Growth? Its about Agriculture and Manufacturing

A worker moves brass tubes at a factory in Zhuji, Zhejiang province. In China, it was agricultural growth that started to reduce poverty; manufacturing jobs actually contributed less. Image: AP

There's a not-unreasonable assumption, based mainly on the experience of east Asia, that building up low-skilled manufacturing industries, such as clothing or electronics, would create jobs that reduce poverty. And the creation of export-processing zones have often been recommended by donors to attract investors to these sectors. But, to reduce poverty, jobs in agriculture or services are just as important. In China, it was agricultural growth that really kick-started poverty reduction; manufacturing jobs actually contributed less. In many countries it's the services sector – providing haircuts, selling food, cleaning houses – that is the real growth area for jobs. The potential for expansion in any sector is finite, and too much focus on any one sector is almost certain to reach a dead end before too long. The key is a mix of sectors and the ability to move people and money easily between them.