during 1995–2002, at about 4.6 percent. In contrast, growth in coffee exports stagnated over the same timeframe, although coffee still ranks as Ethiopia’s most important exportable crop. In the two export growth scenarios, output of both traditional and nontraditional exportables is assumed to grow by 13 percent—an additional 8.4 and 11.2 percent, respectively, above their average yearly levels during 1995–2002. As discussed above, these rates were determined to be quantitatively comparable with those delineated for the staple crop and livestock subsectors (1.5 and 3.4 percent growth over baseline levels, respectively). Achieving 1 percent annual growth in the production of nontraditional exportables requires much higher growth in actual exports—as much as 29 percent per year over the simulation period. In the absence of possible market constraints, export subsector growth of this magnitude could induce overall economic growth of 3.6 percent per year, and agricultural growth of 3.4 percent per year. Nevertheless, the overall contribution of this growth to povertyreduction is relatively small. The poverty rate only falls 4.2 percentage points below baseline levels, to 40.2 percent (Table 6, column 4). Additional growth in coffee exports has a similar modest povertyreduction effect in the model simulations.
in the sector, reduce its vulnerability to shocks, secure non-farm related activities to the rural residents and enable the sector play a leading role in growth process of the country. In the long history of poverty in Ethiopia, till very recently, Agriculture losses its dominance through its success, not its weakness, for problems in the primary sector could prevent the economy from launching sustainable structural transformation. When we see the development trend in the republic of Korea, a nation which scored a spectacular rise in social and economic transformation, the agricultural sector has been assisted by research and training with the significant financial support for such a purpose from the various institutions. However, though, agriculture has a huge potential for transforming the country to a stage where everyone enjoys the fruits of development, this has been remained history for a century. With the regime change and the advent of EPRDF, many changes are being seen among others, in terms of povertyreduction, a policy area in which the country is known for many centuries in the international community. Surprisingly, it was in the last five years that the name, Ethiopia has been erased from being used to be the example
Despite efforts being made and some signs of change, poverty in Ethiopia is staggeringly high and thus the country is undoubtedly among the poorest nations in the world in which poverty persists at debilitating levels and hence becomes multifaceted and longstanding problem over periods. The situation of northeastern Ethiopia, one of the poverty stricken areas in the country, does not be different from the above situations. A thorough examination different dimension of poverty and estimating the extent of each dimension are important for policy measures to tackle poverty. This study is, therefore, aims to analyze the economic, social and institutional dimensions of poverty in the northeastern Ethiopia. The study employed rural household survey questionnaire based on income and expenditure dataset of the 400 sample households from four study weredas using a two stage random sampling method proportionate to size. Data on the demographic, socio-economic and institutional characteristics of the sample households are also collected so as to analyze the various poverty dimensions. While the cost of basic needs approach was used to determine the poverty line, FGT family of poverty indices were used to estimate the extent of poverty in monetary terms. In addition, the analysis of multidimensional poverty is also supplemented by additional measures of poverty in terms of the economic, social and institutional aspects using the summary statistics and t-tests. Concerning the monetary measures of poverty, the absolute food and total poverty line are ETB 2866.14 and 3410.71 respectively and the extreme food and total poverty lines are 2149.39.59 and 2557.77 respectively. Based on the above absolute total poverty line, the incidence of poverty in rural northeastern Ethiopia is 39 percent. With regard to the other economic and social dimensions of poverty, households identified as poor in our survey confirms that they are worse off in almost all dimensions than average or better-off households so that poverty in rural northeastern Ethiopia is truly multi-dimensional. As a result, in most cases rural households in the study areas are facing adverse socio-economic composition which in turn increases the likelihood of falling into poverty. Therefore, the identified multitude dimensions and the respective estimated magnitudes of poverty in the study areas are worth considering as a positive knock for policymakers and anyone else who may have a stake on povertyreduction and hence better livelihood of rural households in northeasten Ethiopia in particular and in the country in general.
Micro finance institutions are basically set up with the goal of poverty alleviation. These institutions have a very important and effective role in both developed and in developing countries because it is considered the backbone of their economies. This indicates that without the establishment of micro finance institutions, no developing nation can achieve a viable economic growth/development or the reduction of poverty since they lack enough amount of money. Micro finance institutions can play a role in reduction of poverty and improving the socio- economic condition of the poor since there is a positive contribution of micro finance institution and social development, in which there is better access to health, education and basic services and greater social respect. The contribution of education level and entrepreneurial skills has positive impact to povertyreduction in which there is increase in income, better living conditions and better access to basic needs. This review examines on the role of micro finance institutions for povertyreduction and the challenges on the performance of operating micro finance institution. The review result suggest that major problems that faces the micro finance institution in order to take and operate their business are absence of training for borrowers, weak monitoring and support system, high interest rate, uncomfortable loan repayment schedule, loan size, loan capital shortage, lack of use of technology and cost effective methods, human resource problem, lack of access to credit, insufficient support from government, limited management capacity of microfinance institutions, less attraction on financial sustainability, improper regulations, and limited management capacity of micro finance institutions.
