The Telegraph
Since 1st March, 1999
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For countries stuck in poverty traps, growth will not come on its own, and domestic investments in human development will be inadequate. To break out of poverty traps, countries require greatly expanded donor financing to invest much more heavily in health, education, agriculture, water and sanitation and other key infrastructure even before economic growth occurs...The message is simple: escaping poverty traps requires countries to reach certain critical thresholds — of health, education, infrastructure and governance — that will permit them to achieve take off to sustained economic growth...

Here is where the compact between rich and poor countries must come in. If a country pursues the right policies and commits to good governance in implementing those policies, the world community — international agencies, bilateral donors, private actors, civil society organizations — must help the country reach the critical thresholds through increased assistance.

For countries trapped in poverty, six policy clusters are crucial: Investing in human development — nutrition, health (including reproductive health), education, water and sanitation — to foster a productive labour force that can participate effectively in the world economy; Helping small farmers increase productivity and break out of subsistence farming and chronic hunger...;Investing in attract new investments in non-traditional areas; Developing industrial development policies that bolster non-traditional private sector activities, with special attention to small and medium-size enterprises...Emphasizing human rights and social equity to promote the well-being of all people and to ensure that poor and marginalized people — including girls and women — have the freedom and voice to influence decisions that affect their lives; Promoting environmental sustainability and improving urban management....

The first cluster — investing in human development — needs to be bolstered by much larger donor contributions even before economic growth takes hold...The second cluster for breaking out of poverty traps involves raising the productivity of small poor farmers. Agricultural productivity can be raised by introducing improved improving rural infrastructure such as irrigation systems, storage and transport facilities and roads connecting villages to larger market centres. To raise long-term productivity, security in landholding can protect the rights of farmers and give them incentives to invest in land improvements...

The third policy cluster involves achieving an adequate threshold of key infrastructure to support economic diversification...The fourth policy cluster involves the use of special industrial development policies — including promoting science and technology — to create a sound investment environment for non-traditional business activities...The fifth policy cluster involves promoting human rights and empowering poor people through democratic governance. In dozens of countries poor people, ethnic minorities, women and other groups still lack access to public services and private opportunities — and so will not benefit even when growth begins to take off...

The sixth policy cluster calls for better environmental and urban management, especially to protect poor people. Not coincidentally, many of the world’s poorest places suffer from enormous climatic variability and vulnerability — requiring sound ecological management...In addition, rapid population growth and indiscriminate business activities have stressed ecosystems in many countries with low incomes and low human development.

In sum, to achieve the goals, the poorest countries must escape their poverty traps. To do so, they must reach minimum thresholds in health, education, infrastructure and governance.

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