Dynamics of Economic Growth and Poverty Reduction The Divergent - - PowerPoint PPT Presentation

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Dynamics of Economic Growth and Poverty Reduction The Divergent - - PowerPoint PPT Presentation

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Dynamics of Economic Growth and Poverty Reduction The Divergent Paths of Tanzania and Zambia Ingo Pitterle and Micha Podolski United Nations, Department of Economic and Social Affairs Economic Analysis and Policy Division UN-WIDER &

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SLIDE 1

Dynamics of Economic Growth and Poverty Reduction

The Divergent Paths of Tanzania and Zambia

Ingo Pitterle and Michał Podolski

United Nations, Department of Economic and Social Affairs Economic Analysis and Policy Division Global Economic Monitoring Branch UN-WIDER & UNESCAP Bangkok, 11-13 September 2019

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SLIDE 2

Extreme poverty headcount, $1.90/day (2011 PPP)

Increasingly an African Phenomenon

World 20 40 Africa World ex- Africa % 2017 estimates

Source: UN/DESA estimates based on WB data

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SLIDE 3

Extreme poverty headcount, $1.90/day (2011 PPP)

Increasingly an African Phenomenon

Source: UN/DESA estimates based on WB data

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SLIDE 4

Global extreme poverty headcounts fall consistently…

*estimates “around” and to the right from the dashed line Source: UN/DESA estimates based on WB data

World China Africa World ex China 25 50 75 1990 2000 2010 2020 2030 %

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SLIDE 5

Global extreme poverty headcounts fall consistently…

*estimates “around” and to the right from the dashed line

…unlike the total numbers in certain regions

World China Africa World ex China M 500 M 1000 M 1500 M 2000 M 1990 2000 2010 2020 2030

Source: UN/DESA estimates based on WB data

World China Africa World ex China 25 50 75 1990 2000 2010 2020 2030 %

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SLIDE 6

GDP – Poverty nexus

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SLIDE 7

Almost no extreme poverty in countries with high GDP per capita

GDP – Poverty nexus

Source: UN/DESA estimates based on WB data

20 40 60 80 10 000 20 000 Extreme poverty headcount, % GDP per capita, US dollars (nominal)

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SLIDE 8

Almost no extreme poverty in countries with high GDP per capita

  • in “very” long-term, GDP growth should indeed eradicate poverty
  • what might mean many decades

GDP – Poverty nexus

Source: UN/DESA estimates based on WB data

Growth rate Year 4% 6% 8% 10% 1 1,000 1,000 1,000 1,000 10 1,423 1,689 1,999 2,358 20 2,107 3,026 4,316 6,116 30 3,119 5,418 9,317 15,863 1 2,000 2,000 2,000 2,000 10 2,847 3,379 3,998 4,716 20 4,214 6,051 8,631 12,232 30 6,237 10,837 18,635 31,726

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SLIDE 9

Almost no extreme poverty in countries with high GDP per capita

  • in “very” long-term, GDP growth should indeed eradicate poverty

GDP – Poverty nexus

Source: UN/DESA estimates based on WB data

20 40 60 80 10 000 20 000 Extreme poverty headcount, % GDP per capita, US dollars (nominal)

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SLIDE 10
  • GDP growth does not always imply

poverty reduction

  • And definitely not to the same extent
  • 45
  • 30
  • 15

15

  • 2.5

0.0 2.5 5.0 7.5 10.0 Poverty reduction , total, 2001-2017, percentage point Annualised per capita GDP growth rate, 2001- 2017, per cent N = 83

Source: UN/DESA estimates based on WB data

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SLIDE 11
  • GDP growth does not always imply

poverty reduction

  • And definitely not to the same extent
  • Even in country groups with narrower

initial extreme poverty headcounts

0-20% initial headcount in 2001 20-40% initial headcount in 2001

Source: UN/DESA estimates based on WB data

  • 45
  • 30
  • 15

15

  • 2.5

2.5 5 7.5 10

  • 45
  • 30
  • 15

15

  • 2.5

0.0 2.5 5.0 7.5 10.0 Poverty reduction , total, 2001-2017, percentage point Annualised per capita GDP growth rate, 2001- 2017, per cent N = 83

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SLIDE 12
  • GDP growth does not always imply

poverty reduction

  • And definitely not to the same extent
  • Even in country groups with narrower

initial extreme poverty headcounts

Source: UN/DESA estimates based on WB data

7.4 12.4 1.4

  • 45
  • 30
  • 15

15

  • 2.5

2.5 5 7.5 10

  • 45
  • 30
  • 15

15

  • 2.5

0.0 2.5 5.0 7.5 10.0 Poverty reduction , total, 2001-2017, percentage point Annualised per capita GDP growth rate, 2001- 2017, per cent N = 83

