This is defined as an increase in a country's national income or per capita national income. Growth is fundamental to development and thus the advancement of human welfare. Some argue that an expanding economy can coexist with problems of income inequality and poverty. They point out that economic growth does not always lead to improvements in health and education, and conversely that improvements in health and education are not necessarily dependent on economic growth. Brazil has managed to achieve impressive gains in reducing infant mortality and increasing school enrolment during a period of just 1% growth in gross domestic product (GDP) per capita a year and an increasingly tight fiscal environment.
There is also debate on whether globalization creates growth that causes the gap between rich and poor to reduce (converge) or to increase (diverge), both between and within economies. If growth causes convergence, poor economies and communities will “catch up” with the world's richest. If it causes divergence, the rich will get richer and the poor, poorer.
The relationship between economic growth and health has been the focus of the Commission on Macroeconomics and Health. The Commission argues that infectious diseases such as malaria and HIV/AIDS act as a massive societal brake, slowing both economic growth and human development. Good health is linked to economic growth through higher labour productivity, demographic changes and higher educational attainment. In the same way, poor health undermines economic growth. For example, it is estimated that Africa's per capita growth rate of 0.4% in 1990-1997 was three times lower than it would have been had HIV/AIDS not existed.
Pro-poor policies put the poor at the centre of development policy and are seen as one way that neo-liberal economic growth approaches can be made to address poverty issues. Pro-poor policies require accurate information on the living conditions and livelihood strategies of different kinds of poor people: rural, urban, female, jobless. Such information can help to ensure that social sector spending reflects the nature of poverty in a particular country.
There is evidence that countries that can benefit from globalization are showing higher rates of growth, more social spending, and higher Human Development Index scores. However, reports also indicate that the same countries are witnessing an increasing gap between rich and poor, growing corruption and higher levels of environmental pollution. The capacity of a government to carry out the actions required of it, not only to participate in globalization but also to take best advantage of it, is fundamental to the ability of a country to benefit.
- Economic Integration
- Sustainable Development
- Environmental Change
- Foreign Direct Investment (FDI)
- Development Cooperation
- Washington Consensus
- Foreign Policy and Health Security
- International Monetary Fund (IMF)
- Structural Adjustment Programmes (SAPs)
- Vulnerable Groups
- Poverty Reduction Strategy Paper (PRSP)