WASHINGTON, D.C., September 22, 2000
- What poor people want most is safety, opportunity, empowerment, and some sense that they are not vulnerable. The most direct path to obtaining that well-being is the income that is generated by a job, or a better job, according to a new IFC publication,
Paths out of Poverty - The Role of Private Enterprise in Developing Countries
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Private firms play a unique and irreplaceable role as a source of economic and social mobility that lifts people out of poverty, IFC Executive Vice President Peter Woicke says in the foreword. An environment that has security, good government, and democracy without corruption is important, but it takes the private enterprises that thrive in such an environment to actually generate income.
The study provides a brief overview of why it is important to support the growth of business and industry in developing countries, arguing that private enterprise is "far and away the largest source of employment and investment and a significant source of tax revenues." It cites ratios of up to 87 private sector jobs created for every new public sector job and reviews the evidence that the economic growth that is spurred by private enterprise benefits the poor as much as the more affluent.
"In a competitive environment, private enterprise has proved to be the strongest contributor to sustainable economic expansion," the report concludes. "Growth is the surest way to achieve upward mobility and poverty reduction as well as to secure financing for health and educational programs and other initiatives directed toward poor people."
Paths out of Poverty
reinforces the mission of IFC, which is to promote private sector investment in developing countries. IFC, part of the World Bank Group, finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses.
