WB development report advocates safety net for poor

The World Bank's World Development Report 2006 favours inclusive growth to ensure that the poor have access to health, education and safety nets.

The report, titled 'Equity and Development', says growth will reduce poverty in an equitable structure, and hence improve access to justice, and infrastructure like roads, power, water, sanitation and telecom.

In adds that promoting fairness in finance and labour markets will ensure that the poor have easier access to credit and jobs.

"Poverty reduction may involve redistributing the influence, advantage or subsidies that dominant groups enjoy," it says, adding that there are long-term benefits of greater equity.

The report favours providing safety nets for the poor, adding that policies need to be tailored according to specific countries and contexts.

The working poor, people unable to work and vulnerable groups should be provided a public insurance system, where each household that suffers a negative shock and falls below a particular living standard will qualify for state support, the report says.

Rather than employment protection legislations, it says, unemployment insurance schemes and low-wage but guaranteed employment schemes are preferable.

At the global level, it says international inequalities have come down over the last 50 years, primarily because of the growth in India and China. But, if one leaves out these two, both with large populations, inequalities have increased.

It says global markets for labour, goods, ideas and capital are inequitable. It adds that to counter this inequity, greater temporary migration to OECD countries, achieving ambitious trade liberalisation under the Doha round and developing financial standards appropriate to developing countries is called for.

"Benefits from greater legal migration are likely to be the greatest," the report says.

It also says poor countries should be allowed to use generic versions of drugs for "global diseases".

"Although many people in poor countries suffer from global diseases they are an insignificant part of the commercial market," it says, adding that they may be allowed generic access without damaging research incentives.

To enforce this, it suggests that inventors make legally-binding commitments to their own governments, not to enforce patent rights in pharma markets, which represent the bottom 2 per cent of the global drug sales in each disease class. This commitment will have to be made when obtaining a license to make foreign patent filings.