Private Business can Reduce Poverty

A well-regulated and open market economy is a powerful engine for growth and poverty alleviation in the developing world. But bureaucratic and other hurdles are getting in the way. Is there a way out?

The World Bank, in its 2005 World Development Report, says that governments across the developing world are discouraging entrepreneurial activities because they are failing to address excessive red tape as well as corruption and other crimes.

These constraints are undermining the investment climate in many developing countries, and consequently stifling their full growth potential.

Franois Bourguignon, the World Bank's chief economist, says: 'A good investment climate is central to growth and poverty reduction. But too often, governments stunt the size of those contributions by creating unjustified risks, costs and barriers to competition.'

I just wish someone get take this statement to heart. In developing countries, the government is usually the biggest employer. This gives the government so much leverage and when combined with the bureaucratic machinery it turns into a nightmare.

It is a crying shame that corruption becomes a way out. Sometimes, I think the government stifles the private sector inorder to strengthen their power base.