid on Permissiveness
Sally Connolly

Glimpse of Me
Sarah Reinhard

The 3 stages of life
Michele Szekely

Sex and the Married Woman
Cheryl Dickow

A Catholic Woman Returns to the Church
Cheryl Dickow

Modernity & Morality
Dan Shea

Just a Minute
Sarah Reinhard

Catholic identity ... triumphant reemergence!
Hugh McNichol

Edging God Out
Paul Sposite

Burying a St. Joseph Statue
Cheryl Dickow

George Bush Speaks on Papal Visit
Catholic Online

Sometimes moving forward means moving the canoe
Mary Regina Morrell

Action Changes Things: Teaching our Kids about Community Service
Lisa Hendey

Easter... A Way of Life
Paul Spoisite

Papal initiative...peace and harmony!
Hugh McNichol

Proclaim the mysteries of the Resurrection!
Hugh McNichol

Jerusalem Patriarch's Easter Message
Catholic Online

Good Friday Sermon of Father Cantalamessa
Catholic Online

Papal Address at the End of the Way of the Cross
Catholic Online

Cardinal Zen's Meditations for Via Crucis
Catholic Online

Interview With Vatican Aide on Jewish-Catholic Relations
Catholic Online

Pope Benedict XVI On the Easter Triduum
Catholic Online

Holy Saturday...anticipation!
Hugh McNichol

Priestly Identity: Crisis and Renewal (Part 1)
Catholic Online

Al Qaeda...afraid of Benedict's message!
Hugh McNichol

Benedict XVI...calling all to hope...
Hugh McNichol

Perfect Women
Cheryl Dickow

Papal Palm Sunday Address - 'Enough With the Bloodshed'
Catholic Online

Spotlight on China
Catholic Online

Papal Homily for Palm Sunday
Catholic Online

Holy Week...Holy Time!
Hugh McNichol

Mary and Motherhood
Cheryl Dickow

The Void
Paul Sposite

Islamic violence wounds the global community!
Hugh McNichol

The Seven New Deadly Sins!
Hugh McNichol

Catholic benefits include Catholic principles!
Hugh McNichol

Remembering Father Alfred Kunz
Matt C. Abbott

David vs Goliath
Theresa Lisiecki

Happy Lent!
Paul Sposite

Diplomacy...Vatican style!
Hugh McNichol

Sub umbra Petri! (Under the Shadow of Saint Peter)
Hugh McNichol

Cuba...a neonascent Church!
Hugh McNichol

Kids in Conflict
Catholic Online

Wednesday's Audience - On the Writings of St. Augustine
Catholic Online

The Relevance of Lourdes at 150
Catholic Online

Hillary...what would Saint Norbert say!
Hugh McNichol

Lent...questions, answers and involvement!
Hugh McNichol

Mary, Mother of all Humanity, Hic et Nunc!
Hugh McNichol

Catholics...WAKE UP!
Hugh McNichol

Catholic Brotherhood with the People of the Covenant
Hugh McNichol

Have mercy on us O Lord! - Ash Wednesday
Hugh McNichol

Vote early, vote Catholic!
Hugh McNichol

Christ, our global Alpha and Omega!
Hugh McNichol

Being Catholic means...total affirmation of being Catholic!
Hugh McNichol

Seeing the World through New Eyes
Sarah Reinhard

Emulating the Angelic Doctor!
Hugh McNichol

Priests defend, commend Archbishop Raymond Burke
Matt C. Abbott

Saint Paul...a continued example of radical conversion!
Hugh McNichol

A renaissance of faith, reason and global cooperation....
Hugh McNichol

Cardinal Rigali's Homily at Life Vigil
Catholic Online

Angelus: On Christian Unity
Catholic Online

Silencing the Pope
Catholic Online

Papal Homily on Feast of Christ's Baptism
Catholic Online

Education and Gender
Catholic Online

The ignominy of Roe vs. Wade
Hugh McNichol

Papal Message for World Day of the Sick
Catholic Online

Angelus: On Christian Unity
Catholic Online

Benedict XVI's Planned Lecture at La Sapienza
Catholic Online

Pope's Letter to Jesuits' 35th General Congregation
Catholic Online

Fr. Cantalamessa - Behold, the Lamb of God!
Catholic Online

That We May Be One, and Never Lose Heart
Catholic Online

Sowing Hope in Sierra Leone
Catholic Online

God-incidences are the gift of kairos moments
Mary Regina Morrell

St. Augustine's Last Days
Catholic Online

Liturgy: When There's a Medical Emergency
Catholic Online

Marriage and Celibacy: Love's Link
Catholic Online

Developing a Global Catholic Awareness
Hugh McNichol

Rooms in My Father's House
Cheryl Dickow

Resolutions for New Year 2008
Chris Anthony

Keep teaching Holy Father!!!
Hugh McNichol

Dangers of anti-Catholic academic extremism....
Hugh McNichol

The liturgy war
Matt C. Abbott

Some Answers to a Few Common Questions about Vocations
Monsignor Charles M. Mangan

