Economic growth is a necessary condition to tackle chronic poverty and get to zero extreme poverty. Economic growth is needed to create new and sustainable earning opportunities for the poor, and to generate sufficient revenues for the state to finance social protection and universal access to health and education. Yet, economic growth can also bypass the poorest, or include them in adverse terms: for instance creating unsafe and poorly paid jobs, or expropriating them of their land and access to natural resources.
Economic growth can be made pro-poor and inclusive with the right mix of economic and social policies. Private sector development (PSD) is one crucial area of intervention for these policies. Indeed, since the early 2000s the private sector has been expected to contribute to the eradication of poverty through poverty-focused value chain development, implementation of labour and other standards, pro-poor contracting, and labour-intensive investments.
There is now growing international interest in the link between private sector development and development finance, but nowhere is there available a comprehensive, conceptually well-founded and evidence-based guide to how private sector development can contribute to the eradication of poverty. CPAN is trying to fill this gap with a project financed by DFAT Australia, that aims to diagnose the constraints and enabling conditions for PSD to positively impact on the chronic poor, as well as on preventing impoverishment, and sustaining escapes from poverty.
The project, running in 2014, combines analysis of household panel data (CPAN’s trademark to explore poverty dynamics) with the collection of life histories and engagement with policy-makers, focusing on three South-East Asian countries (Thailand, Vietnam and Cambodia). Activities have been conducted with the support of local partners in each country.
To read more about financial inclusion and chronic poverty, download the Getting to Zero: Tackling Extreme Poverty through Private Sector Development Policy Guide
Download the accompanying Policy Brief - Getting to Zero: Tackling Extreme Poverty through Private Sector Development