Differences in growth rates have had an important bearing on regional differences in poverty reduction and human development.  Growth matters to poverty reduction because it determines the size of the economic cake or the goods and services which are available.  Without growth, it is impossible to sustain improvements in human welfare and achieve rapid poverty reduction.  Income of the poor rises one-for-one with overall growth.  This general relationship between income of the bottom fifth of the population and per capita GDP holds in a sample of 80 countries covering four decades.  Although there has been remarkable and unprecedented progress in reducing poverty in Asia over the last 25 years, the continent still accounts for three quarters of the world's poor.  If you are interested in reading a recent newsletter detailing some of the strategies it takes to help fight poverty, please link on.

The need for assistance is greater in remote areas of Asia, especially those inhabited by indigenous people.  In these areas, most farmers cannot afford irrigation and rely entirely on the rain to water their crops.  Many of these farmers have suffered because of the prolonged drought, caused by El Nino, and forest fires, as well as from the effects of the financial crisis.  Until recently, adjustment policies in many parts of Asia appeared to have succeeded notably in reducing poverty.  What reasons lay behind this success?