Inclusive Growth

From poverty reduction to inclusive growth

Over the past decade, the Asia and Pacific region has successfully reduced income-based poverty and improved living standards for all, including the poor and those vulnerable to poverty.

Based on most recent international poverty figures, by 2005 about 27% of the Asia-Pacific populations live on less than $1.25 per person a day and 54% are vulnerable to poverty ($2). Despite the global financial crisis, the poverty incidence in the region has further declined over the last years. The social indicators of poverty in the region, as expressed in the Millennium Development Goals (MDGs) have also shown substantial improvement since the 1990s.

While poverty and living standards have improved in the region, more than 900 million people in Asia and the Pacific still live on less than $1.25 a day. In terms of economic benefits and access to social services, large numbers of people are being left behind or left out. In many developing countries, economic inequality has increased in the past decade. Without steps to address these disparities, the risks this trend poses - including social instability - will continue to grow.

It is in this context that "inclusive growth" has emerged as a new development paradigm in many countries. It embraces both income and non-income dimensions of well-being. Inclusive growth is - along with regional integration and environmentally sustainable growth - a strategic agenda of ADB.

ADB and inclusive growth

In 1999, ADB embraced poverty reduction as its main development objective. ADB's Strategy 2020 confirms this overarching goal.

Inclusive growth is one of the three strategic objectives in ADB's Strategy 2020, along with environmentally sustainable growth and regional cooperation and integration.

Strategy 2020 describes inclusive growth based on 3 pillars:

  • high, sustainable growth to create and expand economic opportunities,
  • broader access to these opportunities to ensure that members of society can participate and benefit from growth, and
  • social safety nets to prevent extreme deprivation.

Defining and measuring inclusive growth

In 2010, ADB's Regional and Sustainable Development Department (RSDD) explored ways to operationalize inclusive growth within ADB operations, and what kind of tools could be used to measure ADB's contribution to inclusive growth at the sector and country levels. Studies have been prepared on

  • measuring and monitoring inclusive growth,
  • inclusive growth criteria and indicators,
  • ADB's contribution to inclusive growth in transport and energy projects,
  • ADB's contribution to inclusive growth in agriculture, rural development, and
  • ADB's contribution to Inclusive growth in environmental projects.