A recursive dynamic computable general equilibrium (CGE) model is herein developed to assess sector- specific growthoptions and their impacts on poverty. The CGE model is calibrated to a 2004 social accounting matrix (SAM) that provides information on the demand and production structure for 34 detailed sectors in the economy (see Table 1). Based on the SAM, the production technologies across all sectors are calibrated to their current situation, including each sector’s use of primary inputs, such as land, labor and capital, and intermediate inputs. To capture existing differences in labor markets, the model classifies employed labor into different sub-categories, including self-employed agricultural workers, unskilled workers working in both agriculture and non-agriculture, and skilled non-agricultural workers. Information on employment and wages by sector and region is taken from the 2004 Living Conditions Monitoring Survey (LCMS4). The model further disaggregates agricultural activities across agro- ecological zones using district-level production and price data (see Section 2). Due to data constraints, non-agricultural production is not disaggregated across regions. Goods produced and consumed in Zambia are traded in national and international markets.
The economywide, multimarket (EMM) model is a tool designed to capture economic interlinkages in Rwanda in an integrated framework that enables the synergies and trade-offs inherent in different agricultural growthoptions. While the official data show that agriculture accounts for 40 percent of total gross domestic product (GDP) in Rwanda (MINECOFIN 1999), 90 percent of population lives in rural areas, where poverty predominates (MINECOFIN 2002b). Thus, the EMM model has an agricultural focus. It includes 30 agricultural commodities or commodity groups from eight broad agricultural subsectors: grains (maize, rice, wheat, and sorghum); bananas; roots and tubers (cassava, potatoes, sweet potatoes, and other root crops); pulses and oilseeds (beans, peas, soybeans, and peanuts); export crops (coffee, tea, and pyrethrum); other cash crops (sugar, fruits, and vegetables); livestock and products (beef, goat and sheep meats, poultry, other meat, fish, eggs, and milk), and other agricultural food (vegetable oils, beverages, and other home processed food) and nonfood (hides and skins) commodities. The model also includes two aggregated nonagricultural sectors (manufacturing and services) (Table 1).
Social protection enables poor people to protect themselves and their assets against shocks, enabling them to defend their long term income generating potential as well as make further investments. Droughts in Ethiopia have significantly reduced household earning power as long as 15 years later (Dercon, 2004). Social protection enables households to resist desperate measures and reduce future vulnerability. The risk associated with impoverishing health expenditures in rural China has adversely affected work migration and school enrolment decisions of households (Jalan and Ravallion, 2001). Social health protection prevents impoverishment due to catastrophic health expenditures, consequently protecting productive assets (Hormansdörfer, 2009). Farmers are less likely to sell the livestock on which their future prosperity depends if adequate cash transfers protect their immediate subsistence. Farmers protected by the Employment Guarantee Scheme in Maharashtra, India, invest in higher yielding varieties than farmers in neighbouring states. Improved risk management supports long-term pro-poor growth.
as a result of limited supply as well as demand factors. 2 Our argument relies on the following assumption: the poorest section of the country would benefit equally when there is an increasing in rate of growth of real per capita GDP. This idea has been commonly shared by most development economists that growth policies are regarded as a tool to raise the share of income of the poorest section of the society (for details see Dollar and Kraay, 2000). 3 In fact some agree with the advantages that can be attained from achieving growth, tried to explain when this could be desirable. Hayami et al (2005) tried to paraphrase this and stated: in addition to the level of average per capita income, the distribution of income matters in determining the prevalence and severity of poverty. 4 Related to these issues there is a consensus among groups of economists and they emphasized higher rates of growth usually results in more rapid povertyreduction, especially over periods of a decade or more (comparison: studies in countries of Chile, and Zambia confirms that the average incomes raise faster, the incomes of poor people tend to raise faster as well) (DFID 2004, p. 1).
Additionally, the majority of the previous studies on the causality between economic growth and povertyreduction have over-relied on a bivariate framework; although it is now known that the results of the bivariate causality test may be invalid, due to the omission of important variables affecting both economic growth and poverty (Odhiambo, 2009). Thus, the introduction of additional variables into the causality framework may not only alter the direction of causality; but it could also affect the magnitude of the estimates (see also Loizides and Vamvoukas, 2005; Odhiambo, 2009). Furthermore, the previous studies on economic growth and poverty have placed an overreliance on cross-sectional methods – even though it is now well-known that cross-sectional methods fail to satisfactorily address country-specific issues (see Casselli et al., 1996; Ghirmay, 2004).