0-20% initial headcount in 2001 20-40% initial headcount in 2001

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SLIDE 13
  • GDP growth does not always imply

poverty reduction

  • And definitely not to the same extent
  • Even in country groups with narrower

initial extreme poverty headcounts

Source: UN/DESA estimates based on WB data

7.9 23.0 24.7 18.5

  • 45
  • 30
  • 15

15

  • 2.5

2.5 5 7.5 10

  • 45
  • 30
  • 15

15

  • 2.5

0.0 2.5 5.0 7.5 10.0 Poverty reduction , total, 2001-2017, percentage point Annualised per capita GDP growth rate, 2001- 2017, per cent N = 83

0-20% initial headcount in 2001 20-40% initial headcount in 2001

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SLIDE 14
  • GDP growth does not always imply

poverty reduction

  • And definitely not to the same extent

TZA ZMB

  • 45
  • 30
  • 15

15

  • 2.5

0.0 2.5 5.0 7.5 10.0 Poverty reduction , total, 2001-2017, percentage point Annualised per capita GDP growth rate, 2001- 2017, per cent N = 83

Source: UN/DESA estimates based on WB data

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SLIDE 15

Changes in poverty headcounts at different thresholds

*WDI/WD data; and UN/DESA estimates for Tanzania (post-2011), Zambia (post-2015) at $1.90 per day Tanzania Zambia Source: UN/DESA estimates based on WB data

Poverty headcount at $1.90/day:

Tanzania: from 82% to 41% Zambia: from 48% to 56%

$1.90/day $1.90/day 40 60 80 100 2001 2005 2009 2013 2017

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SLIDE 16

Poverty headcount at $1.90/day:

Tanzania: from 82% to 41% Zambia: from 48% to 56%

Changes in poverty headcounts at different thresholds

*WDI/WD data; and UN/DESA estimates for Tanzania (post-2011), Zambia (post-2015) at $1.90 per day Tanzania Zambia Source: UN/DESA estimates based on WB data $3.20/day $3.20/day 40 60 80 100 2001 2005 2009 2013 2017

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SLIDE 17

Poverty headcount at $1.90/day:

Tanzania: from 82% to 41% Zambia: from 48% to 56%

Changes in poverty headcounts at different thresholds

*WDI/WD data; and UN/DESA estimates for Tanzania (post-2011), Zambia (post-2015) at $1.90 per day Tanzania Zambia Source: UN/DESA estimates based on WB data $5.50/day $5.50/day 40 60 80 100 2001 2005 2009 2013 2017

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Poverty headcount at $1.90/day:

Tanzania: from 82% to 41% Zambia: from 48% to 56% WHY? IF GDP real growth per capita 2001-2017 3.5% Tanzania 3.4% Zambia

Changes in poverty headcounts at different thresholds

*WDI/WD data; and UN/DESA estimates for Tanzania (post-2011), Zambia (post-2015) at $1.90 per day $1.90/day $3.20/day $5.50/day $1.90/day $3.20/day $5.50/day 40 60 80 100 2001 2005 2009 2013 2017 Tanzania Zambia Source: UN/DESA estimates based on WB data

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SLIDE 19

It matters where the growth happens

Income distribution group 2000 2011 Change, 2000-11

Tanzania

91 - 100% 28.9 31.0 2.1 81 - 90% 15.8 14.8

  • 1.0

61 - 80% 21.9 20.7

  • 1.2

41 - 60% 15.4 14.9

  • 0.5

21 - 40% 11.3 11.1

  • 0.2

11 - 20% 4.1 4.3 0.2 0 - 10% 2.7 3.1 0.4 Income distribution group 2000 2015 Change 2000-15

Zambia

91 - 100% 36.0 44.4 8.5 81 - 90% 15.6 16.9 1.4 61 - 80% 20.6 19.3

  • 1.3

41 - 60% 13.5 10.6

  • 2.9

21 - 40% 9.2 6.0

  • 3.2

11 - 20% 3.2 1.9

  • 1.3

0 - 10% 2.0 1.0

  • 1.0

Source: UN/DESA estimates based on WB data

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SLIDE 20

It matters where the growth happens

Income distribution group 2000 2011 Change, 2000-11

Tanzania

91 - 100% 28.9 31.0 2.1 81 - 90% 15.8 14.8

  • 1.0

61 - 80% 21.9 20.7

  • 1.2

41 - 60% 15.4 14.9

  • 0.5

21 - 40% 11.3 11.1

  • 0.2

11 - 20% 4.1 4.3 0.2 0 - 10% 2.7 3.1 0.4 Income distribution group 2000 2015 Change 2000-15

