In the 1990s, foreign direct investment began to swamp all other cross-border capital flows into developing countries. Does foreign direct investment support sound development? In particular, does it contribute to poverty reduction?

This book looks at the major policy challenges facing developing Asia and how the region sustains rapid economic growth to reduce multidimensional poverty through socially inclusive and environmentally sustainable measures. Asia is facing many challenges arising from population growth, rapid urbanization, provision of services, climate change and the need to redress declining growth after the global financial crisis. This book examines poverty and related issues and aims to advance the development of new tools and measurement of multidimensional poverty and poverty reduction policy analysis. The book covers a wide range of issues, including determinants and causes of poverty and its changes; consequences and impacts of poverty on human capital formation, growth and consumption; assessment of poverty strategies and policies; the role of government, NGOs and other institutions in poverty reduction; rural-urban migration and poverty; vulnerability to poverty; breakdown of poverty into chronic and transitory components; and a comparative study on poverty issues in Asia and other regions. The book will appeal to all those interested in economic development, resources, policies and economic welfare and growth.

In the 1990s, foreign direct investment began to swamp all other cross-border capital flows into developing countries. Does foreign direct investment support sound development? In particular, does it contribute to poverty reduction?Foreign direct investment is a key ingredient of successful economic growth and development in developing countries - partly because the very essence of economic development is the rapid and efficient transfer and cross-border adoption of quot;best practices.quot; Foreign direct investment is especially well suited to effecting this transfer and translating it into broad-based growth, not least by upgrading human capital.Growth is the single most important factor in poverty reduction, so foreign direct investment is also central to achieving that important World Bank goal. Government-led programs that improve social safety nets and explicitly redistribute assets and income might direct more of the fruits of growth to the poor. But these are complements - not alternatives - to sensible growth-oriented policies. And growth is needed to fund these government-led programs.Moreover, the delivery of social services to the poor - from insurance schemes to such basic services as water and energy - can clearly benefit from reliance on foreign investors.In short, foreign direct investment remains one of the most effective tools in the fight against poverty.This paper - a product of the Private Sector Advisory Services Department - is part of a larger effort in the department to analyze the role of private sector development in poverty reduction.

The textbook experience of poverty can be witnessed in a number of developing countries in Sub-Saharan Africa, South-East Asia and Latin America. Accordingly, Foreign Direct Investment (FDI) has been identified as an important tool for poverty reduction, as it is noted to accelerate economic growth and employment in a nation, and is currently an essential issue for countries such as Uganda. This book finds that Ragnar’s 1953 ‘Vicious-Circle of Poverty’ remains undisputed even today, showing that attracting FDI is not the end, but that a nation’s absorption capacity is equally paramount. The implications of the FDI ‘frog-leap theory’ for developing countries and the Community Capital Absorption Capacity Development (CCACD) framework provide plausible poverty reduction approaches in the 21st century. Without such measures, bringing an end to poverty is likely to elude governments and multinational corporations in developing countries.

Over the past two decades, the percentage of the world’s population living on less than a dollar a day has been cut in half. How much of that improvement is because of—or in spite of—globalization? While anti-globalization activists mount loud critiques and the media report breathlessly on globalization’s perils and promises, economists have largely remained silent, in part because of an entrenched institutional divide between those who study poverty and those who study trade and finance. Globalization and Poverty bridges that gap, bringing together experts on both international trade and poverty to provide a detailed view of the effects of globalization on the poor in developing nations, answering such questions as: Do lower import tariffs improve the lives of the poor? Has increased financial integration led to more or less poverty? How have the poor fared during various currency crises? Does food aid hurt or help the poor? Poverty, the contributors show here, has been used as a popular and convenient catchphrase by parties on both sides of the globalization debate to further their respective arguments. Globalization and Poverty provides the more nuanced understanding necessary to move that debate beyond the slogans.