The Concept of Inclusive Growth and its Policy

Relevancefor Asia and the Pacific

Ursula Schaefer-PreussVice President, Knowledge Management

and Sustainable DevelopmentAsian Development Bank

International Food Policy Research Institute28 September 2010

Washington, DC

Outline

• Why more and more countries are embracing inclusive growth

• What is inclusive growth

• What does inclusive growth imply for policy making

• Inclusive growth and the MDGs

• How ADB supports inclusive growth and MDGs in Asia and the Pacific

2

3

Figure 1

Note: Pacific includes Papua New Guinea and Timor-Leste only.Source: Calculated from World Bank’s PovcalNet database and World Development Indicators database.

Headcount index, $1.25/day (2005 PPP)

0

10

20

30

40

50

60

70

Central andWest Asia

East Asia South Asia South EastAsia

Pacific Asia and thePacific

1990 2005

4

Figure 2

Note: Pacific includes Papua New Guinea and Timor-Leste only.Source: Calculated from World Bank’s PovcalNet database and World Development Indicators database.

Headcount index, $2/day (2005 PPP)

0

10

20

30

40

50

60

70

80

90

Central andWest Asia

East Asia South Asia South EastAsia

Pacific Asia and thePacific

1990 2005

5

% of population with access to improved sanitation facilities, 2006

20 30 40 50 60 70 80 90 100

NepalCambodia

IndiaAfghanista

BangladeshLao PDRMongolia

IndonesiaBhutan

PakistanMaldivesVietnam

ChinaPhilippinesAzerbaijan

MyanmarSri LankaArmenia

TajikistanKyrgyzGeorgia

MalaysiaThailand

UzbekistanKazakhstan

Singapore

Figure 3

Source: World Development Indicators database.

6

Figure 4

Electrification rate (%), 2008

0 10 20 30 40 50 60 70 80 90 100

MyanmarAfghanistanEast TimorCambodia

BangladeshNepal

Lao PDRPakistan

IndonesiaIndia

MongoliaSri Lanka

PhilippinesViet Nam

Taipei,ChinaThailand

MalaysiaPRC

BruneiSingapore

Source: World Energy Outlook – Electricity Access database.

7

Figure 5

Source: ADB/ESCAP/UNDP 2010 Regional MDG Report.

8

Figure 6Recent trend in inequality (change in Gini coefficients, %)

-6 -4 -2 0 2 4 6 8 10 12

Nepal PRC

Cambodia Sri Lanka

Bangladesh Lao PDR

India Korea, Rep. of

Viet Nam Turkmenistan

Azerbaijan Tajikistan

Philippines Pakistan

Indonesia Mongolia Malaysia

Kazakhstan Armenia Thailand

Source: Key Indicators 2007 – Inequality in Asia.

9

Inclusive growth

High, sustained, and efficient growth to create productive jobs and economic opportunity

Social inclusion to ensure equal access to economic

opportunity

• Investing in education, health, and other social services to expand human capacity, especially of the disadvantaged

•Eliminating market and institutional failures and social exclusion to level the playing field

Social safety nets to mitigate the effects of transitory livelihood shocks and to prevent extreme poverty

Good governance and institutions

Figure 7

Highlights of 2010 Asia-Pacific MDG Report

Progress on MDGs is mixed: • Region likely to achieve targets on poverty,

primary enrolment, gender parity in education, access to safe drinking water, and reversing spread of TB and HIV

• Region lagging in primary school completion, child and maternal health, basic sanitation, forest cover, and CO2 emissions

Priority areas of focus identified: • Hunger and food security• Health and other basic services• Basic infrastructure

10

Highlights of 2010 Asia-Pacific MDG Report

Seven drivers necessary to accelerate MDG achievement:• Strengthening growth by stimulating

domestic demand and intra-regional trade• Making growth more inclusive and

sustainable • Strengthening social protection• Reducing gender gaps• Ensuring financial inclusion• Supporting least developed and structurally

disadvantaged countries• Exploiting potential of regional economic

integration 11