Zambia

91 - 100% 36.0 44.4 8.5 81 - 90% 15.6 16.9 1.4 61 - 80% 20.6 19.3

  • 1.3

41 - 60% 13.5 10.6

  • 2.9

21 - 40% 9.2 6.0

  • 3.2

11 - 20% 3.2 1.9

  • 1.3

0 - 10% 2.0 1.0

  • 1.0

Source: UN/DESA estimates based on WB data

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SLIDE 21

It matters where the growth happens

Income share by income distribution group, per cent

ZAMBIA

TANZANIA

10 20 2000 2002 2004 2006 2008 2010 0 - 10% 11 - 20% 21 - 40% 10 20 2000 2003 2006 2009 2012 2015 0 - 10% 11 - 20% 21 - 40%

Source: UN/DESA estimates based on WB data

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SLIDE 22

Gross National Income per capita total growth, constant 2010 USD, by income group*

GNI per capita change, constant 2010 US$ Income distribution group 2000-11 2000-15 Tanzania Zambia 91 - 100% 55% 119% 81 - 90% 35% 93% 61 - 80% 37% 66% 41 - 60% 40% 39% 21 - 40% 42% 16% 11 - 20% 52% 5% 0 - 10% 66%

  • 11%

*Gross National Income per capita total growth, constant 2010 USD, proportional to the income share of each respective income group interval (WDI), divided by population of each respective income group.

Source: UN/DESA estimates based on WB data

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SLIDE 23

TANZANIA ZAMBIA

  • There is a structural shift as agricultural share falls
  • Although agriculture still remains the larges employer

Labour Markets

Source: International Labour Organisation

25 50 75 100 10 20 30

Employed Agriculture Industry Services

2000 2017

25 50 75 0.0 2.5 5.0 7.5

Employed Agriculture Industry Services

2000 2017

Millions Millions % %

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SLIDE 24

TANZANIA ZAMBIA

Agricultural and arable land expansion

% %

10 20 20 30 40 50 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Tanzania, Agricultural land (% of land area), (L) Tanzania, Arable land (% of land area), (R)

%

10 20 20 30 40 50 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Zambia, Agricultural land (% of land area), (L) Zambia, Arable land (% of land area), (R)

%

Source: World Bank, World Development Indicators

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SLIDE 25

TANZANIA ZAMBIA

100 2000 2005 2010 2015

100

2000 2005 2010 2015 Agricultural valuer added per worker Index, 2000=100

Growth of agricultural value added per worker points to:

Source: UN/DESA estimates; World Development Indicators, World Bank.

Poverty headcount, $1.90/day, per cent

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SLIDE 26

TANZANIA ZAMBIA

100

100 2000 2005 2010 2015

100

100

2000 2005 2010 2015 Agricultural valuer added per worker Index, 2000=100

Growth of agricultural value added per worker points to:

Source: UN/DESA estimates; World Development Indicators, World Bank.

Poverty headcount, $1.90/day, per cent

Poverty headcount

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SLIDE 27

TANZANIA ZAMBIA

100

100 2000 2005 2010 2015

100

100

2000 2005 2010 2015 Agricultural valuer added per worker Index, 2000=100

Growth of agricultural value added per worker points to:

Source: UN/DESA estimates; World Development Indicators, World Bank.

Poverty headcount, $1.90/day, per cent inverted

Poverty headcount

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SLIDE 28

TANZANIA ZAMBIA a)

Increase in the income of the poorest, and, consequently

b) Decrease in poverty c)

Decrease in inequality

100

100 2000 2005 2010 2015

100

100

2000 2005 2010 2015 Agricultural valuer added per worker Index, 2000=100

Growth of agricultural value added per worker points to:

Source: UN/DESA estimates; World Development Indicators, World Bank.

Poverty headcount, $1.90/day, per cent inverted

Poverty headcount

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SLIDE 29

TANZANIA ZAMBIA

100

100 2000 2005 2010 2015

100

100

2000 2005 2010 2015 Agricultural valuer added per worker Index, 2000=100

Source: UN/DESA estimates; World Development Indicators, World Bank.

Poverty headcount, $1.90/day, per cent inverted

Poverty headcount

d) Growth must reach people in the bottom of income distribution e) As agriculture remains the largest employer in many poor countries f) Agricultural productivity remains crucial for poverty eradication