The world faces unprecedentedopportunities to reduce global poverty and improve humanwelfare. Strong global growth and better economic policiesin recent years have substantially reduced poverty in manydeveloping countries. However, with the recent financialturmoil in the United States and rising prices for food,oil, and other commodities, the world economy facesheightened risks and volatility. Policymakers around theworld face the challenge of maintaining momentum in growth,as well as of improving the quality of growth. This concernover quality is reflected in the highly uneven reduction inpoverty, rising inequality in numerous countries, andwidening environmental degradation during the past decade, aperiod of unprecedented high economic growth in developingcountries. Unless these issues are confronted, gains fromgrowth are likely to be undermined and the pace of growth,itself, will not be sustained. Growth is clearly linked toreductions in poverty. But the strength of this relationshipdepends on the quality or nature of growth. Various studiesshow that some growth patterns systematically reduce povertyand inequality, but others do not. And some growth patternslead to underinvestment in human capital, overexploitationof natural resources, and degradation of the environment,patterns inimical to the sustainability of growth.
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