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National Co-ordinator of the Poverty Eradication Programme, Dr. Jaslin Salmon, says that while economic growth is one of the major factors that contributes to poverty reduction, and ultimately its eradication, it is not the only factor.
“There can be poverty reduction without economic growth,” he explain, noting that this was evident in the 1990s.
“There are social interventions that one can make at particular points that can lead to significant reduction in poverty. I must say, however, that if that is to be sustained, there must be economic growth,” Dr. Salmon stresses.
He was speaking at the first in a series of panel discussions hosted last month by the Government Communication Group at Jamaica House, under the theme: ‘Fighting poverty, the past and the future’.
Agreeing with Dr. Salmon, Director General of the Planning Institute of Jamaica (PIOJ), Dr. Wesley Hughes notes that although welfare can alleviate and assist, by itself, it will not end poverty. “What is required ultimately is economic growth, coupled with important social engineering to deal with issues of equity, access to education and basic social services to equalize opportunities and allow people to move up the economic ladder,” Dr. Hughes explains.
Outlining the programmes over the years, Dr. Hughes notes that the period between 1995 and 1996 saw the inception of 10 poverty alleviation programmes. The five programmes that came on stream in 1995 were – Skills 2000; Secondary School Fee Assistance Programme (SSAFP); Operation Pride; Integrated Community Development Programme; and the Special Training and Employment Programme (STEP).
The areas targeted by these programmes range from providing training and skills assistance, education, formal housing as opposed to squatter settlements, to community development assistance as a means of combating or alleviating poverty.
In 1996 more narrowly-targeted interventions were introduced, namely: Jamaica Drugs for the Elderly Programme (JADEP); Bauxite Community Development Programme; Strategy to Rehabilitate Inner-City Communities through Viable Enterprises (STRIVE); Jamaica Social Investment Fund (JSIF); and the National Poverty Eradication Programme (NPEP).
The proliferation of interventions since 1991 has undoubtedly contributed to the progress made in arresting the high incidence of poverty in Jamaica,Dr. Hughes says.
“In 1991, the poverty level was as at an all-time high of 45 per cent of the population, combined with an inflation rate of 80 per cent. By 1992, the poverty level had fallen to below 35 per cent,” he notes.
Providing statistics to show the decreasing poverty levels over the years, Dr. Hughes says that between 1995 and 1996 when the 10 poverty alleviation projects were introduced, the poverty level was between 25 and 30 per cent. “By 1997, the poverty level had fallen to 20 per cent. Between 1997 and 2004, the poverty level has remained below 20 per cent. The poverty level reached its lowest level since 1991, of approximately 15 per cent in 1998, with an inflation rate of 8 per cent. Since 1998, the poverty level has fluctuated between 15 and 20 per cent,” he points out.
Dr. Salmon credits Government expenditure of over $42 billion since 1995 with reducing poverty in the country.
“There are three key factors that have contributed to the reduction, despite the absence of comparable economic growth, which are the phenomenal growth in the informal economy as well as remittances; the impact of activities in the NPEP and Government policy. I think it would be a tremendous failure if the infusion of funds into the poverty programme did not contribute to the decline in poverty,” he says.
Dr. Hughes concludes that the reductions in poverty over the period 1990 to 2003 were due to various factors, such as control of inflation, moving from 80 per cent to 8 per cent; prices being kept stable over a period of time; increased remittances; growth in the informal sector; a relatively stable exchange rate; and the growth of real wages (wages kept ahead of inflation).
“We cannot expect changes to continue in the 2000 era as inflation and prices have undergone significant increases, whilst the informal sector is declining and there is no certainty that remittances will continue to increase,” he says.
“Therefore, the factors that facilitated poverty alleviation are no longer current. What is needed for poverty alleviation to be sustainable is growth in the economy. If economic growth is not forthcoming, the poverty levels cannot be maintained,” he adds.Dr. Hughes says that the expected economic growth over the next two to three years would be between 2.5 and 3 per cent.