Reducing poverty is a universal goal. But countries are also finding that it is not enough to reduce poverty, and that growing inequality—of opportunities and in outcomes—can make growth socially and politically unsustainable. In the face of increasingly tight resource constraints, it is becoming harder to maintain high growth rates unless it is environmentally and socially sustainable, and it originates broadly, from across the human resource base.
In Asia, there is heightened interest in the inclusiveness of the growth process. But that interest needs to be matched by a sharper operational focus—in countries and at the Asian Development Bank—on how better results can be promoted.
Inclusive growth—or economic growth that is widely shared—would generally also be pro-poor. That said, if growth is very slow, inclusiveness would not be sufficient for it to be pro-poor. When poverty reduction is significant, economic growth is considered pro-poor. But even when growth is pro-poor, inequality may worsen, for example, as measured by the rising Gini coefficients of Asia’s recent experience, as illustrated by one example of the People’s Republic of China (Figure 1).
Figure 1. People’s Republic of China: Poverty (1981–2005)
The quality of life also hinges on non-income attributes, in which a lack of inclusiveness in factors such as education, health, and equitable access to work and markets detract from growth’s pro-poor qualities. The goal would therefore be to make growth and development (i.e., including the non-income dimensions) as inclusive as possible.