I believe that we need policies in two senses, one in the way of accelerate the economic growth and second for minimize the poverty. In Latin America, the policy makers only do policies in one way. Maybe the focus is economics growth, but not the poverty reduction, because them have confidence in the trickle down effect.

Economic growth does not necessary alleviate poverty. The trickle down theory does not work at all times. Important is the distribution of economic growth in the country. Without proper distribution , the richer segment of population has become richer and the poor more poorer. Therefore, microfinance has received much more importance these days so that economic distribution and poverty reduction could go together hand in hand. Government policies must target the poor. Donors support should focus at the grassroot level. Financial access must reach to the deprived sector. Infrastructural development should take at the rural areas. Agricultural development and SMEs could be best models for income generation. Rural households must be given opportunities to share their views and involved in decision making process in order to uplift them. Indeed, this sector could be part of economic growth for the country.

I thank you Binod for your wonderful exposition. All the point you made should be the policy focus

Poverty, among others, is about lacking adequate opportunities. However, if the poor are given proper economic opportunities, they can prove their capabilities in contributing to the economic growth, starting from their immediate household to the neighborhood scale. Grameen Bank is one of the glaring demonstrations where the poor village women contributed to economic growth of their families and the entire villages surrounding them.

Although it is claimed, we don't tend to the assess/appraise/appreciate the actual economic contributions of the urban poor into the micro economy. Despite low-skilled, the poor are involved in myriad of jobs that otherwise semi or high-skilled people won't/cannot do. The economic transaction of such jobs take place in the shadow of informal economy which I bet a very few countries in the world attempt to take into account for assessing overall economic growth and development. Hence, I would argue that the poor do contribute to economic growth pending confirmation, perhaps, on the nature, type and potentials.

The poor too contribute to the economic growth, may be not as much as the well off do. They are poor because they they do not have access to the resource as much as the rich have. But please remember that most of the menial tasks involving human labor are performed by these so called poor people, both in manufacturing and service sectors of the economy, though their contribution has neither been documented properly nor the credit been given to them. In any economy.

If you remove the human labor from the economy, what would be left, is any body's guess. So my point is that in an economy every section contributes in its own way. The need of the hour is to address the issues of poverty in a rational way so that the economic conditions of these sections of the population are addressed judiciously. Pro-poor policies which can ensure inclusive growth are actually needed so that they can be gainfully employed and make their contribution to the economic growth. In addition, efforts are also needed to develop their skills so that they also remain employable.

Economically speaking, the poor are always responsible for most of the economic growth - simply because they are the largest segment of society. The problem, policy-wise, is that the impact of each individual is so small - it is only considerable if seen collectively. Meanwhile, the impact of one single big firm or enterprise is much bigger - therefore the state focus on those enterprises. The same thing happens when comparing poor families to well-off ones.

Of course the poor contribute to the process of economic growth. One way to think about this question is to think about whether unemployed people contribute to production. The apparent answer is if a bunch of people are long-term unemployed, they cannot possibly contribute to production process. This argument is not entirely valid because it ignores the effect of this unemployment on aggregate wages and prices. Larger unemployment tend to put downward pressure on real wages, reducing cost of production. If prices do not decrease proportionally, this raises profitability in production, raising growth rate. This effect, sometime referred to as the 'cheap labor' effect has given rise to growth in labor-intensive sectors in many poor countries. The effect is, however, absent in the official statistics.

Just like the long-term unemployed, most poor are poor because they have low purchasing power - that is, goods and services they sell do not command high enough prices in the wider market, while the goods and services they need have higher prices. They sell their 'inputs' at a low price to the rest of the economy, giving rise to 'poor-intensive' occupations in many areas, such as house-maids, menial and odd-job workers, street vending, etc. These help keep cost of labor-supply down for the higher productivity people. The overall economic contribution of these activities is thus not insignificant.

If you determine a network of entities which contemplates "borderism" function, then social and functional dynamics intrinsically *needs" the poor to survive, and it determines a continuous convective flow that leads them constantly towards the center, and then replace them in a loop.

Check it in my paper "Æurosphere Ecological", url: https://www.researchgate.net/publication/257441183_urosphere_Ecological._How_Science_of_Networks_Information_Dynamics_and_Connectivism_could_help_Politics_to_be_more_inclusive_transparent_equitable_for_people_incorporating_Culture_and_different_disciplines_in_the_progressive_stages_of_decision_making.

Best.

gl

Conference Paper Æurosphere Ecological. How Science of Networks, Information ...

The poor cannot contribute to economic-growth

Economic-growth are influenced by four factors: human resources, physical capital, natural resources and technology. but as human resources, if the poor are empowered or gainfully employed, they can contribute to economic-growth.