1.

The development experiences of Third World countries since the fifties have
been staggeringly diverse and hence very informative. That the setbacks the
developing countries encountered in the eighties high interest rates, debt-
servicing difficulties, falling export prices were an aberration, and that the
currently fashionable pessimism about their future is greatly overdone. The
diversity of experience among today's poor and not-so-poor countries does not
defeat the task of analyzing what works and what doesn't. In fact, it is what
makes the task possible.
2. Absolute poverty can be alleviated if at least two conditions are met. First,
economic growth must occur or mean income must rise on a sustained basis.
Second, economic growth must be neutral with respect to income distribution or
reduce income inequality. Generally, poverty cannot be reduced if economic
growth does not occur. In fact, the persistent poverty of a substantial portion of
the population can dampen the prospects for economic growth. Also, the initial
distribution of income can greatly affect the prospects for growth and alleviation
of mass poverty. There is substantial evidence that a very unequal distribution of
income is not conducive to either economic growth or poverty reduction.
3. Some theoretical analyses argue that high population growth creates pressures
on limited natural resources, reduces private and public capital formation, and
diverts additions to capital resources to maintaining rather than increasing the
stock of capital per worker. Population growth affects many phenomena such as
the age structure of a country’s population, international migration, economic
inequality, and the size of a country’s work force. These factors both affect and
are affected by overall economic growth.
4. First the major cause of unemployment and underemployment in
underdeveloped countries like India is the deficiency of the stock of capital in
relation to the needs of the growing labor force. In the modern world, man by
himself can hardly produce anything. Second is the important factor responsible
for slow growth of employment has been the use of capital-intensive techniques
of production, even in consumer goods industries where alternative labor-
intensive techniques are available.
5. One third of the working age population in low- and middle-income countries lack
the basic skills required to get quality jobs, leaving them unable to achieve their
full productive potential and limiting economic investment and growth.
Foundational skills, such as literacy, provide critical scaffolding for young people
and are a prerequisite for numeracy, problem solving, and socio-emotional skills.
Helping young people develop these skills makes economic sense. Unskilled
workers are forced into unemployment or are stuck in unstable low-wage jobs
that offer little career mobility or growth. The results are devastating on a national
level as well. Low skills reduce labor force productivity and make investment less
attractive, decreasing the transfer of technology and “know-how” from high-
income countries. Low skills also perpetuate poverty and inequality because the
private sector can’t flourish in a country that doesn’t have a skilled workforce to
sustain it.