Poverty Reduction and Inclusive Growth

ADB’s poverty reduction assistance to its developing member countries aims to reach the estimated 1.4 billion people still struggling on less than $2 a day in urban slums or remote rural areas, including those who are marginalized and excluded from the benefits of the region’s growth.

The Asia and Pacific region has grown at a record pace over the past few decades. The region’s real per capita gross domestic product (GDP) grew an average of 6% per year from 1999 to 2006. Asia’s share of global exports has soared from 16% in the 1980s to 27% today. It has the largest reserves and the highest savings rate in the world.

However, poverty remains the central challenge facing the region. More than 544 million people in Asia and the Pacific, still live in absolute poverty, defined as less than $1.25 a day. Almost half of the world’s absolute poor live in South Asia alone. One of every two individuals living in Asia—or 1.4 billion people—remains poor, as measured against the $2-a-day benchmark.

ADB and poverty reduction

ADB is committed to ending poverty in the region. Poverty reduction has been ADB’s overarching goal since 1999 and an important feature of its planning and operations since its establishment. Ending poverty is ADB’s—and the region’s—most important piece of unfinished business. The extraordinary economic expansion of recent years has made the eradication of income poverty a possibility by 2020.

This will require continued work to sustain the current high rates of GDP growth per capita, as well as additional effort to ensure that the poor are able to participate in, benefit from, and contribute to the growth process.

Focus areas

Reducing poverty also requires that more people become economically productive citizens and share in a society’s well-being. The ability to achieve and to sustain poverty reduction depends on economic growth alongside a well-managed natural environment. Further, the process of ending poverty in the region can be accelerated when neighboring economies work within larger and freer markets and when governments achieve common interests through common efforts.

ADB can make substantive contributions toward this vision by focusing its support on three distinct but complementary development agendas of the region: inclusive economic growth, environmentally sustainable growth, and regional integration.

ADB’s Enhanced Poverty Reduction Strategy

ADB’s Enhanced Poverty Reduction Strategy takes into account the Millennium Development Goals (MDGs). It emphasizes increased harmonization and alignment of poverty reduction programs among donors and member countries, as well as the fostering of partnerships for poverty reduction. The approach also puts emphasis on managing for development results and capacity development.

The Strategy is made up of three pillars:

  • pro-poor sustainable economic growth
  • inclusive social development
  • good governance, which also includes the cross-cutting priorities of environmental sustainability, gender equity, private sector development, and regional cooperation.

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