We’ve been talking about inclusive development for some time now. Here, our friend W.A. Wijewardene, defines inclusive development and distinguishes it from pro-poor actions. The Commission he refers to is the Commission on Growth and Development chaired by Micheal Spence, whose work has influenced ours in many ways.
The Commission released its report in 2008 under the title ‘Growth Report: Strategies for Sustained Growth and Inclusive Development,’ elevating inclusive development to the same status as sustained growth. According to the Commission Report, inclusiveness covers three important aspects relating to fair and just development: equity, equality of opportunities and protection of vulnerable groups when there are changes in employment and markets due to economic transitions.
The report also warned that ‘systematic inequality of opportunities’ is highly toxic to a society since it would derail the growth processes undertaken by countries through political channels and ensuing conflict.
Pro-poor growth is strictly not inclusive growth
Two World Bank economists, Elena Ivanchovichina and Susanna Lundstrom, following the Commission’s definition of inclusiveness in growth have clarified in a note released in 2010 the concept of inclusive growth and how it differs from other popular concepts like ‘pro-poor growth’, ‘broad-based growth’ and ‘shared growth’.
According to them, inclusive growth arises from both the pace and the pattern of growth of a country. The pace recording a continuous high growth will surely reduce poverty. The pattern which focuses on how diversified the economy is and the qualitative changes that take place in the economy enhances economic opportunities.
Pro-poor growth can be attained by giving subsidies to the poor people or giving government jobs to those who join the work force. But it does not ensure inclusive growth because such measures are not sustainable and it focuses only on the poor. Inclusive growth is providing productive and sustainable employment channels to both the poor and the middle class which too is sidelined in normal growth processes and therefore could become dangerous breeders of social unrest and tension.