Developing a Global Catholic Awareness
Hugh McNichol

Christmas reflections
Chris Anthony

The Lasting Contribution of The Servant of God Pope John Paul II
Monsignor Charles M. Mangan

No more bobble-head Jesus'!
Hugh McNichol

Pope's Address to Baptist World Alliance
Catholic Online

The Virgin Without Sin
Catholic Online

Cardinal Vingt-Trois on His New Mission
Catholic Online

Archbishop Forte on Religion & Freedom: Part 1
Catholic Online

Wednesday's Audience - On St. Chromatius of Aquileia, Pope, Benedict
Catholic Online

Pope's Address for Consistory of Cardinals
Catholic Online

Trafficking in Lives
Catholic Online

Pope Benedict - On Hope
Catholic Online

The Hidden Costs of Gambling
Catholic Online

A Vital, Life-Giving Message
Monsignor Charles M. Mangan

Christianity's Contribution
Catholic Online

Youth and Fashion's Modest Twist
Catholic Online

Papal Homily at the Consistory
Catholic Online

Love, Marriage and Happy Kids
Catholic Online

The Virtue of Obedience: Our Duty, Our Crown
Monsignor Charles M. Mangan

Vere dignum et justum est!
Hugh McNichol

Pope's Address to Bishops of Kenya
Catholic Online

Democracy in Danger in Venezuela
Catholic Online

The Life-Sapping Human Virus
Catholic Online

'You Alone Are The Lord': A Brief Summary of Catholic Teaching
Monsignor Charles M. Mangan

Sacred Time...Come Lord Jesus!
Hugh McNichol

How Christ-like are we in our lives?
Chris Anthony

A Retreat for Today's Christian Woman
Cheryl Dickow

Pope Benedict - On Trust in God
Catholic Online

God and Caesar Seen From Down Under
Catholic Online

Praying the Luminous Mysteries for our Clergy
Monsignor Charles M. Mangan

Culture's Pressure on Our Girls
Donna-Marie Cooper O'Boyle

Papal Message on the Common Good
Catholic Online

Wednesday's Audience - St. Jerome on the Bible
Catholic Online

What Every Parent Should Know About 'The Golden Compass'
Catholic Online

Cardinal Poupard on 'Populorum Progressio'
Catholic Online

A Richer Liturgical Translation: Interview With Bishop Roche
Catholic Online

U.S. Bishops' Statement on War in Iraq
Catholic Online

The 'Golden Compass' is no treasure for children
Mary Regina Morrell

Bishop Skylstad's Address to U.S. Bishops' Fall Meeting
Catholic Online

Rewarding Failure
Catholic Online

On St. Martin of Tours
Catholic Online

Undermining Parents
Catholic Online

God...our theological E.F.Hutton!
Hugh McNichol

The Secular Vs. Religion?
Catholic Online

Wednesday's Audience - On St. Jerome
Catholic Online

The Scourge of Poverty
Catholic Online

Sons and Daughters of God...EQUALLY!
Hugh McNichol

On Zacchaeus the Tax Collector
Catholic Online

Why Dads Matter
Catholic Online

Archbishop Chaput on Citizenship and Evangelization
Catholic Online

God Created Man for Life, Not Death
Catholic Online

Benedict XVI's Prayer Intentions for November
Catholic Online

Imposing 'Tolerance'
Catholic Online

A Turn to the Fathers: Interview With Father Robert Dodaro
Catholic Online

Evangelizing a Digital World
Catholic Online

Women Religious on Human Trafficking
Catholic Online

John Crosby on Von Hildebrand's Understanding of the Person
Catholic Online

Chicago law firm fights for civil rights, against death culture
Matt C. Abbott

On the Call to Martyrdom
Catholic Online

Media Benefits and Dangers
Catholic Online

Fr. Cantalamessa - The Pharisee and the Publican
Catholic Online

Aborting Viable Lives
Catholic Online

Wednesday's Audience - On St. Ambrose of Milan
Catholic Online

'You Alone Are The Lord': A Brief Summary of Catholic Teaching
Monsignor Charles M. Mangan

Prostitution: Legal Work or Slavery?
Catholic Online

Address of Holy See on Religious Liberty
Catholic Online

Archbishop Diarmuid Martin on 'Populorum Progressio'
Catholic Online

Escaping Poverty: Interview With Archbishop Silvano Tomasi
Catholic Online

Christ's Parable About the Need to Pray Always
Catholic Online

Wednesday's Audience - On St. Eusebius of Vercelli
Catholic Online

Recovering subtle signs of our Catholic Identity!
Hugh McNichol

On Peace, Missions and Justice
Catholic Online

Congratulations to His Eminence John Cardinal Foley!
Hugh McNichol

Giving Ourselves Completely to Mary
Monsignor Charles M. Mangan

The 'Courage' to go 'Beyond Gay'
Matt C. Abbott

When Bioethics Turned Secular
Catholic Online

Confession Comeback
Catholic Online

Wednesday's Audience - On Hilary of Poitiers
Catholic Online

Reemergence of Global Catholic Identity!
Hugh McNichol

Father Cantalamessa on the Leap of Faith
Catholic Online

Month of the Rosary
Catholic Online

Why Technology Needs Ethics
Catholic Online

Cardinal Lozano Barragán on Future of Health Care
Catholic Online

How Can Catholics Understand Mary as Co-Redemprix, Mediatrix of All Graces and Advocate?
Monsignor Charles M. Mangan

