Addressing Global Poverty: The Role of Aid in Achieving Inclusive Growth

Global poverty got reduced due to the growth achievements made by China and India, but poverty is increasing in Africa and other regions. The COVID-19 pandemic even deepened poverty across all countries. Africa now faces another pandemic, the Mpox. However, amidst the current pandemic, ODA is even more important to help LDCs cope with demands from citizens. Aid positively impacts extreme poverty, though empirical evidence is required to claim causality. However, the ‘fundamental question is not whether aid works, but rather how aid can be made more effective. Fragile states cannot embark on development without stability, and stability cannot be guaranteed amidst widespread poverty. Instability, fragility, and poverty are therefore symbiotic, correlated and must urgently be addressed as a global public good. It was so good that global attention was focused on ending the COVID-19 pandemic so that states could get back on development tracks. Developed countries must now cancel poor countries’ long termed debt that had no quantum impact on national development. Often times, political elites benefit from such assistance more than the poor people. Therefore, countries giving Aid need to provide more aid to assist LICs and MICs achieve strategic pro-poor and inclusive growth to alleviate extreme poverty. The provision of AID does not mean that developing states must rely on ODA. They must be accountable and transparent in handling development assistance. In fact, donors should use their nationals and companies to implement infrastructural projects in receiving states so that the aid does not get misapplied. The receiving states need to supervise project and program implementation. Institutions are one of the deep determinants of growth. Therefore, to alleviate poverty, developing countries must build inclusive and effective institutions that will protect property rights, law, and order, ensure macroeconomic stability, provide public goods and services, and invest in education, health, food security and basic infrastructure to help poor countries achieve growth. Donor and recipient countries must target aid at economic growth corridors to spur economic growth so that the needs of the extreme poor, vulnerable and excluded can be addressed within an inclusive global poverty eradication framework.