Poverty Reduction and the Composition of Growth in the Mekong Economies

In recent decades, the Mekong region has achieved impressive growth of output per person and large reductions in absolute poverty incidence. The region is defined here as the seven economies that border the Mekong River: five countries, Cambodia, Laos, Myanmar (Burma), Thailand, and Vietnam; plus two provinces of China, Guangxi and Yunnan. Very little empirical work exists on the quantitative relationship between the rate of poverty reduction in these economies and the rate and nature of their economic growth. This chapter, which focuses on the agricultural, industrial, and service sectors of these seven economies, examines whether the sectoral composition of growth is relevant for the rate at which poverty incidence declines, given the overall rate of economic growth. The results confirm that poverty reduction is strongly related to growth of real gross domestic product per person but that the sectoral composition of this growth is also important.