||**Table 8: **|**Annual rates **|**of change (%)**|
|---|---|---|---|
||Poverty|reduction|Survey mean (inequality adjusted)|
||Rural|Urban|National|
|2004/05 - 2011/12|-6.7|-8.6|3.2|
|2009/10 - 2011/12|-12.8|-19.0|6.0|

Source: Authors' estimation using PovcalNet database and Press Note on Poverty Estimates, 2011-12. Government of India, Planning Commission, July 2013.

# _Other regions’ required contributions_

Given that achieving the minimum 4.06 percent annual growth rate for two decades is already very challenging for these two regions, it seems reasonable to ask other regions to contribute to bridging the remaining gap. However, this is difficult because (i) the population share of the remaining regions is limited; (ii) the projected poverty rates under the benchmark scenario are already low; and (iii) the inequality-adjusted growth rates of most countries in these regions are already quite high. For example, even if all countries in these regions, in addition to SAR and SSA, grow at a minimum 4.06 percent annually (inequality adjusted), the global poverty rate is 3.31 percent, still above 3 percent. Increasing the threshold further in these regions will help the global poverty rate reach 3 percent, but that might create a sense of unfairness because it is not clear why poor countries in these regions need to face tougher conditions than poor countries in SAR and SSA.

# _A proposal – An intermediate growth target_

We propose a simple intermediate growth target— _maintaining a minimum 4.4 percent annual inequalityadjusted growth rate for all countries in the developing world_ . Our projection suggests that if all countries with growth rates lower than the minimum threshold could accelerate their growth to an annual rate of 4.4 percent and the rest maintain their growth rates under the benchmark scenario, the global poverty rate will be 2.97 percent by 2030. We also found that even if all countries with the benchmark growth rates higher than the minimum threshold failed to maintain the growth rates, as long as they could maintain at least 4.4 percent, the global poverty rate would be 3.1 percent by 2030.

Maintaining a minimum 4.4 percent annual inequality-adjusted growth rate is clearly not an easy task. For example, historically, although the developing world as a whole grew at an annual rate of 4.7 percent between 2002 and 2010, the inequality-adjusted growth rate was just 2.8 percent. Furthermore, in the Sub-Saharan Africa region, 8 out of 47 countries recorded growth rates more than 4.4 percent between 2002 and 2010. More importantly, this is one of the best spells, with more than six years in terms of growth rates in the region. However, as discussed above, it is almost impossible for the rest of the world to fill the gap created by the SSA region if SSA cannot grow at a minimum rate of 4.4 percent annually. In this sense, feasibility defines this target.

It is also worth noting that this target is defined by inequality-adjusted growth rates. When countries are growing, inequality often increases. Therefore, it is typically the case that inequality-adjusted growth rates are lower than raw (or unadjusted) growth rates when countries are growing. But, this is not always the case. Some countries in LAC show great successes in reducing inequality and promoting sharing of growth benefits between the rich and the poor. For example, Brazil’s average raw growth rate between 2002 and 2010 was 4.5 percent, while its inequality-adjusted growth rate was 7.7 percent. Mexico also exhibited similar success in promoting shared prosperity—its raw growth rate was 3.5 percent, while its inequality-adjusted growth rate was 5.5 percent.

20