New Saint Book is Visually Stunning and Filled with Detail
Lisa M. Hendey

Papal Homily in Velletri
Catholic Online

Wednesday'a Audience - On St. Cyril of Alexandria
Catholic Online

Father Cantalamessa Analyzes Relationship
Catholic Online

Holy See Address to U.N. General Assembly
Catholic Online

Homily From Red Mass in Washington
Catholic Online

Pope Remembers Cardinal Van Thuân
Catholic Online

The brave monks of Myanmar
Chris Anthony

Faith in Politics
Catholic Online

On Lazarus and World Hunger
Catholic Online

Fighting the Good Fight: Resisting Temptation
Monsignor Charles M. Mangan

Media frenzy buries U.N. goals

Holy See Statement on Climate Change
Catholic Online

Wednesday's Audience - On Chrysostom's Social Doctrine
Catholic Online

China's Seven Sorrows
Catholic Online

Vatican Message to Muslims for Ramadan
Catholic Online

Father Cantalamessa on the First World and Lazarus
Catholic Online

Angels, God's Messengers in a world of fragile peace and Broken promises!
Hugh McNichol

Memo to Mrs. Clinton: Why Not Baby Bonds When Life Begins?
Deacon Keith Fournier

Reorienting the Mass
Catholic Online

Report Card on Religious Freedom
Catholic Online

On Wealth and Poverty
Catholic Online

A Response to Hitchens' 'God Is Not Great'
Catholic Online

Vetoing children's health care?

The ideal family
Joseph Sinasac

Who does the judging?
Dennis Heaney

One mistake away

The Big House ban

In praise of the parish

Text of the USCCB statement for Respect Life Sunday 2007

The Outstanding Purity of Our Blessed Mother
Monsignor Charles M. Mangan

Educated flock

Religion and politics

Facing a door to the future
Dennis Heaney

A long debate

Who Are the True Progressives?
Deacon Keith Fournier

Petraeus offers a dose of reality

Insurgence
Robert Storr

Papal Address at Vespers
Catholic Online

Papal Coat of Arms Still Relevant
Catholic Online

Benedict XVI's Address at Heiligenkreuz Abbey
Catholic Online

On Loving Jesus as Mary Did
Catholic Online

Cardinal Castrillón Hoyos on 'Summorum Pontificum'
Catholic Online

Wednesday's Audience - On the Trip to Austria
Catholic Online

Father Cantalamessa on the Joy of Fatherhood
Catholic Online

Commentary on Artificial Hydration and Nutrition
Catholic Online

Vatican on Nutrition to Patients in Vegetative State
Catholic Online

Benedict XVI's Q-and-A Session With Youth in Loreto
Catholic Online

Take a Risk, Follow Your Call: the challenge of a lifetime!
Sisters of Bon Secours

Papal lessons

Family matters

Lessons from a tragedy
Dennis Heaney

Shopping blues
Joseph Sinasac

Marriage Breakdown: Expensive and Divisive
Catholic Online

Her darkness was a warning

The Light of Mother Teresa's Darkness - Part 2
Catholic Online

Newsletters

Newsletter Sign Up icon

Stay up to date with the latest news, information, and special offers

Subscribe to Catholic OnlineYouTube Channel

the FEED
by Catholic Online

  • St. Joan of Arc: Saint of the Day for Monday, May 30, 2016
  • Alabama Supreme court recognizes same-sex adoption
  • Daily Reading for Wednesday, June 1st, 2016 HD Video
  • Daily Readings for Monday, May 30, 2016
  • How much did Goldman Sachs' CEO invest in hedge fund?: Hillary ...
  • Advent Prayer HD Video
  • 100k Americans work for China as China continues to purchase major US ...

Daily Readings

Reading 1, Second Peter 1:2-7
2 Grace and peace be yours in abundance through the knowledge of our ... Read More

Psalm, Psalms 91:1-2, 14-15, 15-16
1 You who live in the secret place of Elyon, spend your nights in the ... Read More

Gospel, Mark 12:1-12
1 He went on to speak to them in parables, 'A man planted a vineyard; he ... Read More

Saint of the Day

Saint of the Day for May 30th, 2016 Image

St. Joan of Arc
May 30: St. Joan of Arc is the patroness of soldiers and ... Read More