• A new financialized corporatist welfare is also emerging in the most dynamic industries or regions. In a sense it is an updating of the so-called Japanese model. Actually, until the early 90s, the Japanese employment system had been perceived as quite efficient and the industrial welfare provided by the large firm was conceived as complementing the internal labor market (Hanada and Hirano, 2000). This system is now under strain due to the poor macroeconomic performance of the Japanese economy and the difficulty for firms to provide the expected amount of welfare, especially pensions, given the low profit and the tiny real return of financial assets. But the management of some ICT American firms, for instance in the Silicon Valley, is in fact updating this model. First, the Japanese profit sharing is replaced by the diffusion of stock options and some components of welfare are idiosyncratically adjusted to the needs of each employees, in order to prevent him(her) to move to another company or even launch his(her) own start-up. Such an implicit welfare model cannot pretend to be universal, since it concerns mainly high level professionals, holders of scarce competence in high demand on the international market.
Government investment in improved water infrastructure is also important for economic growth and povertyreduction. A study of micro- and small enterprises (MSEs) in Uganda showed that economic benefits to MSEs of water supply improvements might be limited (Davis et al. 2001). Enterprises in both communities where research was conducted preferred a system of public kiosks to private connections. Small retail operations that sell foodstuffs or dry goods have very little need for large quantities of water. These findings have important implications for both the design and pricing of piped water services in Uganda in that piped water services with private connections may be more appropriate for residential areas, whereas piped services to central business districts will probably require more public taps than are commonly envisioned or constructed. These findings emphasize the importance of providing a range of technological options for planning a new water supply system, and importantly, for obtaining reliable information on preferences held and demand by different groups of consumers.
Today there is a great challenge in explaining the contemporary economic developing processes and one of the greatest contradictions are the fact that many countries do experience economic growth, but yet they suffer from the severe bearings of poverty. This paper attempts to identify the relationship between the economic growth and poverty in Sierra Leone. This study used econometrics regression analysis by constructing multivariate linear regression model based on time series study design under the period 1995-2012. Our main findings of this study are: (i) indeed economic growth has a positive effect of reducing poverty in the country under study. (ii) Agriculture value addition as share of Gross Domestic Product (GDP) has no power to reduce poverty if appropriate policy that has to do with income distribution by government is not implemented. The study concluded with some policy options, the policies should be such that would emphasis on the income distribution from agriculture sector efficient strategy given its ability to reduce poverty by increasing employment and improving the opportunities for productive activities among the poor more especially the farmers.
Given that there is a large yield gap between the current and maximum levels for most crops (Table 4), the potential for agricultural growth in Nigeria is high. However, considering that FMARD (2008) addresses only a relatively short period, the targeted growth seems to be unrealistic for most food crops. According to a report published by ReSAKSS WA (2009), potential yield predictions are often based on growth under the idealized conditions of controlled field trials. Thus, it is unlikely that farmers will be able to achieve such yields at the national level over the short period under consideration. It will also be difficult to realize nationwide adoption of the improved seeds and modern technologies that are needed to reach such high yield potentials. It does not seem that these constraints have been taken into account when the production targets were designed. For example, in FMARD (2008), cassava yield and production are both targeted to double nationwide over a period of four years (2008-11), for annual growth rates of 19.5 percent. When we design a scenario that we call the “CAADP growth scenario,” which is based on the targets set in FMARD (2008), we apply such targets to a period from 2009 to 2017, giving farmers a longer timeframe to meet similar targets. For example, in the case of cassava, the annual growth rate becomes about 8.9 percent in our model. The second part of Table 3 gives the modeled growth rates for crop and livestock production, which we set using the government’s targets.
transportation infrastructure results in high costs of production, with transportation representing about 55 percent of costs, compared to 17 percent in other less-developed countries (GOM, 2006). With the current road density standing at 161 kilometers per 1000 square kilometers, Malawi is ranked 16 th in Sub-Saharan Africa (IRF 2007). Government spending on transport and communications in Malawi has only recently started to improve, following a decline in the late 1990s (Figure 14). Investments in rural feeder roads, in particular, can have large povertyreduction effects per unit of investment, as Fan et al. (2004) show in the case of Uganda, where the marginal returns to public spending on feeder roads on agriculture output and povertyreduction is three to four times larger than the return to public spending on murram and tarmac roads. Under the MGDS for 2006-11, the Government of Malawi is planning to spend Kw 7.6 billion to improve the road network, focusing on routine and periodic maintenance, rehabilitation and upgrading of the road network, replacement of timber decked bridges, etc. (GOM, 2006). Although this is not likely to improve the road density, the road condition is likely to improve significantly, with a target of 71 percent of the road network being in good condition, 18 percent in fair condition, and only 11 percent in poor condition.
