Growth on its own is not the ‘royal road’ to the MDGs – the link between the two is distribution. The key is setting in train a political process that will lead governments and the private sector to distribute the assets, opportunities and benefits of growth more fairly, supporting human development outcomes and in turn, the achievement of the MDGs.

- ODI Briefing Paper on Economic Growth and the MDGs 

With all the talk of GDP growth rates in the news recently I think it’s important to bring up one key point: Growth matters for shit if it’s not inclusive and does not reduce poverty. If our focus is on growth for the sake of growth then the economic future of the Philippines will look little different from the last 25 years (or especially, the last nine years under GMA).

In a developing nation such as ours high GDP rates have been fool’s gold since most of the benefits have only circulated among a select slice of the economic spectrum. Our recent economic history is a classic case of the rich getting richer, while the poor stagnate. Sure, high GDP rates bring in hot money and foreign investment, but where exactly do the benefits of that accrue? Industries like call centers may bring jobs into the country, and help combat unemployment, but where exactly is the labor pool for that drawn? If anything, the recent rhetoric about inclusive growth is welcome; only so long as the structural inefficiencies that prevent it are addressed.

Economic discussions centered on achieving MDGs (which are all about reducing poverty and social development) has been fixed on creating inclusive and deep GDP growth. The fact is our growth has not necessarily achieved any large-scale reduction in poverty rates (which by the way, occurred with the lowest GDP growth rate in a few years). Poverty reduction has stagnated, with only small percentage points in terms of ‘self-rated’ poverty showing any improvement. But when we look at measures, such as the number of impoverished at the national line, the numbers show little change. According to World Bank numbers the poverty headcount ration in 2000 was 33%, in 2003 24.9%, in 2006 26.4%, and in 2009 26.5% (the latest).

Not encouraging.

To get on my economics and social development soapbox for a second (just a second, promise).

As the ODI points out there is most definitely a connection between growth and MDGs. WIthout growth, we can’t achieve them. And yes there is an intersection between growth and poverty alleviation. It can’t all be handouts and social programs, if real substantive economic uplifting is envisioned. Development requires more than that. It demands interconnected and rationalized policies. Which are implemented properly of course.

Yet the problem is, especially over the last 10 years, growth has not been inclusive and broad. Quite the contrary in fact. Growth in economy has been felt in only very limited subsections; little of it has actually trickled down. This is a function of certain systemic inefficiencies, as well as misguided growth-focused economic measures. Focusing solely on pumping GDP numbers is a recipe for disaster for developing economies such as ours.

Growth then must be inclusive and government policies enacted must take this into account; ie addressing system inefficiencies and flaws. We haven’t done it yet. Which is really why the GDP growth that has been touted has had little effect on poverty. In essence, little effect on our attempting to achieve the MDGs.

The Overseas Development Institute had a round table back in June tackling this issue. They released ten propositions geared towards linking growth, government policies and development measures to achieving the MDGs. Well worth the read:

1. The MDGs need to contribute to transformative change, and while the immediate 2015 targets are important, we need to support change that is economically, politically and socially sustainable and tackles the underlying causes of poverty. 
2. We have not done well enough on either equity or economic growth. To achieve the MDGs, an accelerated and transformative process of redistributive and inclusive growth is urgently needed. 
3. High initial levels of inequality are a poor foundation for both growth and poverty reduction. 
4. The structure of growth is important, not just the rate.
5. Employment matters, but decent work even more so, and needs to be backed by effective and large-scale social protection policies, and trade issues, including trade capacity building, are critical. 
6. Gender inequality is a key part of the story, and transformative growth processes need to tackle the challenges women face in terms of care, employment and lack of opportunities. 
7. Growth does not automatically lead to progress on the non-income MDGs and therefore social policies – including education, health and social protection – are central and must not be sidelined. 
8. Transformative change requires developed country governments and institutions to put their own houses in order in terms of trade policies, financial stability, climate change, green growth and other issues that are often beyond the control of individual low-income countries. 
9. Transformative change requires national governments of low-income countries to make interconnected, strategic and coherent decisions on policy areas once seen as discrete, such as industry, trade, migration, taxation, agriculture, social protection and basic services (even if their room for manoeuvre is limited). 
10. Policy solutions need to be home-grown and be reinforced by a political settlement and social dialogue that ensures they address not only the needs of society’s ‘winners’, but those who are, for whatever reason, society’s ‘losers’.

And then for fun. Think of the nature of the government’s growth policies for the last decade. They have been touting growth, growth, growth. GDP! GDP! GDP! It’s a mantra with them. A sleight of hand designed to blind with positive numbers, while ignoring the slide in extreme poverty the majority Filipinos find themselves in.

Any wonder we have had a delinked relationship between growth and poverty levels?