Figure 11 shows that NAADS is one of the favored strategies, which is justified by several favorable evaluations (see OPM, 2005; Scanagri, 2005; Benin et al., 2007). The study by Benin et al. (2007), for example, shows that the NAADS program has positively impacted the availability and quality of advisory services provided to farmers, the adoption of new crop and livestock enterprises, and the use of modern agricultural production technologies and practices. Furthermore, NAADS also appears to have promoted the use of post-harvest technologies and improved the commercial marketing of commodities, consistent with its mission to promote more commercially-oriented agriculture. However, the program’s success in promoting the adoption of improved varieties of crops and some other yield-enhancing technologies has not been matched by the increased application of improved soil fertility management. This raises concern about the sustainability of productivity increases, which are likely to result in more rapid soil nutrient mining in the absence of improved soil fertility management. These findings suggest the potential need for increased public investment in applied agronomic research that seeks to identify more effective ways to profitably combine inorganic and organic soil fertility measures in different crop systems, and looks to improve the market environment and promote adoption of more remunerative crop enterprises. At present, the International Food Policy Research Institute (IFPRI) is undertaking the end- of-Phase 1 evaluation of the NAADS program, seeking to assess the outcomes and impacts of NAADS and its contribution to food security, povertyreduction and environmental degradation. The findings from this evaluation should help guide future resource allocation and may suggest ways to better support the farmers’ groups in acquiring inputs and production assets.
Using growth elasticities and projected growth rates, it can be simulated whether Zimbabwe will be able to halve the number of poor by 2015. Firstly, elasticities of povertyreduction with respect to agricultural GDP growth and povertyreduction with respect to non agricultural GDP growth from equation 2 in 4.3.3 were calculated using a simple log linear model with Econometric Views 7. The results are shown on Table 5.5 below in which rate of poverty was set as the dependent variable and agricultural GDP and non agricultural GDP were defined as the explanatory variables. The agricultural GDP per worker series is the ratio of total GDP for the sector divided by the estimated number of economically active workers claiming agriculture as their main source of income (Cervantes D & Dewbre J, 2010). Non agricultural GDP per worker was defined as the difference between total national and agricultural GDP divided by the difference between total national and agricultural employment (Cervantes D & Dewbre J, 2010). Detailed information of the results is shown on Appendix L.
When the policy reforms began in 1978, the transportation infrastructure in China was poor. With rapid economic growth, the demand for road transport soared, and transportation shortages and congestion problems surfaced as a consequence. Since 1985, the government has given high priority to road development, particularly construction of high-quality roads such as highways connecting major industrial centers in coastal areas. In the 1990s, investment in infrastructure became a national priority and various policies were implemented to promote the rapid construction of highways. The development of expressways has been particularly re- markable, with the total length increasing from 147 kilometers in 1988 to 25,130 kilometers in 2002, equivalent to an average annual growth rate of 44 percent. In contrast, the length of low- quality, mostly rural roads increased very little, by only 3 percent per year over the same period. The objective of this study is to assess the impact of public infrastructure on growth and povertyreduction in China, paying particular attention to the contribution of roads. The ben- eficial impacts of roads on production and productivity, as well as on poverty alleviation, are well recognized in the literature but some important gaps remain. First, the impact of road quality has received little attention. While the total length or density of roads is a useful indi- cator of the road infrastructure availability in a country, it is important to account for quality differences because different types of roads (e.g., rural versus urban) can have very different economic returns and poverty impacts. Second, most studies have focused only on rural poverty in China, as urban poverty has only recently emerged as an important and growing problem. To address these limitations, this study disaggregates road infrastructure into different classes of roads to account for quality. The study also estimates the impact of road investments on overall economic growth, urban growth, and urban povertyreduction, in addition to agri- cultural growth and rural poverty. To achieve these goals, an econometric model that captures the different channels through which road investment impacts on growth and poverty is de- veloped and estimated using provincial-level data for 1982–99.
There has been a lively debate on agriculture’s poverty alleviation role in recent years. Research outcomes vary, depending largely on methodo logy and data used. For example, Ravallion and Datt (1996) found that agricultural growth has a significant effect in reducing not only rural but also urban poverty in India. Similar findings were reported for the Ivory Coast (Kakwani, 1993) and Indon esia (Thorbecke and Jung, 1996). Some other evidence for India, however, points to weak poverty alleviating effect of agricultural growth in areas with high inequality in land distribution. Thus, differences in initial conditions alter findings.
4. By enabling the poor to save in a secure place, the provision of bank accounts (or other savings facilities) and insurance allows the poor to establish a buffer against shocks, thus reducing vulnerability and minimising the need for other coping strategies such as asset sales that may damage long-term income prospects. Theory and evidence show that FSD can impact on poverty both indirectly, through its positive impact on growth (as we know that growth is usually good for the poor 1 ), and more directly, to the extent that FSD widens access to financial services for the poor (see Figure 1 2 ).